Employee Satisfaction The Impact of Benefit and Reward Policies

Document Sample
Employee Satisfaction The Impact of Benefit and Reward Policies Powered By Docstoc
					                Employee Satisfaction: The Impact of Benefit and Reward Policies
                                        Hooi Lai Wan, hooilw@hotmail.com
                                      University Technology Malaysia, Malaysia


Abstract
The paper is an analysis of the impact of benefit and reward policies on employee satisfaction in the chemical companies
in Malaysia. Analysis was done on four companies, which were selected based on equity ownership. It is hypothesized
that foreign-owned multinational companies (MNCs) being more globalized and technologically advanced would have
better benefit and reward policies, and employees in these companies are more satisfied with the benefit and reward
policies. However, findings show that not all foreign-owned MNCs are giving better benefit and reward packages.
Companies that have some Malaysian interests seem to have better benefit policies though this is not the case for rewards.
As far as rewards are concerned, the respondents in the Malaysian-owned company experienced the lowest level of
employee satisfaction among the four companies. On the contrary, respondents in European-owned MNCs felt that they
are better rewarded than those companies with Asian equity. Benefit packages in all the companies are in line with global
trends, with much emphasis on flexible benefits though standard and voluntary benefits are available. Keywords:
benefits, rewards, employee satisfaction, standard, flexible, voluntary, recognition

Introduction
Benefit and reward policies are recognized as being critical to the delivery of an organization’s business strategy and
change initiatives, motivating and mobilizing staff to achieve these goals. Organizations that maintain effective
benefit and reward policies have a sustained competitive advantage, as key employees are effectively locked into
their careers and employment costs are minimized. What then are the benefits and rewards policies most desired by
company employees? This study aims to understand the current benefit and reward policies in the chemical and
petrochemical industry in Malaysia and its effect on the satisfaction of the employees. The chemical and
petrochemical industry was selected for this research to understand what drives employees to stay on in these
companies despite the perilous nature of the job.
          In this research, case study analysis was done on four companies - identified based on the equity ownership
to see if different ownership has an impact on the benefit and reward policies of the company. For the purpose of
this research, it is hypothesized that employees in foreign-owned MNCs are more satisfied with the benefit and
reward policies of their companies as compared to locally-owned MNCs. Foreign-owned MNCs being more
globalized and technologically advanced would have better benefit and reward policies for its employees. Hence,
employees in the foreign-owned MNCs are expected to be more satisfied with the benefit and reward policies.

Literature Review
Employee benefits package such as tuition reimbursement, paid leave policies (bereavement, examinations, etc.),
paid personal time off, enhanced health insurance, retirement plans, paid vacations/holidays and overtime
multipliers that are competitive and attractive would increase employee satisfaction. Giving long-service awards,
visit/send cards to sick employees, baby blankets/gifts, picnics/holiday parties and family day would also engender
employee satisfaction. Acknowledging employees for excellence among their peers through an announcement in the
company newsletter, an employee recognition award or a perk such as a special parking space, also serves to
enhance a sense of satisfaction. Similarly, recognition and rewards that are given fairly and adequately according to
job performance have a positive effect on employee satisfaction. Ongoing feedback about performance from
superiors in the form of praise/recognition also tends to stimulate employee satisfaction. Employees are also more
satisfied with flexible benefit options.




                                                         1155
          Parents, for example, are opting for companies offering home working or flexi-time, as well as private
medical insurance, pension contributions or critical illness cover. Workers living in rural areas are more likely to
favour a company car or subsidised travel. In a survey conducted by William M. Mercer Inc., where 25,000
employees at nine large companies were asked their opinions of 65 potential benefit programs, the benefits
identified as the most important for productivity are flex time (90%), clear sense of organizational purpose (89%),
employee provided or subsidized office equipment for work at home (87%), a comfortable, attractive workspace
(86%), telecommuting (84%), on-site fitness center or subsidized health-club membership (78%), work schedule
compatible with school calendar (75%), career planning and appraisal (74%), child care center at or near work site
(73%) and job sharing (72%) (Smith, 2005).
          Most surveys carried out showed that, businesses are increasingly turning to rewards and benefits packages
to recruit and retain staff. According to the CIPD, around 50% of businesses it surveyed this year now offer benefits
or rewards in addition to base salary. One fifth of respondents intended to improve their existing benefits in 2005,
adding new policies rather than phasing any out.1 Similarly, Day (2005) reiterated that with potential employees able
to take their pick of the jobs in a buoyant market, employers need to offer the right bait to land the best talent. But
paying the right salary is only part of the story (Day, 2005). Jardine Lloyd Thompson, a benefits provider found that
in small and medium-sized firms, nearly half used benefits schemes to keep up with market rates and another 37%
used them purely to attract and retain staff.2
          Benefits offered by companies vary enormously in terms of quality and variety. Generally, there are three
styles of benefits: standard (share plans, pensions and holiday entitlement); flexible (cars, dental insurance, life and
disability insurance, discounted services, financial planning, give-as-you-earn charitable contributions, home phone
packages, pensions, life assurance and concierge benefits); and voluntary (services such as health care schemes).
The CIPD found that the top 10 employee benefits were still rudimentary incentives such as sick pay, 25 days paid
leave, on-site parking, private healthcare, a party at Christmas or tea and coffee. To retain or attract new staff, the
companies need to keep up with the trend to provide flexible packages. Flexible benefits packages provide added
extras to staff and allow them to pick and choose between the type of benefits package they want. Hewitt
Associates, a human resources firm found that, in nearly half of all the companies it had surveyed, their chief
executive officers were now involved in setting up flexible benefits schemes.3
          A study focusing on companies that employ 100 or more workers released by The Families and Work
Institute has the following findings on the trends in employer benefit offerings: allow workers to take time off to
attend school events (90%), flextime (67%), let workers stay home with mildly ill children without using vacation or
sick days (50%), provide dependent care assistance plans (50%), hold supervisors accountable for sensitivity to their
employee’s work/family needs (44%), offer maternity leaves longer than 13 weeks (33%), offer elder care resources
and referral services (23%), and offer childcare at or near the workplace (9%) (Smith, 2005).
          Company rewards are just as important as pay and benefits. Today, organizations acknowledge the
important role reward programs play in contributing to business success. Put simply, an effective total rewards
strategy enables organizations to deliver the right amount of rewards, to the right people, at the right time, for the
right reason (Cornish and Gilbert, 2005). Besides monetary rewards, recognition and appreciation are integral
components of a winning strategic reward system. Though comparatively less costly, these two elements rarely
receive the attention they deserve from business owners. Showing appreciation to employees by acknowledging
excellent performance and the kind of behavior desired is best done through a personal note, stopping by the
employee's desk to convey your appreciation, a public statement of thanks in front of the employee's co-workers or
team, citing specific examples of what they've done that has positively impacted the organization (Sarvadi, 2005).
Instantly rewarding and recognizing a good job has a major impact on improving morale and motivation. A
motivated worker will contribute vigor and dynamism to the organization, instilling the organization with
remarkable productivity and a competitive edge - all the while providing a valuable service or product for the
business and its customers.
          Heathfield (2006), emphasizes on quality of work life rewards, in addition to traditional increases to base
pay, and variable rewards, such as bonuses, profit-sharing and gain-sharing. Recommendations include payment of
a one-time, lump sum payment for a result or outcome that deserves recognition; payment of smaller rewards with
“thank you” notes for above the call of duty contributions; increased emphasis on additional benefits such as pre-




                                                        1156
paid legal assistance, educational assistance, and vision insurance; increased opportunity for flexible work
arrangements and job-sharing; an organizational emphasis on the training and development of employees; and clear
career paths so employees see opportunities within your organization. In short, forward thinking organizations are
emphasizing “quality of work life” rewards and recognition to add to the value of the total compensation package.

Methodology
The main method used for this research is primary data survey collected through a questionnaire survey as well as
in-depth interviews with the human resource director or manager and some employees of each company. The four
companies are given the fictitious names of GMCC, JCC, BCC and MCC to preserve their anonymity. GMCC is a
joint venture between a local and European company (about 800 employees); JCC is wholly Japanese owned (about
400 employees); BCC a European company (about 300 employees); and MCC a local company (about 500
employees). At GMCC, two senior HR managers and two HR executives were interviewed. At JCC, the Assistant
HR Manager, a HR executive and the Quality Manager provided information. At BCC, the Senior HR Manager and
two HR Advisors were interviewed while at MCC the Senior HR Manager and two HR executives participated in
the study. As for the employee satisfaction survey, 100 questionnaires were given to each participating company
and distributed randomly to the employees in different departments within the organization. Respondents were
given two weeks to return the questionnaire. The data collected from the questionnaire was analyzed using the
SPSS Version 11.0 for Windows software program.
         After contacting the HR department of each of the companies by telephone, a meeting with the HR director
was arranged and a general outline of this research's aim and methodology (the theme, the purpose, general outline,
method, and details of this study) was mailed to them in advance. At the first meeting, permission was obtained to
administer the questionnaire and privately interview company employees. Subsequent meetings involved
interviews, which were carried out in a private room and lasted for an hour to an hour and a half. A summary of
each interview was drafted based on the tape recordings and notes taken during the interview. The drafts were then
sent back to the interviewees for verification. Follow-up discussions were carried out electronically through e-mails,
facsimile and telephone. The responses to the interviews were tabulated to identify key trends. Summaries were
then developed for each variable.

Results
(a)   Demographic Data
(b)   The demographic data covers sex, race, age, age of entry, education level, job category, type of employees,
      years of working experience, and length of service with the organization, income group and number of
      previous jobs held. The majority of the respondents in all the four companies are young male Bumiputras
      with an average age of between 32 – 35 years. Majority of the respondents have 7 - 12 years of working
      experience, with MCC having more experienced staff as compared to the other companies. Length of service
      ranges from 1 – 25 years and MCC has more senior employees as compared to the other companies. 60.5% of
      the respondents in MCC have more than 10 years of service with the company. This is also reflected in the
      high percentage of respondents (63.2%) in MCC not having any previous jobs before joining the organization.
      Table 1 is a summary of the demographic data of the respondents of the four companies.
(c)
                                                       (d)
                                                       (e)
                                                       (f)
                                                       (g)
                                                       (h)
                                                       (i)
                                                       (j)
                                                       (k)




                                                       1157
                                                        (l)
                                                        (m)
                                                        (n)
                                                        (o)
                                                        (p)
                                                        (q)
                                                        (r)
                                                        (s)
                                       (t)     TABLE 1: DEMOGRAPHIC DATA
    (u)                                            (v) GMCC          (w) JCC          (x) BCC            (y) MCC
    (z)   Number of respondents                       (aa) 62          (bb) 56          (cc) 62            (dd) 38
    (ee)  Sex: Male                                  (gg) 64.5       (ii) 64.3         (kk) 75.8          (mm) 73.7
               (ff) Female                           (hh) 35.5       (jj) 35.7         (ll) 24.2          (nn) 26.3
    (oo) Race: Bumiputras                            (ss) 75.8       (ww) 82.1         (aaa) 64.5         (eee) 94.7
          (pp)        Chinese                         (tt) 21        (xx) 17.9          (bbb) 29           (fff) 2.6
                 (qq) Indians                         (uu) 1.6          (yy) -          (ccc) 4.8          (ggg) 2.6
                 (rr) Others                          (vv) 1.6          (zz) -          (ddd) 1.6           (hhh) -
    (iii) Age: Age range                           (lll) 25 – 48     (ooo) 21 –        (rrr) 25 –       (uuu) 23 – 49
               (jjj) Average age                     (mmm) 35                 47                49         (vvv) 35
               (kkk) Mode                           (nnn) 30, 40       (ppp) 32         (sss) 34       (www) 36, 45
                                                          (11.3%)      (qqq) 29         (ttt) 28                (21%)
                                                                             (14.3             (16.1
                                                                              %)                %)
    (xxx) Entry age: Entry age range               (aaaa) 20 – 46    (dddd) 19        (gggg) 20        (jjjj) 20 – 36
                     (yyy)    Average        age     (bbbb) 31               – 42              – 39      (kkkk) 26
          of entry                                  (cccc) 30, 34      (eeee) 26      (hhhh) 26         (llll) 23, 25
                     (zzz)    Mode                       (11.3%)       (ffff) 26        (iiii) 24              (31.6%)
                                                                             (14.3             (14.5
                                                                              %)                %)
    (mmmm)           Working experience:           (pppp) 5 – 27    (ssss) 1 – 24     (vvvv) 3 –       (yyyy) 1 – 25
          Range in years                           (qqqq) 12.42      (tttt) 8.93                30       (zzzz) 12.11
    (nnnn)            Average                         (rrrr) 10       (uuuu) 7        (wwww) 11.         (aaaaa) 12
    (oooo)            Majority                            (14.5%)            (12.5               8            (23.7%)
                                                                              %)       (xxxx) 8
                                                                                               (24.2
                                                                                                %)
    (bbbbb) Length of service: Range in            (eeeee) 1 – 7    (hhhhh) 1 –       (kkkkk) 1 –      (nnnnn) 1 – 25
          years                                       (fffff) 4               10                10      (ooooo) 9.63
    (ccccc)        Average                           (ggggg) 5       (iiiii) 5.07      (lllll) 7.36      (ppppp) 12
    (ddddd)        Majority                               (32.3%)      (jjjjj) 4     (mmmmm)                 (26.3%)
                                                                            (25%)
                                                                                            (33.9
                                                                                             %)
    (qqqqq) Number of previous jobs held:           (sssss) 1.6     (uuuuu) 23.      (wwwww)           (yyyyy) 63.2
            None                                     (ttttt) 75.8           2                5.5       (zzzzz) 31.6
    (rrrrr)            1–3                                          (vvvvv) 67.       (xxxxx) 54.
                                                                            8                 8
(aaaaaa)
Current Benefits and Reward Policies
In all the companies surveyed, the compensation package includes various benefits and rewards as well. Though




                                                          1158
there are differences, all the companies surveyed state that the benefits are very attractive and include housing loan,
vehicle loan, medical benefits, insurance, staff development program (company sponsors staff to go for further
education), stock option scheme, petrol allowance for senior management staff, transfer allowance, compassionate
leave, and so on. Some of the employees interviewed opined that besides the pay, which is rather competitive, it is
the benefits that made them stay on in the company. The following section will trace the current trends in benefits
and rewards offered by the various companies.
(bbbbbb)          Medical and Dental Benefits
One of the benefits that all the companies boast of is the very good medical benefit, which is extended to the
immediate family too. Employees in GMCC agree that the company’s medical benefits are one of the best in the
area. In BCC, each family member is allowed to seek treatment at medical clinics for up to 30 times a year at the
company’s expense. However, there is no limit as to the medical bill. If they seek medical treatment at specialist
hospitals, the maximum medical expenditure allowed is RM500 for each family member though there is no limit for
the employee. As for hospitalization fees, the company bears up to RM12,5004 for each family member each time.
If it exceeds the amount the company has a co-insurance scheme to cover the extra expenditure. In this case, the
employee will pay 20% and the balance covered by insurance. For dental allowance, employees can claim up to
RM300 a year. Similarly in JCC and MCC, medical benefits cover both the employee and their families (up to 5
children). Executives in MCC can also claim up to RM500 for dental care. Non-executives are eligible up to
second-class ward at general hospitals.
(cccccc) Housing and Vehicle Loan Interest Subsidy
Interests for both vehicle and housing loans in GMCC are subsidized by as much 50%, with maximum limit at
RM5,000. In JCC, the company encourages all staff to have their own vehicle. The amount that an employee can
loan from the company depends on their job grade and salary.5 For example, for grade 5 and below, the maximum
loan is RM35,000. For grades 6 to 9, the company allows up to RM45,000, for grades 10 to 13, it is up to
RM60,000 and for grade 14 and above RM80,000. The company charges 4% interest on all motor vehicle loans. It
is calculated on the balance of the loan, that is, the flat rate is about 2%. The company also encourages employees
to own houses. For this, the company provides interest subsidy for housing loans. The company subsidizes 5% of
the amount of interest that the employee has to pay back to the bank for the housing loan.6 This is calculated for the
duration of the loan and it would be credited back to the salary on a monthly basis. This amount is calculated based
on a certain formula set by the company. All interest subsidies are taxable.
          In BCC, employees are given vehicle allowance if they buy a car. Only employees with more than one year
of service are eligible for this allowance. The company actually subsidizes 4% of the interest rates on car loan. If
the actual interest rate for the loan is less than 4%, the balance will be credited back to the employee. In short, the
employee actually gains if he takes a car loan that charges less than 4% interest. Employees tend to change cars and
a glance at the parking lot in the plant actually confirms this.7 Similarly, for the housing loan subsidy, the company
reimburses 6% of the interest rate. About 90% of the employees have benefited from this attractive interest
allowance. For a monthly housing loan installment of RM1,300, as much as RM800 comes from the company.
Most prefer to buy rather than rent because the company does not subsidize the rental for the house. Though the
payment is the same for rental and loan installment, the buyer can claim ownership of the property after paying off
the loan. Thus, if the employee does not take the housing loan, he/she loses the benefit.
        All employees in MCC are eligible for the housing loan. The eligibility for housing loan for each employee
depends on which job grade he/she is in. The employees repay the loan in monthly installments, which is deducted
from the salary. However, not everyone is entitled for the vehicle loan. Vehicle loans are charged 3.5% interest and
the amount for executive starts at RM60,000. The amount of the loan depends on the job grade as well, but the
difference from one job grade to another is not that great. A difference that can be found in MCC is that the
company does not provide company cars for those in higher management. Instead, every five years, senior
managers and above are given a grant to purchase a vehicle of their choice. After five years, they are allowed to keep
the car as their own. But if they resign within the five years, they have to pay back or return the car to the company.
On top of that, they are given a certain amount for vehicle maintenance and paid smart card for petrol. For the
Managing Director/Chief Executive Officer, besides the grant, he is given a driver’s allowance. It is a cash
allowance. In general, the higher one is in the job grade, the higher the benefits. For example, those in higher




                                                        1159
management are also eligible for utility allowances.
(dddddd)           Education Grant
GMCC’s education grant allows staff to sign up for certificate, diploma or degree programs. An application for
study grant is normally approved if the study is within the job scope or future job scope of the employee. The
company does not grant long-term study leave for staff to attend courses and therefore, staff has to go for part-time
courses that are conducted outside their office hours. Though no study leave is given, the company permits its staff
to take leave for examinations. Course fees will only be reimbursed to the employee on successful completion of
the course. The company subsidizes 50% of the cost of the course up to a maximum of RM10,000. No bond is
attached to the education grant and staff is free to leave the organization after finishing their studies. There is also
no revision in pay on gaining an extra qualification. Upon graduation, one can discuss with management on a pay
revision but this is rarely granted. Despite that, the executives do not seem deter and many pursue the courses for
self-actualization rather than hoping for a promotion or pay revision.
                   In JCC, there is no study grant for its employees though the company encourages its staff to go for
further studies. The company is still unclear as far as this policy is concerned. It is still at the drafting stage. The
cost involved is high and the company is unsure of its returns. In the past, employees have been sent to Japan for
training. Though there is a bond attached, some left after the bonding period. Because of this, the company is quite
hesitant in implementing the study grant policy. No bonds are attached to local external training and bonds are only
for mid- to long-term overseas training. As for BCC, financial assistance is given to employees to pursue Masters
degree, Bachelor degrees, diplomas and special certificates. For example, those who sign up for the MBA course
are provided 85% financial assistance for course fee and study materials. There is a two-year bond for the financial
assistance taken which is interest free.
          MCC also encourages its staff to go for self-development and sends its staff for further education. For
example, four employees were sent for a Masters program – two abroad and two locally. Many more were sent for
diploma programs conducted by local universities on a part time basis. The company pays for everything during the
whole duration of the course. Employees who are sent for further education are selected based on their potential.8
On completion of the course, they have to serve the bond set by the company.9 If they breach the contract, they are
required to reimburse the company. Most who do not serve the bond are normally given better offers elsewhere.
For example, after serving two years, the employee may be offered a salary, which is double or triple that of what
he/she is getting in the current company. So, it is better to leave and pay back the amount owed to the company.
(eeeeee) Insurance
One important benefit provided by JCC is the group insurance for all employees. Besides covering death and total
permanent disability, the group insurance covers hospitalization fees as well.10 Families of employees are not
covered by this insurance but by other packages. There is the outpatient package where single non-executives are
covered up to RM1,200 a year. Those with families are covered up to RM1,700. For executives, there is no limit
for outpatient treatment. However, the company sets a limit for their families, that is up to a maximum of RM1,700
while for Assistant Managers and above there is no limit for their families. In BCC, all employees are also covered
by the personal accident (PA) scheme for death and total permanent disability. The payment for death as a result of
an accident at the plant is 72 times that of the employee’s salary. For normal death, it is 36 times of the salary. In
MCC, executives are covered by personal insurance of RM250,000 and for non-executives up to RM150,000.
(ffffff) Outstation Allowances
In all the companies surveyed, allowances are given for accommodation, food and traveling when they are out for
official duties. In JCC, staff working outstation can either use the company car or claim for traveling allowance.
For food allowance, the company pays the actual amount spent if it is for entertaining clients but if it is for personal
expenses on official duties, the employee is paid the amount that he/she is eligible. As for accommodation, it is paid
based on the actual amount spent or the maximum that the employee is eligible. In BCC, petrol allowance is only
for heads of departments. Some staffs are also eligible for entertainment allowance but they claim based on the
actual amount spent. As for traveling abroad, all executives in MCC can go for business class as long as the journey
is more than six hours.
(gggggg) Stock Option Scheme
As far as GMCC is concerned, there is no stock option scheme and there are no plans to implement share option




                                                        1160
scheme in the near future. Similarly, in JCC there are no stock option schemes as it is not a public listed company.
Employees in BCC, however are allowed to participate in the stock option scheme known as “share match”. This
scheme depends on the group performance and the average salary for the year. Every year the group performance
will be compared with the performance of six other petrochemical groups. Results for the past three years will be
compared and if the company ranks first or second globally, it is placed in the first tier, which is 5% of the average
salary. For the second tier, it is 4% and for the third tier 3%. For every share bought by the employee, it will be
matched by another share given by the company, that is, ‘buy one, free one’. In MCC, all permanent staffs are
eligible for the stock option scheme.
(hhhhhh)          External Training Allowances
In all the companies surveyed, staffs that are sent for external training are eligible for official outstation allowances,
such as traveling and accommodation allowances. The training package is paid for by the company and on
completion of the course they are expected to conduct in-house training. No extra allowance is given to those who
conduct such in-house courses. There is also no incentive to encourage them to share the knowledge with others.
However, in MCC, employees who carry out non-routine tasks are given some credit during assessment.11 In
GMCC, for line managers who are called to conduct courses outside, they are given time off during office hours.
For this, prior permission is necessary and the purpose for conducting a course outside has to be justified.
(iiiiii) Other Benefits and Rewards
Other benefits provided by GMCC include an annual Family Day for the employees and their family. There is also
an annual dinner in October where all staff and their spouses are invited. There is also the long service award but so
far none of the employees has achieved that, as it requires a minimum of 10 years of service. Other rewards include
cash paid out when they successfully rectify whatever the cause of a plant’s shut down. There is also the low injury
benefit whereby if there is no injury for a certain period of time; vouchers will be given out to the staff concerned.
The emphasis is on safety in the organization. There is also the Employees’ Suggestion Scheme for ideas
contributed by the employees.12 The company has a special committee to sift through the suggestions and give the
reward accordingly.
         In JCC, loyal employees are given a certificate of long service and bank certificate premiums, which they
can cash back later after their fifth and tenth year of service with the company. At the end of the year during the
annual dinner, various awards will be given out including ‘Employee of the Year’ award. Family Day is carried out
every year and every employee and their family are invited to join. It is normally held at some resort and the
company pays for all the expenses. The main purpose is for the employees to mingle with each other but employees
tend to stick to their own family. It has become so routine that employees are no longer more motivated after
Family Day. The Japanese expatriates too do not mix much with the local staff.
         Benefits provided by BCC are free golf membership and sports club membership for executives. The
company rewards employees for outstanding performance in two ways. Firstly, is the annual pay increment, which
is performance-based and determined by the ratings during the performance appraisal? Secondly, is the rewards and
recognition program that rewards employees for outstanding work? A reward is also given for excellent suggestions.
The company does not have the ‘Employee of the Month’ or ‘Employee of the Year’ award. To give recognition to
those with long service in the company, a ‘Service Award’ is given for every 5 years of service.
         In MCC, long service award is handed out to employees who are loyal to the company.13 Besides this, the
company shows its appreciation in other ways, such as giving them dinners or tokens at the end of the year. Tokens
are also given out to those who do not take any medical chits (MC) in the year. The company also rewards children
of employees who have shown excellent results in public examinations. The company also allows maternity leave
with full pay for up to 5 children. Paternity leave for every child is also given - one day for executives and three
days for non-executives.
         For senior managers and above, subscription for sports club are paid by the company. However, they must
get approval from the company before joining the club. The company also carries out a lot of recreational activities
to maintain industrial harmony - annual dinners, Family Day, Quality Day, Health, Safety and Environment Day,
and so on. Besides that, free meals are given to those who break fast at the workplace during the fasting month. All
these somehow have a positive impact on the company in the sense that employees accept the yearly increment
given to them without much grouses. Besides, turnover is low.




                                                         1161
The Impact of Benefits and Rewards Policies on Employee Satisfaction

The following section analyzes the impact of benefits and rewards policies on employee satisfaction in the
companies surveyed. The satisfaction level of the employees in each of the companies is first analyzed and a
comparison is then made in an effort to determine the practices desire by the employees. HR practitioners could use
the outcome of the findings to consider the most appropriate policies for their organization.
          The respondents in GMCC are generally satisfied with the benefits and rewards policies of the
organization. Most of the statements that are directly related to the benefit package of the organization have a mean
of more than 3 except for respondents’ satisfaction with the retirement plan, which has a mean of 2.87. The mean
for respondents’ satisfaction with the benefit package is 3.61 and a mode of 4. The average mean for respondents’
satisfaction with the benefit policies based on the six questions related to the benefit package is 20.97.14
Categorizing them according to their level of satisfaction, the analysis shows that more than half of the respondents
(53.2%) said that they are satisfied while another 43.5% state that they are very satisfied with the benefit policies.
Only 3.2% of the respondents are dissatisfied with their benefit package.
          As far as recognition and rewards are concerned, most of the respondents in GMCC are satisfied with the
company’s policies. All the questions show a mode of 4 except for one on whether enough recognition was given
for the amount of work they do, which has a mode of 3. Based on the analysis of the five questions, the average
mean for the rewards policy of the organization is 16.53. Thus, respondents are generally satisfied with the reward
policies of the organization.15 Analyzing the level of the respondents’ satisfaction with the reward policies, 87.1% of
the respondents are satisfied with the reward policies. 27.4% of the respondents are very satisfied and 59.7% state
that they are satisfied. 12.9% are dissatisfied with the reward policies. However, none of the respondents showed
that they are very dissatisfied.
          As in GMCC, the mean for most of the items used to measure the benefits policies of JCC is more than 3.
However, respondents are not satisfied with the retirement plan (2.84) of the organization. Though the mean for “I
am satisfied with the benefit package’ is 3.09, the average mean for all the items used to measure respondents’
satisfaction with the benefits policies of the company is 18.59, indicating that respondents are not too satisfied with
the benefits policies of the company. A mode of 3 was obtained for all the items except for the item where they
could access information easily and have a good understanding of their benefits, which has a mode of 4.
Categorizing them according to their level of satisfaction, the analysis shows that the majority of the respondents
(71.4%) said that they are satisfied while another 14.4% state that they are very satisfied with the benefit policies.
Though no one in the company is very dissatisfied, 14.3% of the respondents are dissatisfied with their benefit
package.
          Analyzing the reward system of the company, there is no clear-cut indication that the respondents are
satisfied with the reward policies of the organization. Of the 5 items to test this, 2 have a mean of less than 3. As
for the other three items, though a mean of more than 3 is obtained, it is rather low. Among the items with a mean of
less than 3 is whether recognition, rewards and bonuses are given fairly, which has a mean of 2.96. Respondents
also felt that they did not receive enough recognition for the work they do (2.95). Thus, the average mean for this
part of the survey is 15.52, meaning that respondents are not too satisfied with the reward policies of the company.
Analyzing each item individually, the highest mean recorded is 3.32, where respondents agreed that employees in
the company are rewarded according to their job performance. While a mode of 4 for ‘recognition employees
received is appropriate for the level of accomplishment’ was obtained, a mode of 3 was recorded for all the other
items. The level of the respondents’ satisfaction with the reward policies shows that 17.9% of the respondents are
very satisfied and 69.6% are satisfied. 5.4% are dissatisfied with the reward policies and 7.1% of the respondents
said that they are very dissatisfied.
          Analysis on the satisfaction of the respondents in BCC with the benefits of the company showed a mean of
more than 3 for all the statements that are directly related to the benefit package. The mean for respondents’
satisfaction with the benefit package is 3.18 and a mode of 4. The average mean for respondents’ satisfaction with
the benefit policies based on the six questions related to the benefit package is 19.44. Categorizing them according
to their level of satisfaction, more than half of the respondents (53.2%) are satisfied while another 25.8% are very




                                                        1162
satisfied with the benefit policies. However, about a quarter of the respondents (21%) are dissatisfied with their
benefit package.
          As far as recognition and rewards are concerned, a mean of more than 3 was recorded for all of the five
statements used to the measure the level of the respondents’ satisfaction with the reward systems of the company.
This shows that most of the respondents are satisfied with the company’s policies. Based on the analysis of the five
questions, the average mean for the rewards policy of the organization is 16.19. Analyzing the level of the
respondents’ satisfaction with the reward policies, 90.3% of the respondents are satisfied with the reward policies.
25.8% of the respondents are very satisfied and 64.5% said that they are satisfied. None of the respondents showed
that they are very dissatisfied while 9.7% are dissatisfied with the reward policies.
          Similarly for MCC, the mean for all the items used to measure the benefits policies of the company is more
than 3. The average mean for all the items used to measure respondents’ satisfaction with the benefits policies of the
company is 20.39, indicating that respondents are generally satisfied with the benefits policies of the company. A
mode of 4 was obtained for four out of the six items indicating a relatively high level of satisfaction with the benefits
policies. As to their level of satisfaction with the benefit policies, the analysis shows that half of the respondents
(50%) said that they are satisfied while another 36.8% opined that they are very satisfied with the benefit policies.
Though no one in the company is very dissatisfied, 13.2% of the respondents are dissatisfied with their benefit
package.
          Analyzing the reward system of the company, most of the items have a mean of more than 3, though rather
low. Respondents felt that the company does not highly reward those who acquire skills for themselves and later
teach their fellow workers (2.87) and that they do not receive enough recognition for the work they do (3.03). The
overall average mean at 15.34 shows that respondents are not too satisfied with the reward policies of the company.
The highest mean recorded is 3.21, where respondents agreed that recognition employees received is appropriate for
the level of accomplishment. The level of the respondents’ satisfaction with the reward policies shows that 79% of
the respondents are satisfied, including 23.7% very satisfied. More than half of the respondents (55.3%) are
satisfied while 10.5% are either dissatisfied or very dissatisfied with the reward policies. The findings of the impact
of benefits and reward policies on employee satisfaction in the four companies are summarized in the Table 2 below.
(jjjjjj)
                                               (kkkkkk)
                                                 (llllll)
                                            (mmmmmm)
                                               (nnnnnn)
                                               (oooooo)
                                               (pppppp)
                                               (qqqqqq)
                                                 (rrrrrr)
                                               (ssssss)
                                                 (tttttt)
          (uuuuuu) TABLE 2: EMPLOYEES’ SATISFACTION WITH THE BENEFIT AND REWARD POLICIES
                                           (wwwwww)          (xxxxxx)        (yyyyyy)           (zzzzzz) MCC
                                                      MCC               CC            CC
                                           (aaaaaaa)         (ccccccc)(ddddddd)
                                                      (bbbbbbb)              (eeeeeee)(fffffff) (ggggggg)(hhhhhhh)
           (vvvvvv)          Benefits
                                                    e                 e            e                  e
                                                    a                 a            a                  a
                                                    n                 n            n                  n
     (iiiiiii) I      have     a                             (lllllll) (mmmmmmm) (ooooooo)
                                      good (jjjjjjj) (kkkkkkk)               (nnnnnnn)          (ppppppp)(qqqqqqq)
              understanding      of    my           .      2          .    2       .          9       .       0
              benefits at my company                5      .          2    .       6          .       5       .
              including         retirement          2      9          3    9       0          7       0       5
              benefits and can access
              information easily




                                                         1163
(rrrrrrr) I am satisfied with the       (sssssss) (ttttttt) (uuuuuuu)     (vvvvvvv)  (wwwwwww)  (xxxxxxx)    (yyyyyyy)    (zzzzzzz)
        benefit package                          .           9         .          5          .           2            .            2
                                                 6           .         0          .          1                        4            .
                                                 1           3         9          7          8                        5            6
(aaaaaaaa)           The employee (bbbbbbbb)        (cccccccc) (dddddddd) (eeeeeeee) (ffffffff) (gggggggg)   (hhhhhhhh)   (iiiiiiii)
         benefits I received are                 .           9         .          2          .           3            .            7
         attractive and competitive              7                     0          .          1           .            5            .
                                                 4                     0          1          9           6            8            9
(jjjjjjjj) I am satisfied with my (kkkkkkkk)                              (nnnnnnnn)
                                                    (llllllll) (mmmmmmmm) (oooooooo)            (pppppppp)   (qqqqqqqq)   (rrrrrrrr)
         retirement plan                         .           1         .          6          .           7            .            4
                                                 8                     8          .          0           .            3            .
                                                 7                     4          1          3           5            9            8
(ssssssss)           Overall, I think (tttttttt) (uuuuuuuu)    (vvvvvvvv)            (xxxxxxxx)
                                                                          (wwwwwwww) (yyyyyyyy)              (zzzzzzzz)   (aaaaaaaaa)
         the amount of money I pay               .           0         .          4          .           1            .            2
         for my benefits is a good               5                     2                     3           .            2            .
         value                                   0                     0                     1           9            9            1
(bbbbbbbbb)          Benefits           (ccccccccc) (ddddddddd)(eeeeeeeee)(fffffffff)(ggggggggg)(hhhhhhhhh)  (iiiiiiiii) (jjjjjjjjj)
         available are appropriate for           .           5         .          1          .           3            .            0
         my needs and those of my                7           .         2          .          1           .            1
         family                                  3           8         3          1          3           6            8
(kkkkkkkkk)          Average Mean       (lllllllll) (mmmmmmmmm)(nnnnnnnnn)(ooooooooo)(ppppppppp)(qqqqqqqqq)  (rrrrrrrrr)(sssssssss)
                                                 0                     8                     9                        0
                                                 .                     .                     .                        .
                                                 9                     5                     4                        3
                                                 7                     9                     4                        9
(ttttttttt) Very satisfied              (uuuuuuuuu) (vvvvvvvvv)           (xxxxxxxxx)
                                                               (wwwwwwwww) (yyyyyyyyy)          (zzzzzzzzz)  (aaaaaaaaaa) (bbbbbbbbbb)
                                                             3                    4                      5                         6
                                                             .                    .                      .                         .
                                                             5                    4                      8                         8
(cccccccccc)         Satisfied          (dddddddddd)           (ffffffffff)gggggggggg)
                                                    (eeeeeeeeee)          (                     (iiiiiiiiii) (jjjjjjjjjj) (kkkkkkkkkk)
                                                                                     (hhhhhhhhhh)
                                                             3                    1                      3                         0
                                                             .                    .                      .
                                                             2                    4                      2
(llllllllll) Total                      (mmmmmmmmmm)(nnnnnnnnnn)
                                                               (oooooooooo)
                                                                          (pppppppppp)
                                                                                     (qqqqqqqqqq)
                                                                                                (rrrrrrrrrr) (ssssssssss) (tttttttttt)
                                                             6                    5                      9                         6
                                                             .                    .                                                .
                                                             7                    8                                                8
(uuuuuuuuuu)         Dissatisfied       (vvvvvvvvvv)(wwwwwwwwww)
                                                               (xxxxxxxxxx)
                                                                          (yyyyyyyyyy)
                                                                                     (zzzzzzzzzz)
                                                                                                (aaaaaaaaaaa)(bbbbbbbbbbb)(ccccccccccc)
                                                             .                    4                      1                         3
                                                             2                    .                                                .
                                                                                  3                                                2
(ddddddddddd) Very dissatisfied (eeeeeeeeeee)                  (ggggggggggg) (iiiiiiiiiii)(jjjjjjjjjjj)(kkkkkkkkkkk)
                                                    (fffffffffff)         (hhhhhhhhhhh)                                   (lllllllllll)
(mmmmmmmmmmm)                  Total                (ooooooooooo) (qqqqqqqqqqq) (sssssssssss)
                                        (nnnnnnnnnnn) (ppppppppppp) (rrrrrrrrrrr)                            (ttttttttttt)(uuuuuuuuuuu)
                                                             .                    4                      1                         3
                                                             2                    .                                                .
                                                                                  3                                                2
     (vvvvvvvvvvv) Rewards                          (xxxxxxxxxxx) (zzzzzzzzzzz)
                                        (wwwwwwwwwww)                                           (bbbbbbbbbbbb) (dddddddddddd)
                                                               (yyyyyyyyyyy) (aaaaaaaaaaaa) (cccccccccccc)
(eeeeeeeeeeee) Recognition                          (gggggggggggg) (iiiiiiiiiiii)
                                        (ffffffffffff)         (hhhhhhhhhhhh) (jjjjjjjjjjjj)                 (llllllllllll)
                                                                                                (kkkkkkkkkkkk) (mmmmmmmmmmmm)
         employees      received     is          .           3         .          3          .           3            .            0




                                                      1164
     appropriate for the level of            3       .           1       .        2           .        2
     accomplishment                          5       2           3       9        7           5        1
(nnnnnnnnnnnn) Recognition,                     (pppppppppppp) (rrrrrrrrrrrr)
                                        (oooooooooooo) (qqqqqqqqqqqq) (ssssssssssss)              (uuuuuuuuuuuu)
                                                                                     (tttttttttttt)       (vvvvvvvvvvvv)
     rewards and bonuses are                 .       4           .       2        .           8        .       4
     given fairly where I work               3       .           9       .        0           .        1       .
                                             7       8           6       2        5           7        3       7
(wwwwwwwwwwww) In this                          (yyyyyyyyyyyy) (aaaaaaaaaaaaa) (ccccccccccccc) (eeeeeeeeeeeee)
                                        (xxxxxxxxxxxx) (zzzzzzzzzzzz) (bbbbbbbbbbbbb)(ddddddddddddd)
        company       people      are        .       4           .       1        .           3        .       0
        rewarded according to their          5       .           3       .        5                    1
        job performance                      5       5           2       8        2                    1
(fffffffffffff)     My       company            (hhhhhhhhhhhhh) (jjjjjjjjjjjjj)
                                        (ggggggggggggg) (iiiiiiiiiiiii)              (lllllllllllll)      (nnnnnnnnnnnnn)
                                                                             (kkkkkkkkkkkkk) (mmmmmmmmmmmmm)
        highly rewards those who             .       0           .       1        .           7        .       1
        acquire       skills      for        0       .           1                2           .        8       .
        themselves and later teach           6       3           6                3           1        7       6
        their fellow workers
(ooooooooooooo)I receive enough                      (qqqqqqqqqqqqq)(sssssssssssss) (uuuuuuuuuuuuu) (wwwwwwwwwwwww)
                                        (ppppppppppppp)(rrrrrrrrrrrrr)                      (ttttttttttttt)         (vvvvvvvvvvvvv)
        recognition for the work                 .            8            .            5            .           5          .          4
        that I do                                1            .            9                         1           .          0          .
                                                 9            7            5                         3           4          3          2
(xxxxxxxxxxxxx) Average Mean                         (zzzzzzzzzzzzz) (bbbbbbbbbbbbbb)                    (dddddddddddddd)
                                        (yyyyyyyyyyyyy) (aaaaaaaaaaaaaa) (cccccccccccccc) (eeeeeeeeeeeeee)                     (ffffffffffffff)
                                                 6                         5                         6                      5
                                                 .                         .                         .                      .
                                                 5                         5                         1                      3
                                                 3                         2                         9                      4
(gggggggggggggg)             Very                    (iiiiiiiiiiiiii)
                                        (hhhhhhhhhhhhhh)          (jjjjjjjjjjjjjj)
                                                                               (kkkkkkkkkkkkkk)
                                                                                            (llllllllllllll)        (nnnnnnnnnnnnnn)
                                                                                                         (mmmmmmmmmmmmmm)      (oooooooooooooo)
     satisfied                                                7                         7                        5                     3
                                                              .                         .                        .                     .
                                                              4                         9                        8                     7
(pppppppppppppp)             Satisfie   (qqqqqqqqqqqqqq)
                                                     (rrrrrrrrrrrrrr)
                                                                  (ssssssssssssss) (uuuuuuuuuuuuuu)
                                                                               (tttttttttttttt)                     (wwwwwwwwwwwwww)
                                                                                                         (vvvvvvvvvvvvvv)      (xxxxxxxxxxxxxx)
     d                                                        9                         9                        4                     5
                                                              .                         .                        .                     .
                                                              7                         6                        5                     3
(yyyyyyyyyyyyyy)             Total                   (aaaaaaaaaaaaaaa)(ccccccccccccccc)(eeeeeeeeeeeeeee)(ggggggggggggggg)
                                        (zzzzzzzzzzzzzz) (bbbbbbbbbbbbbbb)                  (ddddddddddddddd)       (fffffffffffffff)
                                                              7                         7                        0                     9
                                                              .                         .                        .
                                                              1                         5                        3
(hhhhhhhhhhhhhhh)            Dissati                 (jjjjjjjjjjjjjjj)
                                        (iiiiiiiiiiiiiii)         (kkkkkkkkkkkkkkk)
                                                                               (lllllllllllllll)
                                                                                            (mmmmmmmmmmmmmmm)       (ooooooooooooooo)
                                                                                                         (nnnnnnnnnnnnnnn)     (ppppppppppppppp)
     sfied                                                    2                         .                        .                     0
                                                              .                         4                        7                     .
                                                              9                                                                        5
(qqqqqqqqqqqqqqq)            Very       (rrrrrrrrrrrrrrr)
                                                     (sssssssssssssss) (uuuuuuuuuuuuuuu)
                                                                  (ttttttttttttttt)                      (wwwwwwwwwwwwwww)
                                                                                            (vvvvvvvvvvvvvvv)                  (yyyyyyyyyyyyyyy)
                                                                                                                    (xxxxxxxxxxxxxxx)
     dissatisfied                                                                       .                                              0
                                                                                        1                                              .
                                                                                                                                       5
(zzzzzzzzzzzzzzz)            Total      (aaaaaaaaaaaaaaaa)
                                                     (bbbbbbbbbbbbbbbb)
                                                                  (cccccccccccccccc)
                                                                               (dddddddddddddddd)        (ffffffffffffffff) (hhhhhhhhhhhhhhhh)
                                                                                            (eeeeeeeeeeeeeeee)      (gggggggggggggggg)
                                                              2                         2                        .                     1
                                                              .                         .                        7
                                                              9                         5
    (iiiiiiiiiiiiiiii)   Level of                    (kkkkkkkkkkkkkkkk)
                                        (jjjjjjjjjjjjjjjj)        (llllllllllllllll)        (nnnnnnnnnnnnnnnn)
                                                                                                         (oooooooooooooooo)
                                                                               (mmmmmmmmmmmmmmmm) (qqqqqqqqqqqqqqqq)(pppppppppppppppp)




                                                       1165
                     Satisfaction*
     (rrrrrrrrrrrrrrrr) Benefit Policies              (tttttttttttttttt)   (vvvvvvvvvvvvvvvv)
                                             (ssssssssssssssss) (uuuuuuuuuuuuuuuu)            (xxxxxxxxxxxxxxxx)
                                                                                   (wwwwwwwwwwwwwwww)          (zzzzzzzzzzzzzzzz)
                                                                                                       (yyyyyyyyyyyyyyyy)
                                                    .                    .                 .                .
                                                    4                    0                 0                2
                                                    0                    0                 5                4
       (aaaaaaaaaaaaaaaaa)         Rewar     (bbbbbbbbbbbbbbbbb)
                                                      (ccccccccccccccccc)
                                                                   (ddddddddddddddddd)
                                                                           (eeeeeeeeeeeeeeeee)
                                                                                   (fffffffffffffffff) (hhhhhhhhhhhhhhhhh)
                                                                                                               (iiiiiiiiiiiiiiiii)
                                                                                              (ggggggggggggggggg)
                 d Policies                         .                    .                 .                .
                                                    1                    9                 0                9
                                                    5                    8                 6                2
*A mean of more than 2 indicates satisfaction.
(jjjjjjjjjjjjjjjjj)
             Based on the above findings, respondents in GMCC seem most satisfied with the benefit and reward
policies of the company. Respondents in MCC are satisfied with the benefit policies but not too satisfied with the
reward policies. Among the four companies, the level of satisfaction of the respondents in MCC with the reward
policies is the lowest. However, the level of satisfaction with the benefit policies in MCC is higher than that in BCC
and JCC. The level of satisfaction of respondents in BCC with the benefit and reward policies is higher than that of
JCC.
             A conclusion that can be drawn from this is that foreign-owned MNCs in Malaysia may not be providing
the best benefit and reward policies for their employees. Although more globalized and more exposed to the
different policies are available, the benefit and reward policies of these organizations are not as motivating as those
drawn up by companies with some Malaysian interests. Companies with some Malaysian interests seem to have
better understanding of the benefits and rewards desire by the employees. In general, much depends on what the
company can offer its employees. Lucrative offers would definitely enhance the satisfaction level of the employees
with the benefit and reward policies.

Implications for Human Resource Practitioners

As far as benefits are concerned, good and flexible benefits would not only entice potential recruits but also help in
retention. Though the benefit packages in all the four companies differ from one another, they are generally
lucrative enough to attract talent workers as well as retain current employees. This is rather encouraging as more
long-term plans could be carried out to improve the competitiveness of the companies. As skills are so much in
demand due to technological advancement, these companies can now embark on continuous human capital
development programs to boost the capabilities of the employees. If returns on investment in employees are certain,
companies are more willing to proceed with training and development. With more capable workers, companies
would be confident in taking up challenges in the global market. Moreover, training and development improves
employees’ motivation and efficiency, as training adds variety to their jobs and enhanced skills expedite the work
process.
          The provision of education grant for employees supports the government’s call for lifelong education. It
encourages employees to constantly upgrade their skills making them more competent workers in the long run. It
also promotes healthy competition and knowledge sharing among workers. Besides, some of the companies
subsidized the cost of the course without any bond attach. As there is no increment or promotion on completion of
the course, some employees may choose to leave. This is a setback for the company as there would be no returns for
the investment made. Thus, companies should have clear and specific criteria in evaluation so that employees do
not feel that it is useless going for self-development. For example, though an extra academic qualification may not
warrant a promotion or increment in pay, skills transferred to the workplace may be taken into consideration. The
reimbursement of fees on successful completion of the course ensures that employees are serious when they applied
for the grant. If there is no such ruling, those who have signed up may drop out half way through the course, which
would be a loss to the company.
          A pre-requisite for some employees who attend external training is the need to conduct in-house training on




                                                         1166
completion of the program. This promotes transferring of skills and knowledge gained from external programs
which may be rather costly. Besides, it is also a form of evaluation of training and helps justify if indeed learning
has taken place. Moreover, by conducting in-house training, the employee may improve on his training skills and in
the long run a pool of qualified and experienced trainers may be created. Eventually, in-house trainers may run
programs for other employees and thus help cut training costs. In addition, it boosts the employee’s morale for the
recognition given. Trainees, on the other hand may also feel more comfortable having an in-house trainer rather
than an external trainer running the program. This will help them settle in faster and get on with the learning. The
ice-breaking session could be minimized if both trainers and trainees are familiar with each other.
          None of the companies have a golden parachute contract for their top executives. This would be really
devastating for senior management if they were forced to leave in the event of a merger or acquisition. Being key
players in the organization, they should be given the recognition, especially in their twilight years. During
recession, a lot of uncertainty will set in and in recent years many major corporations in Malaysia have introduced
the voluntary separation scheme (VSS) where employees are given an option to leave the company. Capable
workers who are able to market themselves will not hesitate to leave. But senior management may find it difficult to
adapt to a new work environment. Other problems may set in and the expertise of these personnel may not be fully
utilized. However, with the golden parachute contract, top executives would be able to contribute to the
organization without having to worry about their future if they were asked to leave. Companies should give this
some consideration.
          The policy to reward employees for rectifying a problem in the company is a positive move to encourage
innovativeness. This should be encouraged to get workers involved in the affairs of the organization. Employee
involvement and empowerment would enhance employees’ commitment. Besides, it boosts employees’ morale if
the company adopts their suggestion, as they would feel that they have contributed to the betterment of the
workplace. The acknowledgement of suggestions given by employees also encourages employees to help solve
certain problems faced by the companies. In the process, a pool of ideas is generated. In some of the companies,
employees’ suggestions are reviewed quarterly and vouchers are given for outstanding suggestions. Besides this,
incentive in the form of bank premium certificates is encouraging. Giving credit to employees who carry out non-
routine tasks during assessment is also a positive move to enhance employees’ motivation. Giving tokens to
employees who do not take any medical chits would also encourage employees not to absent unnecessarily.
Allowing employees paid leave to represent the company at national functions also improves patriotism among the
employees.
          Social programs seem to be in place for all the companies, as evidenced by Family Day, annual dinners,
and other less formal gatherings. It helps promote harmony and encourages social interaction among staffs. Team
working and knowledge would be enhanced and it encourages networking among staffs, especially if the functions
are held jointly with other companies in the group. Recognition and rewards giving out during such functions also
has a motivating effect on the employees.
          Analyzing the satisfaction of employees in the four companies with the benefits and rewards policies, it can
be concluded that the majority of the employees are satisfied. However, focus should be given to certain aspects
that employees are not so satisfied so as to improve on the current policies. To improve retention rate, it is essential
for management to look into these grouses and make the organization a more attractive place to work in. If the
employees’ discontentment were not noted, dissatisfied employees would not be totally committed to the
organization and this will have a negative effect on the organization.
          As far as benefits are concerned, employees in GMCC seem most satisfied with the benefits package and
feel that the package is attractive and competitive. Many also opine that the benefits available are appropriate for
their needs and those of their family. Employees in MCC are of the same opinion and are generally satisfied.
However, less than half of the respondents in BCC and JCC are satisfied with the above policies. Employees in JCC
have the lowest level of satisfaction with benefits package. Except for JCC, employees in all the other companies
have a good understanding of their benefits including retirement benefits and can access information easily.
However, only employees in GMCC think that overall, the amount of money they pay for the benefits is good value.
As for retirement plans, less than half of the respondents in all the companies are satisfied with the retirement plans.
This shows that the employees are concerned about life after retirement and are apprehensive about the current




                                                        1167
retirement policies. Companies ignoring this will lose competent workers to competitors with more comprehensive
retirement plans. The benefit programs offered by the companies should also be reviewed, as most of the employees
feel that the money that they pay for the benefits is not good value. Continuing such programs would lead to further
dissatisfaction if employees do not see the benefits that these programs could offer. This could have a spiraling
effect, which may be detrimental to the company in general.
          Most of the employees in all the companies are of the opinion that they are rewarded according to their job
performance. However, they also opine that they do not receive enough recognition for work that they do and are
not highly rewarded for acquiring skills and later teaching those skills to fellow workers. Among the four
companies, only employees in GMCC feel that recognition, rewards and bonuses are given fairly. As to whether
recognition employees received are appropriate for their level of accomplishment, about half of the respondents in
GMCC and MCC thought so. The lack of recognition in these companies would affect the morale of employees and
if measures are not taken to acknowledge the efforts of the employees, employees may not see the need to strive for
the company. Besides, the companies need to tackle the problem of unfairness, especially when companies are
dealing with a multi racial workforce. More objective measures should be introduced to ensure transparency in
awarding recognition, rewards, and bonuses.

Conclusion
Based on the findings of the research, it can be concluded that the benefit and reward policies of all the companies
surveyed are relatively similarly in terms of variety. The difference is in the quality – some companies giving better
terms and conditions as compared to others. However, companies offering better benefit and reward policies seem
to have more satisfied employees. GMCC, for example, which has comparatively more lucrative benefit and reward
policies record the highest level of satisfaction among the four companies. JCC, on the other hand, has relatively
less competitive benefit and reward policies and therefore a lower level of satisfaction. As all four companies are
located in the same industrial area and are of about the same size, employee dissatisfaction may set in if there is a
vast difference in the benefit and reward policies among the companies.
          In all the companies surveyed, the benefit and reward policies include both the standard and flexible plans.
Standards plans are relatively the same for all companies except for share option schemes and pension plans. While
MCC has both, BCC has a share option scheme, thereby creating employee ownership in the company. However,
both these options are not available in GMCC and JCC. While all the other companies provide housing and vehicle
loan interest subsidy, MCC gives out housing and vehicle loans to its employees. The former seems to be a better
option for employees. Though maternity leave is quite common among the companies, MCC seems to be the only
company that has introduced paternity leave as well. Rewarding those who do not take any medical chits is also
something new, as most companies have not introduced this. Education grant too is relatively popular and helps
promote employee development. JCC lacks behind in not having this option for its employees.
          An attractive benefit and reward policy undertaken by all companies is the insurance coverage for its
employees. Though medical benefits are relatively good in all the companies, the availability of an insurance
scheme to cover excess expenditure is definitely a welcome move. Other insurance policies to cover death and
injury at the workplace also help cushion unexpected trauma and relieve employees of unnecessary worry. Besides
being highly subsidized by the companies, the benefits offered by the insurance coverage are relatively competitive.
This is all the more important as it is rare for private companies in Malaysia to provide pension for their employees.
Except for MCC, employees in all the other companies are not satisfied with the retirement plans but it is imperative
that good retirement plans should be available if employees’ satisfaction were to improve.
          Other benefits and rewards vary widely from company to company though there are similarities in some.
But in all the companies surveyed, allowances are not paid to those who acquired skills and transfer them to fellow
workers. As there is no incentive to teach others, to a certain extent it will impede human resource development. If
such an incentive is given, perhaps employees will take the initiative to learn, unlearn and relearn. Knowledge
sharing would be enhanced.




                                                       1168
           As far as the satisfaction level of the employees with the benefit policies of their companies are concerned,
the respondents in GMCC seemed most satisfied and JCC the least. Respondents in BCC are also not as satisfied as
the respondents in MCC with the benefit policies of the company. Similarly, respondents in GMCC are most
satisfied with the reward policies of the company. Respondents in MCC are least satisfied while respondents in
BCC are more satisfied than respondents in JCC.
          In conclusion, it cannot be said with much confidence that respondents in foreign-owned MNCs are more
satisfied with the benefit and reward policies of their companies. As far as benefit policies are concerned, employee
satisfaction seems to be higher in companies that have some Malaysian interests. On the other hand, respondents in
MCC are least enthusiastic with the reward policies of the company. It is anticipated that foreign-owned MNCs
being more globalized and contemporary in their approach would have a benefit and reward package that is not only
globally consistent but at the same time competitive vis-à-vis the local market. However, the findings of the
research have shown otherwise. A general conclusion that can be drawn is that ownership does not seem to have an
effect on employees’ satisfaction with the benefit and reward policies. Regardless of ownership, companies that
offer attractive benefit and reward packages have more satisfied employees. As employee satisfaction has an
impact on productivity, benefit and reward policies that meet employees’ needs are crucial to the competitiveness of
the company.

                                                    References
[1]       Cornish S. and Gilbert K. (2005). Aligning Total Rewards Strategy with Business Success, Mercer
          Human Resource Consulting (http://www.ceoforum.com.au).
[2]       Day K. (2005).        Employee benefits special: catching the best recruits, Accountancy Age,
          (http://www.vnunet.com).
[3]       Heathfield S.M. (2006). Salary and Compensation Trends for Forward Thinking Organizations, Your
          Guide to Human Resources (http://humanresources.about.com).
[4]       Sarvadi, P. (2005). The Best Ways to Reward Employees: Having an effective reward program in place
          can help solve many of your HR issues. (http://www.entrepreneur.com).
[5]       Smith, G.P. (2005). Transforming Workers to Winners: Taking your Workforce to Higher Levels of
          Performance, (http://www.westga.edu).

                                                     End Notes
1
  http://www.vnunet.com
2
  http://www.vnunet.com
3
  http://www.vnunet.com
4
  USD1 = MYR3.56947; \100 = MYR3.25631 (as at 15 May 2006).
5
  Job grades range from grade 1 for general workers to grade 20 for managing director. Senior managers are in
grade 16, managers in grade 15, assistant managers in grade 14 and executives in grade 13. Non-executives are in
grade 9 and below. Clerical staffs are classified as non-executives.
6
  The company will provide this subsidy for the entire duration of the loan as long as the employee is still in the
company’s payroll. Once the employee leaves the company, he/she loses the benefit. However, the company does
not ask an employee who has left to pay back the subsidies given during his/her service with the company.
7
  An executive who owns a year old car was contemplating changing his car and a week later, he was on the road
with a brand new car. Besides new cars, there are also a number of luxury cars in the compound.
8
  The ratings during performance appraisal carry much weight. It also depends on their interest in attending the
course.
9
  For bachelor degree courses, the bond is 10 years for those enrolled in overseas universities and 7 years for those
who studied in local universities. However, the company has not decided on the number of years that Masters
scholars have to serve. Those who attend courses for 3 to 6 months have to fulfill a bond of two years.




                                                        1169
10
   Non-executives and executives are covered up to RM30,000 in hospitalization fees a year and for grade Assistant
Managers and above the coverage is RM60,000. This includes follow-up treatment for serious diseases.
11
   Such employees normally get a rating of at least 2 during the performance planning assessment at the end of the
year, thus qualifying for the merit allowance.
12
   Every valid suggestion that is considered is paid RM10. A suggestion could be as simple as “It is too cold in here.
Could we have a heater installed?” If a suggestion is implemented but incurred cost, then the reward is RM30. But,
if it saves cost the reward is higher depending on how good the suggestion is. To date, the company has paid out as
much as RM800 for a single suggestion.
13
   Employees who have served at least 15 years will be given a plaque and a token of RM1,000. Those with 20 years
of service will get a plaque and a token of RM1,500. Similarly, those with 25 years (RM2,500) and 30 years of
service will get a plaque and a token that is worth more. A brochure will be handed out to these employees to
choose the product that they would like to have depending on the amount of the token. Gifts that were given out to
these employees range from jewelries to pewter and household products.
14
   A mean of more than 15 shows that the respondents are satisfied with the benefit policies of the company.
15
   An average mean of more than 12.5 indicates satisfaction with the reward policies.




                                                       1170