MULTI-ETHNIC CULTURE AND HUMAN RESOURCE MANAGEMENT PRACTICES OF COMPANIES IN MALAYSIA

Abstract

ABSTRACT

Research in the United States has shown that effective human resource management (HRM) practices such as those that provide workers with skills, information, incentives, and decision-making responsibility are associated with improved performance. However, HRM practices adopted in different countries may not be directly transferable to other countries due to, among other factors, cultural differences. The present paper examined the impact of Malaysian cultural values on HRM practices of companies in Malaysia. Specifically, this study empirically compared HRM practices adopted by firms having different ethnic groups forming the majority of employees. This study found only one factor that differentiates Malay-majority from Chinese-majority firms in HRM practices. The only HRM practice that differed was that managers in Malay-majority firms emphasized more on the use of common goals as motivational tools compared to their Chinese-majority counterparts. Some possible reasons for these findings were discussed.

JEL Classification: J210, J790, M120, Z100