Analysis of HRM and ER in Malaysia

This essay analyzes the human resource management practices and employee relations in Malaysia, focusing on the benefits and negative impact on local employees. It discusses the policies of multinational enterprises (MNEs) and the difference in treatment of employees by subsidiaries and headquarters.

INTERNATIONAL AND
COMPARATIVE HRM AND ER

Introduction
The essay brings out a discussion on analysis of human resource management practises and
employee relations in Malaysia. This essay discusses about the benefits and negative impact
on the local employees (Gunsteren, 2018). This analysis will continue on policies of the
country especially the multinational enterprises (MNEs) by several practises. It is seen that
host employees often are employed indirectly or directly by multinational enterprises (MNEs)
but at the same time, MNEs have their subsidiary organisations in Malaysia (Gunsteren,
2018). The essay will reveal the difference in their treatment of the employees by the
subsidiaries and the work performed by the employees in their headquarters. There is a
significant impact of multi-national companies, employee relations, and human resource
management practises (Gunsteren, 2018).
Analyse contemporary ER and HRM practices in respect
of Malaysia
Employee relation signifies the efforts, which have led to manage the relationships between
the employees. Good employee relations is a competitive advantage for the organisation as it
provides reasonable and fair treatment to every employee. This positive environment leads to
commitment and loyalty towards work. With the changing framework due to increasing
liberalisation, competitiveness, and globalisation, human is no more workers rather they are
more on assets to an organisation (Sasse, Bröckelmann, Goergen, Plütschow, Müller, Kreissl,
& Diehl, 2017). In today`s era, it is seen that Human resource management procedures
include workforce planning, commitment, placement, loyalty, employee engagement,
performance management, motivation, leadership, benefits, compensation, change strategy,
work time control, diversity, flexibility, talent management, rewards, labour relations,
communication and so on. This signifies that some of the elements are closely related to
employee relations. This report brings out several findings, which includes need for the

development in order to reduce the employment of the foreign employees and finally refine
them in such a way to target vulnerable local as well as foreign workers with the required
labour legislations. The main aim of essay is to find the effect of the recent exploitation of the
foreign employees as well as the local employees in the Malaysia (Epstein, Zelefsky, Sjoberg,
Nelson, Egevad, Galluzzi, & Eastham, 2016).
In Malaysia, Employment Act, 1955 and industrial relations Act, 1967 are regulating the
relation between employee and employer relationship in Malaysia. Currently, the country has
the unemployment rate of 3.6 percent as per the economic models. Employee relations in this
country is Multilateral as trade unions plays an important role in the tripartite cycle (Epstein,
Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). With the increased
globalisation, organisations always tend to remain advantageous and competitive. Further,
various aspects affect and increase in organisational profits such as positive employee
relations, which contribute to the sustainable growth in the organisation. It is seen that
employee relation is often criticised by various literatures in relation to union activities,
workplace regulations, and support from labour legislatives (Gunsteren, 2018). Therefore, the
issue of the foreign worker has become an issue as they have grabbed huge attention. It have
been seen that these have ended with crucial changes in recruitment process and it has ended
painfully with a traumatic environment that is not even being acceptable by the workforce of
Malaysia (Epstein, Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). It is seen
that there is no such intermediary named agent who can assist while hiring the foreign
employees in Malaysia. Although, due to suffering of foreign workers, the authority have
considered a joint authority between the human resources and home ministry while managing
the foreign employees. It becomes difficult while outsourcing the foreign workers especially
their safety and the procedure of recruiting all alone. Nearly hundred organisation is handling
more than 26000 workers from foreign through outsourcing system (The daily star, 2018).

Furthermore, HUM deal with existing agents with more time so finally they can relocate the
employees for the selected employers (Epstein, Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi,
& Eastham, 2016). It is aimed to ignore unfair treatment with the employees and other more
issues, which are related to the workers. As per the ministry of human resources, foreigner
are more devoted to their work especially when they are given more work to do as their
request for the job. In addition, the wages is just as opposite to the local workers as foreign
workers have more responsibility for their family as well as they need more money to survive
if the currency is stronger (Gunsteren, 2018). Whereas, local employees deny for extra
working hour which encourages employment of foreign workers. Therefore, finally they (the
companies) moved out to foreign countries to reduce the future cost of the foreign employees.
However, the company is influenced by the initial low cost of hiring the labour at very less
cost. At last, the degree of labour turnover has been increasing as far as the local employees
are concerned. This situation maximises the degree of unemployment for the local
employee’s increases. Local managers and people at high positions in the hierarchy feel more
delighted to have foreign employees rather than choosing local workers (Epstein, Zelefsky,
Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). This led to increase in foreign
employees, which further strengthen the competition for the jobs threatening the jobs of the
local workers. These lead to circumstances where there was high rate of unemployment, low
purchasing power, and negative GDP of the Malaysia, which further prevents the growth of
the economy (The star online, 2018). Other problem can be that local employees are short of
and discriminated while rewarding them. Local employees are threatened with the existence
of the foreign workers and this is because of the lower requirement of compensation, fringe
benefits, and quality of the work. Foreign workers who can afford to get lower wages and
wants employment replaces the local employees who are at the high costs (Gunsteren, 2018).
To stand in the competition, both local as well as the foreign employees are being exploited.

This lead to no difference on the labour wages and industries cleverly exploited them to
achieve maximum profits (The star online, 2018). For example- manufacturing companies
have become competitive while paying the wages to both countries on the basis of marginal
product as it is important to understand high wage of the local workers will mean huge
marginal product and so as the productive. There is a chronic labour migration, which is a
worldwide and regular procedure in Malaysia as it is an leading importer of the labour (The
star online, 2018). Apart from this, settlement migration is majorly driven by the built-in-
demand, which have been stemming from the perspective of process of growth in home
countries where foreign employees enter the nation to take up the jobs of the leisurely life
that attracts several employment opportunities but unfortunately these jobs are grabbed
foreign workers (The star online, 2018). These jobs are tend to mainly fall into two categories
that are at all mutually exclusive such as monotonous processes of work, studious and static
jobs which do not provide setting for the future advancement of careers. Some of the
important examples of these boring jobs include welding, plumbing, automobile repairing,
and metal working. None of these jobs has good recognition but at the same time, they are
not paid well (The daily star, 2018).
With the passage of time, the government has realised that their people are not at all
competitive and do not have the ability to rule the country. Further, it is seen that there is a
great misbalance in the economic sector as well as the social sector. The entry of the foreign
workers has caused several issues. It is because of growing negative perception of the
nation`s populations that has further created many social issues too (The daily star, 2018).
Illegal immigrants started entering the country without any information to the authorities as
these contribute to the loss of the property as well as huge burglary. The crucial issue faced
by the government was severe while prohibiting the illegal entry of the immigrants (Sak,
Kaymaz, Kadkoy, & Kenanoglu, 2018). The rights of the local workers were greatly affected

while hiring illegal immigrants in the construction, domestic assistants, and plantation sector
because they are salaried very low. The country is highly dependent on the low skilled
foreign employees. This has been preventing the economy to grow. As per the Nigeria bank,
it is seen that decreasing local wages and the local trap of productivity that contribute to the
low skills foreign workers have grabbed them to maintain the reasonable needs. From the
time 2011 to 2017, it is seen that the share of skilled jobs has been increasing in Malaysia
where there was an greater change in the period of 2002 and 2010 (Epstein, Zelefsky,
Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). It can deniable from the fact that
foreign workers largely contributes to the economic growth (Blyth, Mladenovic, Nardi,
Ekbia, & Su, 2016). The World Bank have noted that immigrant labour plays an important
role in low as well as high skilled that contributed to the economic growth of the country.
While achieving the economic development, it ensures that the country will achieve high
state of income until 2020 (HR, 2016). Immigrant workers were employed in the organisation
of “McDonalds” with the help of labour supply organisation to have allegedly regarding the
wages, passport snatching and making unethically and illegally and other payment cheats
(Epstein, Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). The employee at
this organisation has claimed that he will earn a salary of 60p for an hour. The employees
have alleged that they are subject to the months, years of exploitation by the human
connection and proper labour supply, which has been contracted by the Malaysian
MacDonald’s in order to supply workers to this restaurant chain in the country. The migrant
workers have claimed that their identity has been confiscated in the contravention of the law
of Malaysia (Epstein, Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). They
says there is always a monthly change when they enter the organisation that have finally
resulted into 25 percent deduction in their own salary. With working with the fast food
chains, it has started to loss of wages of the employees (UCANews, 2019). As operating in

UK and US, the company operates in McDonalds is based on franchise model where the
retail outlets are owned by the organisation. The governmental reports have come up with
allegations of the migrant workers while making the products for Panasonic as well as
Samsung, which are produced in the industrial zones of the country. This industrial sector
reveals the shed lights for the malpractices of the agencies of local supply as reputed by the
international brands in Malaysia (HR, 2016). The workers have complained that majority of
them were threatened to run away from the job without any passports, back pays as they have
entered the illegal work in the market to save money (UCANews, 2019). This will be
vulnerable to detention and arrest by the Malaysian police. Several employees criticised the
McDonalds branch, which are previously employed the workers which has the company`s
headquarter in Malaysia informed it as the issues which are faced by the men. Labour supply
organisation withheld the monthly salary of two to three months. The workers also have the
proof regarding the originality with them (Blyth, Mladenovic, Nardi, Ekbia, & Su, 2016).
McDonald’s have claimed that it has agreed to give 90 percent of the workforce as it has
established the recruitment agencies that have employed from the foreign agencies and the
sub-contractor in the team of MacDonald’s in the country (UCANews, 2019). The company
repeated they are not the employees of McDonalds as they recruited them from the
recruitment agency. The company attempts to repeat it with the human connection HHR in
order to investigate and finally verify certain issues for the non-compliance as shared by the
employees, raising the serious concerns with the help of written and verbal correspondence
(UCANews, 2019). As the workers are not recognised as, the employees of the company and
its efforts are to be addressed to solve the issue. It is the proposal of the company to assume
that most of the foreign employees can be recruited through sponsorships, tying up them with
the sponsorship system, and prevention of the changing jobs (HR, 2016).

Conclusion
Some of the countries plans to restrict the direct impact on the inflow of the migrants so that
they can reduce and minimise the negative effect on local economy. There are several
restriction and other imposition on legal migration, which is imposed to oppose the strong
demand for unnecessary supply of labour, which can be even filled, by the local workers or
an appropriate training can be delegated to prepare the population. It is important to maintain
the duality of the host markets in regards to labour markets so that it can form complementary
with the foreign employees to make a whole of competing group. It is important to comply
with the legal regulations for both local as well as foreign workers so that the entry of the
outside workers can finally improve the functioning of the labour markets by minimising the
bottlenecks, which are created as an illusion in the process of growth. The issue of illegal
immigrants has been occurring in many countries including developing as well as developed
countries. The country has faced increase in crimes rates due to influx of the immigrants.
This increase in turmoil involves immigrant’s misbehaviour to the societies. The economy of
the country will be stacked when government charged to remove the illegal immigrants. It is
seen that 2.4 million people (both local as well as immigrants) focus on crucial sectors while
generating the economic growth such as manufacturing, construction, and plantation
(UCANews, 2019). There is a great risk of exploitation as they seek for justice when they are
the victim of the situation such as Tenaganita, and CARAM (Barslund, & Busse, 2016). The
migrants have to undergo several forms of wage deduction, which can leave it with the high
debt bondage as they have to overseas jobs. Workers can come up with the complaints in
regards to working conditions and poor wages that leads to violation of several acts such as
national wage act and the employment act. Workers with documented subjects leads to the
violation of their rights to violations, detention, deportation and the migrants (Epstein,
Zelefsky, Sjoberg, Nelson, Egevad, Galluzzi, & Eastham, 2016). Therefore, the government

has issued the licenses to the labour outsourcing agencies which do not come in the scrutiny
of the authorities.

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