JOURNAL OF BUSINESS & ECONOMIC ANALYSIS - Journal of Business and ...

 
JOURNAL OF BUSINESS & ECONOMIC ANALYSIS - Journal of Business and ...
JOURNAL OF BUSINESS
& ECONOMIC ANALYSIS
                                Volume 3, Number 1 April 2020

Special Issue                         Guest Editor
Managing Human Resources in a         Tan Fee Yean
Dynamic Environment                   Universiti Utara Malaysia

Editor-in-Chief
Ahmed M. Khalid
Universiti Brunei Darussalam

Editors
Leong Vai Shiem
Masairol Masri
Universiti Brunei Darussalam
Editorial Board Members
Editor-in-Chief
Ahmed Masood Khalid, Universiti Brunei Darussalam
Editors
Leong Vai Shiem, Universiti Brunei Darussalam
Masairol bin Haji Masri, Universiti Brunei Darussalam
Assistant Editors
Muhammad Anshari, Universiti Brunei Darussalam
Muhammad Talha Salam, National University of Computer and Emerging Sciences,
Pakistan
Associate Editors
Nazlida Muhamad, Universiti Brunei Darussalam
Md Hasnol Alwee Md Salleh, Universiti Brunei Darussalam
Thuraya Farhana Haji Said, Universiti Brunei Darussalam

Editorial Board
Euston Quah, Nanyang Technology University, Singapore
Charles Horioka, Kobe Uniersity, Japan
Adrian Wilkinson, Griffith University, Australia
Guler Aras, Yildiz Technical University, Turkey
Arthur H. Goldsmith, Washington Lee University, USA
Mehmet Huseyin Bilgin, Istanbul Medeniyet University, Turkey
Toseef Azid, Qassim University, Saudi Arabia
Saleem Ali, University of Delaware, USA
Abdullah Al-mudimigh, Dar Al Uloom University, Saudi Arabia

International Advisory Board
Steve Gold, Babson Executive & Enterprise Education College, USA
Mark Rhodes, Hull University Business School, UK
Trevor Hopper, University of Sussex, UK

Advisory Board of Practitioners
Shazali Sulaiman, Brunei Darussalam ICCI, Brunei Darussalam
Yong Chee Tuan, Yi Ecomodern Solutions, Brunei Darussalam
Osman bin Hj Jair, Insurans Islam TAIB, Brunei Darussalam
Mubashar Khokhar, Bank Islam Brunei Darussalam, Brunei Darussalam
Nur Rahman, Ghanim International Corporation, Brunei Darussalam
Published in Brunei Darussalam by
Universiti Brunei Darussalam
School of Business & Economics (UBDSBE)
Jln Tungku Link Gadong
Bandar Seri Begawan, BE1410
Brunei Darussalam

Copyright © 2020 by UBDSBE. All rights are reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, or otherwise, without prior permission of UBDSBE.

                   Please visit the Journal’s Web at http://www.jbea-sbe.org
                                  Email: jbea.sbe@ubd.edu.bn
JOURNAL BUSINESS & ECONOMIC ANALYSIS

                        VOLUME 3 NUMBER 1 (2020)

                                   CONTENTS

Message from the Guest Editor………….…………………………………………………1

Proactive Personality, Human Resource Management Practices, and Job Performance:
A Case of Banking Sector Employees in Malaysia.………………………………….….. 5
       Johanim Johari, and Hema Subramaniam

Work Values and Emotional Intelligence Determinants of Career Commitment among
Generation Y in the Indonesian Banking Industry.………………………….………… 30
      Nur Damayanti, Khulida Kirana Yahya, and Tan Fee Yean

The Determinants of Turnover Intention among Bank Employees………………….. 42
      Yeo Chiu Hoon, Hadziroh Ibrahim, and Tang Swee Mei

An Investigation on Extrinsic and Intrinsic Rewards on Employee Retention among
Gen Y: A Study in Malaysian Manufacturing Companies……………….................... 55
    Zuraida Hassan, and Chandrakalaa Govindhasamy

Boosting Learning Goal Orientation through Work Engagement: From the Lens of
Malaysian Academics………...……….………………………………………………….. 70
      Tan Fee Yean, Johanim Johari, and Khulida Kirana Yahya

Factors That Influence Mental Illness Among Students in Public Universities…........ 77
       Nathera Kandasamy, Indraah Kolandaisamy, Nur Aisyah Tukiman, Fursan
       Wajdi Kusairi Khalil Kusairi, Sofea Iman Amir Sjarif, and Mohammad
       Syaffi Syazani Shahrul Nizar
MESSAGE FROM THE GUEST EDITOR

       Human resources (HR) play a key role in an organisation, even determining
the organisation’s success, survival, and progress. Therefore, HR is one of the most
valuable components of any firm, which is why investment in HR is an imperative
action to ensure continuous prosperity in a dynamic environment. However, the field
of human resource management (HRM) has changed dramatically in the 21st century
owing to globalisation and the 4th industrial revolution (IR 4.0). These changes have
made the task of managing HR more uncertain and unpredictable by requiring
organisations to not only act locally, but also think globally beyond physical
boundaries. In such new environments, HRM is now more vital and critical to the
success of an organisation, while HR functions are becoming crucial and inseparable
components of the organisation. Having been accepted as a mechanism that leads to
success, HR functions such as recruitment and selection, training and development,
performance evaluation, compensation, occupational safety and health, and industrial
relations should be viewed from a holistic perspective instead of being considered
mere additions to conventional functional and strategic perspectives. Consequently,
the management of HR should be understood through this new viewpoint and should
adopt new approaches that differ from traditional HRM. Organisations are thus
required to embrace new strategies in managing its diverse people with varying
interests, needs, expectations, and demands. In view of this, the present special issue
wishes to make empirical contributions in this field that enable an organisation to
configure its resource base so that it can substantially contribute by matching the
heterogeneous demands of different dynamic environments. In this special issue,
readers will learn about the nexus between HR practices and the achievement of
organisational objectives through a number of issues that are foremost for the practice
of people management.

       The paper by Hassan and Govindhasamy highlights the issue of high turnover
in the Malaysian manufacturing industry, specifically among Generation Y (Gen Y)
individuals. Gen Y is a workforce group that is known for its unique characteristics of
disloyalty and high demand for remuneration. Recognising Gen Y as the core
contributors of organisational profits, the authors’ work aimed to discover how
extrinsic and intrinsic rewards affect Gen Y employees’ retention. Their results
supported the established view that both extrinsic and intrinsic rewards are associated
with Gen Ys’ retention. Particularly, these two rewards strongly explained the
variance of retention with a high R-square value of 71.5 percent. This work highlights
potential strategies for managers’ in designing compensation packages tailored to Gen
Y individuals’ needs. Through an enriched compensation package that caters to this
cohort’s demands, employers would demonstrate that they value their workforce,
which is now critical to attract and retain talent in an organisation.
                                                                                     1
Drawing on the fact that university students are great assets for organisations
upon their graduation, the paper by Kandasamy and his colleagues built on previous
literature which reported that financial, health, and social factors are likely to trigger
mental health problems among university students. Financial difficulties, poor health
conditions, and deprivation of social interaction with peers and teachers form
collective impacts on what students mentally feel and psychologically experience. The
authors’ empirical analysis provided support for these arguments. They conjectured
that understanding the factors that induce students’ mental illness aids universities’
management in acting proactively to eliminate potential factors that affect students’
well-being. Additionally, the authors aspired for the outcomes of this study to benefit
students by enlightening them on why and how they suffer mental illness and
subsequently enabling them to manage their mental health effectively. This work is
not only valuable to universities and students, but also to employers who hire fresh
university graduates as they can take precautionary mechanisms to prevent mental
illness from exacerbating in the future.

       The perceived role of HR practices is at the heart of Johari and Subramaniam’s
analysis. Based on the social exchange theory and the self-determination theory, their
study explains how organisational (HR practices) and personal (proactive personality)
factors affect employee job performance in Malaysian commercial banks. The
empirical results demonstrated that the perception of HR practices, particularly
compensation and benefits, enhances employees’ job performance in commercial
banks. Moreover, employees who are proactive are more likely to perform better than
those who are not proactive. The paper highlights that to elevate employees’ job
performance in commercial banks, compensation and benefits is the main HR practice
that should be given thoughtful consideration. Employees will only exhibit high levels
of job performance if their work has been appropriately compensated by their
employers. Based on the results, the authors further proposed that a proactive
personality should be included as one of the dispositions to be assessed in the hiring
process.

        The paper by Yean, Johari, and Yahya addresses the relationship between work
engagement and an under examined construct in empirical research – learning goal
orientation. The authors’ proposition was tested among academics in Malaysian
public universities as academics are one of the key resources that influence a
university’s sustainability in dynamic environments. Using regression analysis, a
direct link was established between work engagement and learning goal orientation
with the support of the Broaden-and-Build Theory of Positive Emotions. This result
confirms that individuals’ motivation to learn in most instances is stimulated by their
positive attitudes such as vigour and enthusiasm. Even though only a single construct
was employed to predict academics’ learning behaviour, the study, to some extent,

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provides a foundation for understanding the role of work engagement in boosting
academics’ interest to enrich their knowledge capital via continuous learning.

        The research of Damayanti, Yahya, and Yean focused on employee
commitment in the banking sector. Contrary to previous works, the study was a
preliminary test carried out in one Indonesian bank prior to large-scale quantitative
data collection throughout the Indonesian banking industry. The authors’ work was
inspired by the pertinent problems reported in extant literature surrounding
organisations’ struggle to secure commitment from Gen Y employees. They argued
that Gen Y are frequent career switchers who are likely to change career paths
repeatedly if they have better options that fulfill their personal needs and wants,
thereby causing low retention rates in organisations. The authors believe that by
clarifying the determinants of Gen Ys’ low career commitment, the study’s outcomes
aid organisational talent retention initiatives. With emotional intelligence and work
values as predictors, the results revealed that Gen Ys’ career commitment is largely
influenced by their personal work values. Accordingly, paying detailed consideration
to work policies that prioritise work-life balance and diverse advancement
opportunities for Gen Ys might be a practical way to motivate them towards higher
career commitment.

       The final contribution to this special issue highlights the issue of employee
turnover in the Malaysian banking industry. Specifically, the paper by Yeo, Ibrahim,
and Tang examined how employee turnover intention is influenced by working
conditions and three dimensions of human resource practices (employee relations,
compensation and benefits, and career advancement opportunities). The regression
analysis revealed that out of the four independent variables, only working conditions,
and compensation and benefits affect employees’ turnover intention. The paper
concluded that the willingness of an employee to stay with his/her current employer
is largely dictated by working conditions (e.g. conducive workstation free from
unhealthy features) and fair compensation and benefit packages. Employers should
understand that when employees come to work, they do not only desire recognition
and financial rewards but also a safe and healthy work environment. Hence,
improving working conditions for employees in general could lead to lower turnover
intention, which is in line with the social exchange theory.

       The six papers discussed above underscore the critical areas that today’s
organisations should consider when designing effective and efficient best practices in
human resource management. The papers in this special issue examined various
occupational contexts, including manufacturing, banking, and education, thus
granting applicable knowledge to HR professionals across industries. The papers’
findings further encourage HR managers to be more sensitive and more keenly aware
of the different HR strategies that should be designed to meet the needs of

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organisations in different industries, especially in a dynamic business environment.
Practically, this special issue emphasizes evidence-based HRM by providing empirical
results on the application of HRM knowledge to enhance organisational effectiveness
and achieve desired objectives. HR professionals nowadays need to think out-of-the
box and be aware of both current and emerging issues due to the dynamic nature of
the HRM field. Hence, the empirical findings presented offer benefits to readers by
developing their understanding of what, why, and how to anticipate future HR needs.
In turn, such understanding allows professionals to embark on the right solutions
capable of bridging the gap between HR performance and organisational strategic
goals.

       In conclusion, understanding the multifaceted aspects of HRM across diverse
occupational contexts assists in better recognising and predicting HRM-related
antecedents, outcomes, and interventions at multiple levels. HR scholars and
practitioners are welcome to advance the authors’ work and contribute further in this
interesting research field.

                                                                       Tan Fee Yean

                              School of Business Management, Universiti Utara Malaysia

                                                                                    4
Proactive Personality, Human Resource Management
Practices, and Job Performance: A Case of Banking Sector
Employees in Malaysia
Johanim Johari (*) 1, Hema Subramaniam 2

                                   ABSTRACT
                                   The study aims to examine the influence of human resource
    Journal of Business &          management (HRM) practices and proactive personality on job
    Economic Analysis              performance. HRM practices comprised of compensation and
    (JBEA)
                                   benefits, training and development, and performance appraisal and
                                   achievement. Employees who participated in the study are employees
                                   of commercial banks located in Klang Valley. The results reported
    Vol. 3, No. 1 (2020)           that compensation and benefits and proactive personality have a
                                   significant and positive influence on job performance. Discussions
                                   delineated on the predicting role of compensation and benefits and
                                   proactive personality in boosting job performance among employees
    KEYWORDS
                                   in the study. Theoretical implications in terms of Social Exchange
                                   Theory and Self-Determination Theory are highlighted while
    • Human resource               practical implications are also brought to fore. Finally, limitations,
      management practices         directions for future research, and conclusion are also presented.
    • Proactive personality
    • Job performance
    • Banking sector
    • Malaysia

    Received 13 Jun 2019
    Revised 29 Jun 2020
    Accepted 08 Jul 2020

    CITATION INFORMATION

    Johari, J. and Subramaniam, H. (2020). Proactive Personality, Human Resource Management
    Practices, and Job Performance: A Case of Banking Sector Employees in Malaysia. Journal of Business
    and Economic Analysis, 3(1), 5-29. DOI: https://doi.org/10.36924/sbe.2020.3101

1 School of Business Management, Universiti Utara Malaysia, johanim@uum.edu.my
[*Corresponding author]
2 United Nations High Commission for Refugees, Malaysia.

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1. Introduction
At present, the business environment is rapidly evolving due to the forces of economic
turbulence and uncertainties. To help overcome the dynamic forces in the external
environment, organizations must secure their resources. One of the most important
resources is employees, who are the focal feature of an organization as they are the
main pillar for organizational development and overall performance. Hence,
employees’ job performance is one of the most important factors for an organization
to achieve its competitive advantage and optimize its productivity. Cropanzano and
Mitchell (2005) asserted that employees’ level of satisfaction is reflected through their
productivity and performance. Therefore, if employers fail to fulfill the needs of
employees, the motivation and satisfaction level would be affected, and this would
inevitably attenuate employees’ job performance and organizational performance at
large (Qureshi, 2015).

The aspect of performance is undeniably crucial in every organization regardless of
the type of industry. The services sector is recognized as the sector that largely
contributes to the economic growth of Malaysia. The service sector in the country is
aggressively expanding and is strongly supporting the economy growth of the nation
by sustaining 6 percent of the Gross Domestic Product growth in the second quarter
of 2014 (The Star, August 18, 2014). In 2018, the serviced sector is expected to grow at
6.8% per annum and contribute 56.5% to the GDP in 2020 and to provide 9.3 million
jobs (Malaysian Investment Development Authority, 2018). In the context of the
services industry, banking sector is one of the key contributors in the economy of
Malaysia. Therefore, banks across the nation are operating with more complex
demands due to the changes in the global economy. The demand has caused massive
expansion in the banking sector, particularly commercial banks. Due to these dynamic
forces, there are several challenges faced by banking sector employees. According to
Rizwan et al. (2014), workload among the bank employees have increased due to
globalization and hyper competition among banks. This poses pressures on the
employees to perform multiple tasks in order to be more competitive in the banking
field. For instance, the job scope of the employees in banking sector have becoming
more challenging in fulfilling customer’s needs and demands. The dynamic
phenomenon faced by employees in the sector has brought about various issues,
which are normally resolved with the help of its union. Main concerns highlighted by
members of this union, among others, are salary increment, job security, and
conducive work environment (National Union of Bank Employees, 2015). In fact, one
of the issues that may influence job performance among banking sector employees is
attributed to the practices in banks, particularly in terms of human resource
management practices.

In November 2013, a total of 300 bank employees along with National Union of Bank
Employees (NUBE) participated in the picket held in front of Wisma Hong Leong,
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Kuala Lumpur. The picket aimed to oppose the decision made by top management
with regards to human resource practices, especially in terms of compensation and
benefits and training. It was claimed that the awareness on the importance of training
is lacking among the bank managers as they are more concerned about cost reduction.
Such understanding among the management has deteriorated employees’ job
performance because they are not given ample opportunities to enhance work-related
knowledge, skills, and abilities through training and development programs (Kum,
Cowden & Karodia 2014; Elnaga & Imran 2013). Furthermore, Saeed et al. (2013)
reported that employees will not do much work or put effort to improve their
performance if there is no proper performance management practice in the
organization. In essence, there will be less intention among employees to engage in
high performance behavior if their performance is not managed effectively. In 2017,
NUBE highlighted on the importance of the top management to include banking
sector employees and their union in decisions with regards to merger and acquisition
exercises taking place in financial institutions across the country. Poor execution of
strategies and practices in terms of employee relations has severely deteriorated the
morale and performance of employees in the banking sector.

According to Williams (2002), Campbell’s Determinants of Job Performance Model
(Campbell, 1990), which has been further refined by Cardy and Dobbins (1991) and
Waldman & Spangler (1989), incorporates two elements, namely system factors and
person factors, as the predictors of performance. System factors refer to the
environment and practices of the organization, such as human resource practices,
leadership, and organizational culture that may influence employees’ job
performance. Person factors are identified as the capabilities and personalities of
employees to influence their job performance (Williams, 2002). Based on the
Determinants of Job Performance Model, system factors and person factors contribute
equally to the achievement of high job performance.

In relation to the context of this study, Qureshi (2015) asserted that job performance
of banking employees will directly affect the overall performance of the banking
industry. Therefore, to enhance the understanding of job performance and its
predictors, this research focuses on the influence of system factors, which are
compensation and benefits, training and development, and performance appraisal
and achievement. These dimensions of human resource management practices were
reported to be crucial, especially in determining behavioral outcomes among
employees (Uen & Chien 2004; Minbaeva 2008). It is worthy to note that human
resource management practices solely cannot influence employee job performance. In
fact, factors related to individuals also play a major role in predicting their job
performance. In light of this, proactive personality, which is the self-initiative that an
employee takes to perform a task more effectively (Gan & Cheung 2010; Li, Liang, &
Crant 2010), is incorporated as another predicting factor.

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In this study, job performance espouses task performance and organizational
citizenship behavior. The former refers to the basic knowledge, skills, and abilities
required for an employee to perform their main duties, while organizational
citizenship behavior refers to behaviors in terms of employees’ effort to support the
organizational success. According to Motowidlo (2000), the holistic measure of job
performance should incorporate task performance and organizational citizenship
behavior because it combines the abilities of employees to perform the duties stated
in the job descriptions and to get involved in activities beyond what is stated in the
job description. Edwards, Bell, Arthur and Decuir (2008) pointed out that if employees
are satisfied with the practices adopted by their respective employer, they will
perform well to accomplish the tasks given and are willing to exert extra effort in
fulfilling the organizational mission and vision.

Based on the Social Exchange Theory, any relationship or situation requires exchange,
even in the most basic form. In organizations, positive exchanges are originated from
practices in organizations and employees will reciprocate by engaging in positive
behaviour (Cropanzano & Mitchell 2005). For instance, Qureshi (2015) asserted that if
an employee is satisfied with the human resource practices, the level of performance
will elevate, which ultimately affects the organizational performance in a positive
manner. On the contrary, regardless of the perception that employees may have
towards human resource practices in their organizations, there are some employees
who are self-motivated. This type of employees are proactively involved in
performing tasks and they continuously improve themselves from time to time.
According to the Self-Determination Theory, proactive employees’ proficiencies
would have a better sense of self-determination because they are in charge of the
situation (Parker, Bindl & Strauss 2010). Based on Self-Determination Theory,
proactive employees can perform better because their behaviour focuses on
motivating and developing themselves (Lam & Gurland 2008). In essence, employees
with proactive personalities will intrinsically motivate themselves and will focus on
self-improvisation to upgrade their performance without giving much heed to the
extraneous factors. This is because they believe that the main factors that can impede
their performance are due to lack of self-initiative and self-determination (Lam &
Gurland 2008). Drawing on this perspective, the present study attempts to validate
the influence of human resource management practices and proactive personality on
job performance. It is crucial to understand how human resource management
practices may influence the job performance of employees and how a certain attribute
that employees have, in this case proactive personality, may impact their job
performance. Most importantly, the result of this study will add to the growing body
of knowledge in the domain of variables understudy as well as Self-Determination
Theory and Social Exchange Theory.

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2.    Literature Review
This section commences with the conceptual background of job performance. This is
followed by the conceptual foundation of human resource management practices and
dimensions under this construct. This section then presents the hypotheses
development in this study. Finally, the framework of the research is presented.

2.1   Conceptual background of job performance
Job performance is one of the most significant elements in the industrial and
organizational psychology research (Borman 2004a). This is due to employees’ job
performance being the main indicator that establishes an organization’s performance
(Preko & Adjetey 2013). Ameeq and Hanif (2013) argued that job performance among
employees are very dynamic in nature because performance deals with employee
behavior. Campbell, McHenry and Wise (1990), on the other hand, conceptualized
performance as visible activities of employees, which are related to the organization’s
goals. Motowidlo, Borman and Schmit (1997) pointed out that job performance
comprised of two dimensions namely, task performance and organizational
citizenship behavior. Task performance refers to the technical characteristics of
performance such as knowledge, skills, abilities and other basic characteristics that are
needed to perform the job. In contrast, organizational citizenship behavior is what
goes beyond the task performance, which is not directly related to the job of a person
(Borman 2004a). Organizational citizenship behavior or contextual performance,
includes employees’ willingness to exert extra effort to accomplish tasks, perform
tasks with less supervision, and help and assist other employees voluntarily. Hence,
organizational citizenship behavior is equally important as these behaviors support
organizations in achieving their goals (Borman 2004b).

Various factors have been examined in relation to job performance. Based on
Determinants of Job Performance Model by Campbell (1990), job performance is
attributed to both system factors and person factors. This suggests that job
performance is not determined solely by the system factors (e.g. human resource
management practices, job characteristics, organizational structure, organizational
climate and culture, etc.). In fact, the person-related aspects also contribute to
employees’ job performance because an individual employee may have the relevant
knowledge, skills, and abilities that suitable for a certain job. Drawing on this
perspective, this study incorporates both factors i.e. human resource management
practices as well as proactive personality as independent variables in gauging
employees’ job performance.

2.2 Conceptual foundation of human resource management practices
Human resource management practices play a significant strategic role for
organizations in developing and sustaining the competitive advantage in achieving
organization’s goals (Jeet & Sayeeduzzafar 2014). The importance of human resource
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JBEA | Vol. 3, No. 1 (2020)          Proactive Personality, HRM Practices & Job Performance

management practices in determining employees’ performance is evident in the
literature (Guest 2002). Quresh et al. (2010) pointed out that human resource
management practices are adopted by organizations to manage the human resources
in order to achieve organizational goals and objectives. Abdullah, Ahsan and Alam
(2009) defined human resource management practices as the activities involved in
managing human capital in an organization. These practices are directly connected to
the managerial functions such as staffing, remuneration and rewards, talent
development etc. in organizations (Dessler, 2010).

Three dimensions of human resource management practices have become the focus of
the study, namely compensation and benefits, training and development, and
performance appraisal and achievement. According to Uen and Chien (2004) and
Minbaeva (2008), these HR functions have a direct linkage to various desirable
workplace outcomes among employees, including job performance. This is because
each function provides a unique contribution in elevating job performance.
Specifically, compensation and benefits does not only impact employees’ job
performances, but it can also be an integral tool in motivating individuals to work
harder in achieving career development and success. In fulfilling the developmental
purpose of employees through performance appraisal, employees can determine their
strengths and weaknesses during the performance review process. Through this,
employees could take appropriate measures to improve their competencies at work,
which ultimately enhances their job performance. In parallel fashion, training and
development function is the most crucial platform for employees to develop their
knowledge, skills, and abilities in assuming greater responsibilities, which may also
be the requirement for future career prospects. Hence, human resource management
practices, in terms of compensation and benefits, training and development, and
performance appraisal and achievement are of utmost importance in determining job
performance.

2.2.1 Compensation and benefits
This is one of the human resource management dimensions that is designed to attract,
motivate, and retain employees. It is viewed as the most important function that
motivates employees to produce excellent performance and to retain talented and
experienced employees (Chiu, Luk & Tang 2002; Johari, Yean, Adnan, Yahya &
Ahmad, 2012). Compensation is defined as the monetary and non-monetary rewards
that employees receive from employers in exchange of their services, which will be
determined based on their efforts, contributions, and performance (Milkovich,
Newman, & Gerhart 2010). Generally, compensation and benefits are inclusive of
salary, short-term and long-term incentives, bonuses, allowances, commission, profit
sharing, medical benefits, health insurance, disability insurance, retirement benefits,
and tuition reimbursement (Mello 2014). Mehta (2014) categorized compensation and
benefits into two, which are extrinsic and intrinsic rewards. Extrinsic rewards are

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JBEA | Vol. 3, No. 1 (2020)         Proactive Personality, HRM Practices & Job Performance

defined as tangible rewards inclusive of monetary returns while intrinsic rewards are
defined as psychological rewards that are inclusive of appreciation and recognition.

2.2.2 Training and development
This aspect of human resource management practices are the formal activities
conducted by employers to ensure that employees acquire the relevant knowledge
and skills required to perform current or future jobs (Mondy 2011). Dermol and Cater
(2013) described training and development as a learning process that assists
employees to learn and develop their skills and talents besides achieving progressive
improvement in their job performance. This is because training and development is
the key to unlock employees’ potential by enlarging their knowledge and skills to
close any possible performance gaps. Furthermore, training and development are the
avenues organized and provided by the organizations for employees to acquire
knowledge and skills required for the current and future jobs (Bhat 2014). Generally,
training and development activities are designed to help employees continue to make
positive contributions by utilizing new knowledge, skills, and abilities.

2.2.3 Performance appraisal and achievement
This is another important feature of human resource management practice.
Performance appraisal is identified as a very significant tool for any organization to
evaluate their employees’ performance in terms of their competencies and capabilities
to execute tasks and responsibilities required of their respective employer.
Performance appraisal is a systematic process to review and evaluate employee
performance for the purposes of improvisation, rewarding, and acknowledging them,
accordingly (Gibbons & Kleiner 1994; Purohit 2014; Showkat 2014). According to
Samad (2011), the purpose of performance appraisal are, among others, is to improve
the utilization of human resources in the organization, to make decisions on
administrative aspects such as rewards and training, and to enhance job performance
of employees. Akinyele (2010) stated that effective performance appraisal system
ensures continuous improvement in employee performance.

2.3 Conceptual background of proactive personality
Proactive personality has become an important personality attribute in predicting
various outcomes among employees (Gan & Cheung 2010). According to Campbell
(2000), proactive personality always has positive outcomes on employee performance
and organizational performance. Li, Liang and Crant (2010) identified proactive
personality as self-initiative that employees embrace in developing positive and
satisfied work environment. Furthermore, Crant (2000) stated that a proactive
personality is also an important determinant of the success for an organization as
employees tend to perform with minimum supervision. Employees with proactive
personalities tend to seek more opportunities to improve their job performance.
Bakker, Tims, and Derks (2012) asserted that proactive employees easily adapt and

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shape their environment to produce high quality work. This is empirically proven by
Crant (2000), who reported that employees with proactive personalities establish
better team effectiveness, career outcomes, and job performance due to positive
energy and attitudes that employees have in their effort to continuously improve
themselves.

2.4     Underlying theories
2.4.1 Social exchange theory (SET)
According to Cropanzano and Mitchell (2005), Social Exchange Theory (SET) is the
most prominent theoretical paradigm to explicate and understand behaviours,
particularly in the context of work. Specifically, Social Exchange Theory refers to the
reciprocity that exists between employer and employee. Wikhamn and Hall (2012)
asserted that reciprocity is the norm that is used to describe the actual motivation
behind employees’ behaviour and the reciprocity is considered as a universally
accepted principle. One common example given is when employees receive good
treatment at work and are satisfied with practices adopted in the organization, they
will reciprocate by engaging in positive behaviour and attitude, which ensures the
success for the organization (Cropanzano & Mitchell 2005). Another element pointed
out by Cropanzano and Mitchell (2005) in Social Exchange Theory is the costs and
benefits calculation, which leads to one’s decision-making. This involves maximizing
the benefits that can be achieved, particularly in meeting the basic needs of employees.
In other words, Social Exchange Theory examines the process of exchange between
parties, to come to an agreement on their negotiation and understanding. In relation
to human resource practices and job performance, competitive compensation and
benefits, effective performance appraisal and achievement, and adequate training and
development opportunities offered by employers may drive employees to perform
better at work. This postulation is most appropriate to be underpinned by the concept
proposed in the Social Exchange Theory (Cropanzano & Mitchell 2005).

2.4.2    Self-determination theory
This is a motivation theory, which is widely used in understanding factors related to
various outcomes among employees at work. This concept has received considerable
attention in the literature because it is a prerequisite to employee satisfaction,
engagement, performance, and various other outcomes. Ryan, Patrick, Deci and
Williams (2008) stated that motivation can be divided into intrinsic and extrinsic
factors. Extrinsic factors that motivate employees include rewards, acknowledgement,
and appreciation that they receive from the organization. Meanwhile, intrinsic
motivation refers to the form of motivation that comes from within, that may enhance
creativity, sustain passion and efforts among employees, which ultimately leads to
excellent performance. In other words, Self-Determination Theory focuses on self-
motivation within employees that is needed in nurture behaviors that are in line with
the organizational mission and vision (Ryan, Patrick, Deci & Williams 2008). It is
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worthy to note that Self-Determination Theory is associated with human motivation
and personality. According to Lam and Gurland (2008), Self-Determination Theory is
a very important theory in understanding employees and outcomes e.g. job
performance and engagement, that they may have produced at work. In essence, self-
determination motivates employees to seek improvement opportunities in enhancing
their existing knowledge, skills and abilities, which is strongly related to higher job
performance level (Lam & Gurland 2008).

2.5   Hypotheses development

2.5.1 Compensation and benefits and job performance
This study theorizes that compensation and benefits have a significant and positive
influence on job performance, which is in line with empirical evidences documented
in the literature (e.g. Hameed, Ramzan, Zubair, Ali, & Arslan 2014; Aktar, Sachu & Ali
2012; Gohari, Kamkar, Hosseinipour & Zohoori 2013; Abdullah & Wan, 2013; Wasiu
& Adebajo 2014; Mehta 2014). Aktar, Sachu and Ali (2012) asserted that reward plays
a major role to motivate employees to perform their task at their best. This is because
employees tend to put maximum efforts if they perceive that their employers
acknowledge and reward their contribution accordingly. Likewise, Hameed et al.
(2014) revealed that effective remuneration and reward systems elevate employees’
performance as their level of pay satisfaction has also increased. Most importantly,
Mehmood et al. (2013) emphasized that fairness in compensation and benefits package
is crucial to enhance desirable outcomes among employees, particularly in terms of
performance. Drawing on these empirical evidences, it is postulated that:

H1: Compensation and benefits have a positive and significant influence on job performance.

2.5.2 Training and development and job performance
This study postulates that training and development have a positive influence on job
performance. Abundance of empirical studies, such as Onyango (2014), Tahir et al.
(2014), Javaid, Ahmad and Iqbal (2014), Kum, Cowden and Karodia (2014), Ameeq
and Hanif (2013), Elnaga and Imran (2013), Sultana, Irum, Ahmed and Mehmood
(2012), Farooq and Khan (2011), and Noor and Dola (2011). Generally, well-trained
employees are able to work under minimum supervision and instructions. In most
instances, they are able to make better decisions and are capable of solving problems
effectively given the vast knowledge that they have acquired through training. Bhat
(2014) concurred that training and development would boost employees’ self-
confidence and job performance. Based on these assertions, it is evident that training
and development plays a very important role in upgrading employees’ performance
because the performance gap has been reduced. As such, this study hypothesizes that:

H2: Training and development have a significant and positive influence on job performance.

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2.5.3 Performance appraisal and achievement and job performance
Empirical support on the significant linkage between performance appraisal and job
performance is evident in previous studies such as Akinbowale, Lourens and Jinabhai
(2013), Daoanis (2012), Mir and Ahmed (2014), Purohit (2014), Ojokuku (2013), and
Iqbal, Ahmad, Haider, Batool and ul-ain (2013). In parallel fashion, Saeed et al. (2013)
revealed that satisfaction with performance appraisal system will yield higher level of
motivation, which ultimately enhances job performance. Empirical findings by Mir
and Ahmed (2014) supported the same notion and they strongly believe that the
finding is attributed to the fact that decisions related to promotion, incentives,
recognition as well as training and development opportunities hinge on the result of
performance appraisal. This explains the significant link between performance
appraisals and job performance. On the contrary, Purohit (2014) reported that
perceived ineffective performance appraisal system is strongly associated to
undesirable outcomes, including lower job performance. Drawing on these empirical
findings, it is posited that:

H3: Performance appraisal and achievement have a significant and positive influence on job
performance.

2.5.4 Proactive personality and job performance
According to Campbell (2000), employees with proactive personality will seek
prospects and take initiatives to contribute towards the organizational success. This is
normally illustrated in their level of enthusiasm and flexibility in engaging in
organizational citizenship behavior. This is evident in a study by Rodrigues and
Rebelo (2013) in a software engineering company involving 243 engineers. It was
found that proactive personality significantly predicts job performance among the
respondents because employees with proactive personalities will adjust well to the
environment in which they are operating in order to meet the performance standards
stipulated. Efforts exerted in an attempt to meet the performance standards among
employees who are proactive would eventually elicit higher level of job performance
among employees.

This study postulates that a proactive personality has a positive influence on job
performance. According to Bakker, Tims, and Derks (2012), employees with proactive
personalities adopted practical approaches by taking initiatives on improving their
performance at work. This notion is further supported by empirical evidences, such
as Baba, Touigny, Wang and Liu (2009), Bakker, Tims, and Derks (2012), Gan and
Cheung (2010), Li, Liang and Crant (2010), Rodrigues and Rebelo (2013), and Yean,
Yahya, Othman and Pangil (2013). As such, this study hypothesizes that:

H4: Proactive personality have a significant and positive influence on job performance.

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2.6 Research framework
Drawing on the empirical findings explained in the preceding section and
postulations in the underlying theories i.e. Social Exchange Theory and Self-
Determination Theory, this study posits that human resource practices as well as
proactive personality exert a significant and positive impact on job performance.
Figure 1 depicts the framework of the study.

                                Figure 1. Framework of the Study

                 Human Resource Practices

                • Compensation and Benefits
                • Training and Development
                • Performance Appraisal and
                  Achievement                                      Job Performance

                        Proactive Personality

3.    Methodology
3.1   Sample and measures
The unit of analysis for this study is individuals and the target population consist of
commercial bank employees. According to the report of Association of Banks in
Malaysia (2014), the total number of commercial banks in Kuala Lumpur by end of
June 2014 was 322 and the number had increased to 325 commercial banks by the end
of December 2014. The total number of commercial banks in Kuala Lumpur is
inclusive of headquarters and branches.

The study focuses on employees in the commercial banks, which are the key players
in the Malaysian banking industry. This is because these banks are the largest group
in Malaysia, and they provide a full range of banking services (Rahim, 2015). Bank
Negara Malaysia has projected that the banking sector’s contribution to the nation’s
gross domestic product (GDP) will grow by three times in the year 2020. Hence, the
performance of employees in the commercial banks are of utmost importance to
spearhead the banking sector’s growth and to enhance the efficiency performance.

The unit of analysis for this study were the commercial bank employees in Klang
Valley, Malaysia. In the first stage of data collection, an official letter asking for
permission to conduct a survey was sent to the Human Resource Departments of the
respective commercial banks in the aforementioned area. Only four commercial banks
responded and indicated their willingness to participate in the survey. Even though
the officers’ in-charge from the human resource department of the commercial banks
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were unable to disclose the number of employees in each of the bank, they had
specified the number of questionnaires that they were willing to distribute to the
employees. As illustrated in Table 1, 170 questionnaires were distributed, while 128
of those questionnaires were returned, which constitutes 75.3 percent response rate.

Table 1. Total number of questionnaires distributed and returned
            Bank                 Number of questionnaires         Number of questionnaires
                                      distributed                        returned
           Bank A                           30                               20
           Bank B                           40                               28
           Bank C                           50                               42
           Bank D                           50                               38
            Total                          170                              128

Questionnaires consisted of 53 questions with complete written instructions.
Respondents were requested to fill up the questionnaire using a five-point Likert scale.
The five-point Likert scale ranged from 1 = Strongly disagree, 2 = Disagree, 3 =
Moderate, 4 = Agree and 5= Strongly agree. For the job performance measure, a total
of seven items adopted from Williams and Anderson (1991) were used to assess task
performance and nine items from Smith, Organ, and Near (1983) were used to
examine organizational citizenship behavior (OCB). Sample items for OCB construct
include “I make innovative suggestions to improve my department” and “I volunteer for
things that are not required”. Sample items for task performance measure include “I
fulfill the responsibilities stated in the job description” and “I perform tasks that are expected
from me”. In their study among public servants in Malaysia, Johari and Yahya (2012)
reported internal consistency reliability value of 0.937 for this measure.

Items on human resource practices were adopted from Delery and Doty (1996).
Specifically, six questions were used to evaluate compensation and benefits, five items
were adopted to assess training and development, and nine items were employed to
examine performance appraisal and achievement. Sample items include “The salary I
receive encourages me to perform better”, “I am encouraged to attend training and
development programs that are available for me” and “My immediate supervisor supports and
encourages me by providing regular feedback on my performance”. In their study among
manufacturing employees in Malaysia, Johari et al. (2012) reported internal
consistency reliability values of 0.871 for compensation and benefits dimension, 0.869
for training and development dimension, and 0.856 for performance appraisal and
achievement. Finally, 10 items adapted from Seibert, Crant and Kreimer (1999) were
used to gauge proactive personality. Sample items for this variable are “I am constantly
on the lookout for new ways to improve my life” and “If I believe in an idea, no obstacles will
prevent me from making it happen”. Seibert, Crant and Kreimer (1999) reported the
internal consistency reliability value of 0.860 for the proactive personality scale.

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A pilot test was conducted to pre-test the items and to establish the reliability of each
dimension in the questionnaire. Even though the items were adapted from a well-
established questionnaire, a pilot test is deemed necessary given that different samples
might respond differently. Most importantly, feedback and comments acquired were
useful for further refinement of the items. A total of 30 banking employees
participated in the pilot test. Table 2 illustrates the reliability of each variable.

Table 2. Mean, standard deviation and reliability coefficients results for pilot study
                                  Number of                     Standard      Cronbach’s
           Variables                                 Mean
                                    items                       deviation       alpha
 Task Performance                      7             3.695        2.582          0.388

 Organizational Citizenship            9             3.767        3.781          0.688
 Behavior

 Compensation and Benefits             6             3.111        3.457          0.668

 Training and Development              5             3.353        4.048          0.893

 Performance Appraisal and             9             3.604        4.673          0.794
 Achievement
 Proactive Personality                10             3.893        4.982          0.893

4.    Findings
4.1   Respondent’s demographic profile
The sample comprised of 67.5 percent female and 32.5 percent male respondents.
Majority of respondents or 46.7 percent are in the age group between 31 to 40.
Meanwhile, only 5.8 percent of respondents are in the age range of 51 to 60. A total of
51.7 percent of the respondents were Malay, 24.2 percent were Chinese, while 23.3
percent were Indian. In terms of academic qualifications, 52.5 percent of the
respondents had a bachelor’s degree, 2.5 percent of respondents had a master’s
degree, and 1.7 percent of respondents had doctoral degree. A total of 60 respondents
were executives while another 60 respondents were non-executive staff. In terms of
length of service in banking sector, 30 percent of employees had worked in the
banking sector for more than 10 years, while only 4.2 percent of employees worked in
the sector for less than a year.

4.2 Exploratory factor analysis
Based on the explanatory factor analysis, the items in compensation and benefit
variable split into two components in which four items of compensation and benefits
grouped as one factor, and remained the name as compensation and benefits.
Meanwhile, the two remaining items were grouped and named as internal and
external equity. Items on training and development, and performance appraisal and

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achievement were grouped into one factor which has been labelled as training and
performance management. The items in job performance were also split into two
factors. There were five items of task performance and three items of organizational
citizenship behavior that loaded into factor one. These items had been labelled as job
performance. The remaining items on task performance and organizational
citizenship behavior that loaded in factor two had been omitted due to low loadings
value. Also, one item on proactive personality variable was omitted due to low
loading value. Based on the EFA results, the KMO measure of sampling adequacy was
0.800 for the independent variables whereas the approximate Chi Square was
1811.674. The four variables were accounted for 53.33 percent of total explained
variance. The KMO measure of sampling adequacy was 0.755 for the dependent
variables whereas the approximate Chi Square was 534.668. The dependent variable
was accounted for 43.65 percent of total explained variance.

4.3 Reliability analysis

Based on the explanatory factor analysis, another reliability test was conducted on the
remaining items on independent and dependent variables. The Cronbach’s alpha
value for eight items of job performance, which is the dependent variable of this study,
is 0.744. The Cronbach’s alpha value for compensation and benefits is 0.824, while the
Cronbach’s alpha value for internal and external equity is 0.678. After deleting eight
items from training and performance management, the Cronbach’s alpha value for
this variable is 0.812. Meanwhile, the Cronbach’s alpha value for proactive personality
is 0.843. The Cronbach’s alpha results for each variable are presented in Table 3.

Table 3. Reliability coefficients results
                                                 Number of       Cronbach's Alpha
                  Variables
                                                   Items           Actual Study
 Job Performance                                      8               0.744
 Compensation and Benefits                            4               0.824
 Internal and External Equity                         2               0.678
 Training and Performance Management                  6               0.812
 Proactive Personality                                9               0.843

As presented in Table 4, the mean value for job performance is 4.122. The mean value
for proactive personality is 3.901 followed by training and performance management
is 3.836, compensation and benefits 3.553 and internal and external equity is 2.750.

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Table 4. Descriptive statistics of the variables
                                                                          Standard
                    Variables                             Mean
                                                                          Deviation
 Job Performance                                          4.122             3.477
 Compensation and Benefits                                3.553             2.360
 Internal and External Equity                             2.750             1.690
 Training and Performance Management                      3.836             3.512
 Proactive Personality                                    3.901             4.380

4.4 Multiple regression analysis
Based on the results, the compensation and benefits (β = 0.175, p < 0.05) and proactive
personality (β = 0.601, p < 0.05) were significant and positively associated with job
performance. On the contrary, internal and external equity (β = -0.028, p > 0.05) and
training and performance management (β = 0.070, p > 0.05) were found to not be
associated with job performance. Table 5 presents the results of multiple regression
analysis. Furthermore, all four independent variables significantly and collectively
explained 42.9 percent of the variance in job performance, lending evidence to the
fitness of the model tested.

Table 5. Results of multiple regression analysis
 Dependent Variable (Job           Unstandardized          Standardized
 Performance)                      Coefficients            Coefficient
                                     Beta       Std.          Beta           t        Sig
                                                Error
 (Constant)                          1.524      .331                       4.602      .000

 Compensation and Benefits            .097         .041           .175*    2.345      .021
 Internal and External Equity         -.014        .037           -.028    -.383      .702
 Training and Performance             .052         .056            .070     .936      .351
 Management
 Proactive Personality                 .537        .064           .601*    8.332      .000
 F Value                              21.579
 R2                                    .429
Note: *p
JBEA | Vol. 3, No. 1 (2020)           Proactive Personality, HRM Practices & Job Performance

2013; Wasiu & Adebajo 2014; Mehta 2014). Compensation and benefits play an
important role in motivating the employees. Drawing upon Social Exchange Theory,
compensation and benefits and job performance involves an exchange process. In
essence, employees render their good service in terms of knowledge and skills that
they have while employers reciprocate by giving them competitive salary and benefits
packages. Evidently, both employers and employees in this context are equally
maximizing the benefits they gained from each other.

On the contrary, the findings revealed that there was no significant influence of
internal and external equity on job performance among the commercial bank
employees. Basically, internal and external equity relate to the perceived fairness in
terms of pay among employees within a particular organization or industry. A
plausible reason to this result is attributed to the fact that the pay range of employees
in the banking sector is very much standardized. According to the survey on salary
guide in Malaysia, the salary structure has been standardized for each position in the
banking sector based on academic qualifications and experience in the industry
(Adecco Group, 2015; Kelly Service Malaysia, 2014). Due to this, there is not much of
a gap in salary range within positions or banks or across positions and banks. Hence,
the pay equity aspect posed no bearing on the job performance among the banking
sector employees in this study.

The findings of this study also found no significant influence of training and
performance management on job performance among respondents. The results are
incongruent to previous studies such as the study conducted by Sultana, Irum, Ahmed
and Mehmood (2012) and Ojujuku (2013). It is worthy to note that the majority of
respondents have been working in the banking sector for more than 10 years. In other
words, they have gained vast experience in this sector and therefore have all the
knowledge, skills, and abilities needed to perform their tasks. This plausibly explains
the non-significant impact of training and performance management on their job
performance.

It was also found that there was a significant influence of proactive personality on job
performance among commercial bank employees. This finding is similar to results
reported by Thomas, Whiteman and Viswesvaran (2010) and Bakker, Tims, and Derks
(2012). Evidently, employees who are proactive with high levels of self-initiative are
more likely to be excellent at work compared to their counterparts, who lack such
traits. Fast changing internal and external environments of the banking industry have
resulted in more complex tasks and job activities to be performed by employees.
Hence, it is very important for employees in this industry to be agile and adaptive to
changes in order to stay relevant. Employees are expected to have the ability to
identify opportunities, to determine future changes, to plan ahead in ensuring success,
to adapt new working environment, and to solve problems effectively. In essence,

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