The Banking Industry Of Malaysia Management Essay

Based on the research we conducted, the topic of the research was the antecedents that affect the organizational commitment in the banking industry of Malaysia. Our research is to study the relationship between the antecedents and organizational commitment in the banking industry of Malaysia. It will also explain how different antecedents affect the organizational commitment. The independent variable is the antecedents whereby the dependent variable is the organizational commitment in the banking industry of Malaysia. Go through specifically, for the independent variables we will focus only the three type of antecedent which is gender, job satisfaction and job performance. As the same time, we will also focus on the three types of organizational commitment which is affective commitment, normative commitment and continuance commitment for the dependent variable.

2.1.2 1st Independent variable – Gender

First of all, we believe that male and female they have different perception towards the different objects in their daily life and it is same in the banking industry of Malaysia. So, how the gender will affect the organizational commitment? For example, when the male employees received financial reward such as bonus, allowance, promotion and so forth and they will increase their organizational commitment. But there are differences between male and female. Female are more concern about non-financial reward such as insurance premium, annual leave, health support and so on to increase their organizational commitment. As a result, if the male receive financial reward, they will increase their organizational commitment. But if they received non-financial reward maybe the organizational commitment remain the same or decrease. Same thing apply to the female. The studies that had proved by Allen and Mayer (1990) have showed that male and female have the same level in affective commitment and continuance commitment. But for the normative commitment, female is greater than male. Male employees are more committed than women employees (Knoke, 1988), while other found that there is no significant relationship between genders. (Igbaria & Wormley, 1992; Van Dyne & Ang, 1998).

Based on the Chusmir (1986) said that men who satisfy with their job circumstances, they will increase their organizational commitment. But for the women, favorable job situations may be outweighed by the effects of unfavorable family circumstances. Unsupportive family is the factor that for women employees to decrease their organizational commitment. Chusmir (1986) also mentioned that most of the time women are the victim of being sex-role stereotype and discrimination and that will affect them in the organizational commitment. Hofstede (2001) claims that different gender will play different roles in the masculine society. For example, males are supposed to be assertive, tough, extraverted, and focus on competitiveness and material success. But for women point of view, they are presumed to be modest, tender, introverted, and pay attention to the quality of life. For instances, women in Taiwan they will place more on their family members so that will decrease the organizational commitment. This is researcher’s reason that why that have a significant relationship between gender and organizational commitment. Some of the researcher showed that there is no significant relationship between gender and organizational commitment this is because the different target population.

2.1.3 2nd Independent Variable – Job Performance

In that matter, the better the job performance, the higher the bond of organization commitment amongst the employees physically and mentally with organization.

The job performance of employees in an organization is highly related to the affective, continuance, and normative commitment within the employees towards their commitment. Decotiis & Summers (1987) reported positive correlations between the leadership behaviors of charisma, intellectual stimulation, individualized consideration, and contingent rewards and affective continuance and normative commitment.

Managing Director, Functional Managers, and Human Resource Manager these are namely the few that are in the organization committee of any company or organization. For example the human resource manager has to provide realistic job previews and accurate information to make sure the applicants are better able to determine whether the job is appropriate for them. This will make sure the level of job performance of each employee. The gravity of their strategic human resource management can put a toe on the level of performance of the employees in the organization if not done appropriately and will affect the organization commitment.

In the context of banking industry in Malaysia, Maybank is with no doubt one of the best there is in that industry. Maybank has changed the banking industry into One-Stop-Shops providing a wide range of comprehensive services. With all the services, it comes with promising and capable employees. Their organization commitment plays a big part in securing and maintaining a good relationship with clients. For instance, Maybank’s organization committee ensures that their bankers and employees stay loyal to their organization by making sure they always have their employees well being at heart.

The organization committee has their goals to obtain maximum profits for their shareholders and themselves. However, they acknowledged the importance of organization commitment. That includes certain benefits to hold on to their money makers. Some of the benefits being an employee of Maybank are having lower interest rate for housing loan, 21 days leave entitlement, Unlimited medical coverage, insurance and also various career development courses that one can attend to further develop themselves in that industry. This shows how well their strategic management is to give in order to receive more. Having all these benefits too make secure that the employees in the organization in their commitment and willingness to performance well in their own job scope hence making Maybank one of the best banks in Malaysia.

As a conclusion, the job performance will become the determining point of their organization commitment. The value of strategic human resource management to gain organization commitment is vital to guarantee good job performances among the employees Therefore it is clear that the job performance has a positive effect to the commitment of the employees provided if practiced correctly.

2.1.4 3rd Independent variable – Job Satisfaction

Job satisfaction is important to studies of organizational behaviour. Although job satisfaction and organizational commitment are related, they do not mean the same thing. The relationship between job satisfaction and organizational commitment are differences (Mowday, Steers, and Porter,1979). While organizational commitment can be defined as the emotional responses which an employee has toward his organization; job satisfaction is the response that an employee has towards any job.

The relationship between job satisfaction and organizational commitment are highly correlated (Tai et al.1998).Job satisfaction has been recognized as a component of organizational commitment (Kovach, 1997). While in individualistic culture there is greater probability that the job satisfaction influence organizational commitment greatly (Wong et al., 2001). In the past much of research done by the researcher, they develop the relationship between job satisfaction and organizational commitment that job satisfaction leads to organizational commitment (Yang, 2009 ; Lane at el.,2010 ; Namasivayama and Zhaob, 2007).

The employer will likely hire the employee with the higher level of job satisfaction when job satisfaction can be proven to lead to organizational commitment. This is because the employer can expect the more satisfied individual to stay with the organization. Another reason is that a higher level of job satisfaction may lead to a better family life and a reduction in stress (Bob Delaney, 2002). An employee’s feelings of jobs satisfaction may affect his or her emotions. This feeling will affect the worker’s behaviours inside and outside the organization.

Generally, if an employee is satisfied with supervisor, coworkers, pay policies and future promotion he or she will be committed to their organizations and satisfied with their jobs (reed, Kratchman and Strawser, 1994). As a conclusion, job satisfaction and organizational commitment are positively related, organizations would only need to increase one variable (job satisfaction) to achieve the positive effect of the other (organizational commitment).

2.2 Review of Relevant Theoretical Models

There are a lot of researchers investigated the relationship between the job satisfaction, pay satisfaction, job performance, and demographic factor toward organizational commitment in the banking industry.

2.2.1 Relationship between Job performance and Organizational commitment

According to Emanuel Camilleri(2002), the relationship between the antecedents and organizational commitment in an industry is an important issue since it used to predict the employees’ absenteeism, performance, turnover, and other behaviours. Based on the research, Emanuel Camilleri strong agree that the job performance is closely related to organizational commitment. Employees with better job performance will contribute more to the organization and eventually increase the organizational commitment. When employees have a stronger organizational commitment, they will work harder at their job and perform better than those with week organizational commitment. Ranya Nehmeh(2009) also highlighted that “job performance has been reported to be higher for employees with strong affective commitment”.

2.2.2 Relations between Pay Satisfaction and Organizational commitment.

Muhammad I. Ramay stated that pay satisfaction relates to an employee’s mindset regarding the payment or compensation received for the services rendered. The level of an employee who willing to commit towards an organization are depends on benefit, personal or financial rewards. Based on Ramay research, the pay satisfaction is one of the strong predictors or organizational commitment. When employees perceive, believe, and understand that the pay program intends to provide “internal pay equity”, they tend to have high organizational commitment (Stum, 1999).The average turnover rate of banking industry last year in Malaysia is 12.12% and it is consider high.(Malaysia Employers Federation). Therefore, a high pay satisfaction can prevent the talented worker from leaving this industry. Hence, it will reduce the turnover rate.

Stum, D. L. (1999). Maslow revisited: Building the employee commitment pyramid. Strategy and Leadership,

29(4), 4-9.

2.2.3 Relations between Job Satisfaction and Organizational commitment.

Employees with higher job satisfaction are more likely to commit more to organization because they are always positive in the work place.(Stanley, 2001). Loew Kah Loong also agreed at this point. He stated that high job satisfaction lead to higher productivity and lower turnover. Mathieu and Zajac (1990) found a positive relationship between organizational commitment and lateness as well as organizational commitment and turnover. When the employees are more happy at the work place and this will lead to the commitment toward organizational. According to Ranya Nehmeh(2009), he emphasized that job satisfaction is said to have the largest effect on organizational commitment. Job satisfaction can be increase by provide benefit or rewards to the employee. Tai et al. (1998) also supported that the relationship between job satisfaction and organizational commitment are highly correlated.

Praise, appreciation, and positive feedback from managers and peers for a job well done is imperative to generate job satisfaction and commitment (Park, Erwin & Knapp, 1997; Davies, 2001).

Stanley, T.L. (2001). The Joy of Working: A New Look at Job Satisfaction. Journal of Vocational Behavior, 8 (3), 1320-1335.

Mathieu, J. E. & D. M. Zajac (1990). A Review and Meta-Analysis of the Antecedents, Correlates, and Consequences of Organizational Commitment. Psychologic Bulletin, 108(3), 171-194.

Park, R., Erwin, P. J., & Knapp, K. (1997). Teams in Australia’s automotive industry: Characteristics and future

challenges. International Journal of Human Resource Management, 8, 780-96.

Davies, R. (2001). How to boost staff retention. People Management, 7, 54-6.

2.2.4 Relations between gender and Organizational commitment.

There are many researcher argued whether is there any relationship between gender and organizational commitment. Scholar asserted that gender would predict organizational commitment. (Meyer & Allen, 1997). According to a research, Ngo and Tsnag(1998) claimed that executives’ organizational commitment is not affected by gender difference. However, based on a recent study conducted, Hofstede(2001) suggest that gender should be one of the critical variable significantly related to organizational commitment. There are also evidence that revealed women in masculine societies are more likely to focus and emphasize more on taking care of family life (Hofstede, 2001). After we studied the journal and research conduct by different researchers in different country and place, we realized that the result of each study cannot be compare as each society is different from one and others. For example, comparing the result gained in Africa and America.

Meyer, J.P., & Allen, N.J. (1997). Commitment in the Workplace: Theory, Research, and Application. Thousand

Oaks, CA: Sage Publications.

Ngo, H., & Tsang, A. (1998). Employment practices and organizational commitment: differential effects for men and women. International Journal of Organizational Analysis, 6(3), 251-266.

Hofstede G (2001). Culture’s Consequences. Thousand Oaks, CA: Sage Publications.

2.3 Conceptual Framework

This diagram shows that there are 3 factors that affect the organizational commitment. These 3 factors will be form out as the theoretical framework that shown in below:


Job Performance

Job Satisfaction

Organizational Commitment

Pay Satisfaction

Independent Dependent

Conceptual framework is a group of concepts that define for the integration and interpretation of information. The four factors that affect the organizational commitment which is gender, job performance, job satisfaction and pay satisfaction. Normally the percentage of male to get company promote easily compare to female and the reason was they always think male have high performance and ability than female. It was affect both gender commitment in organizational. For the job performance, human resource management play an important role in the organization in order to ensure among the employees in organizational commit of better job performances. The third factor is job satisfaction. According to Bob Delaney, higher level of job satisfaction may lead to a better family life and a reduction in stress. The author was descript that employee will participate more toward the organization while they does not consist any stressful and satisfied the job that currently have. For the last factors is pay satisfaction. It includes the salary, wages, bonus, or other reward. This payment brought larger effect for the employee performance in company because payment or compensation for them is the services rendered.

2.4 and 2.5

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