FACTORS AFFECTING EMPLOYEE PERFORMANCE IN THE MANUFACTURING INDUSTRY: A STUDY ON MALAYSIAN SMES

Abstract

The Malaysian economy has grown tremendously from 2016 to 2021, with SMEs accounting to more that 97.4% of overall establishments in Malaysia. The manufacturing sector in Malaysia, which accounts to 5.8% of SMEs, faced with immense pressure to compete and grow their businesses as they overcome the huddles of the COVID-19 pandemic. Employee performance became an important driver for the overall performance of SMEs. As such, based on the literature review, this study aimed primarily to investigate the relationships that may exist between variables such as compensation, work-life balance, job satisfaction, and work discipline on employee performance of SMEs in the manufacturing industry in Malaysia. Another goal of this study was to discuss the implications of the research findings that will benefit policy makers. Data were collected using online questionnaires from 200 respondents ranging from lower-level management to higher-level management in the manufacturing industry. The results of this study found that work-life-balance and work discipline had significant positive relationships with employee performance in the Malaysian SMEs in the manufacturing industry. The scientific novelty of this research is that both compensation and job satisfaction are insignificant. Keywords: Employee Performance, Compensation, Work-Life Balance, Job Satisfaction, Work Discipline DOI： https://doi.org/10.35741/issn.0258-2724.58.1.62