Analysis of the State of Workplace Discrimination in Malaysia


Aim: In this study, human resource management concept and its importance was discussed. It is aimed to gain insights on human management issues in Malaysia and provide strategic measure that must been taken to counter the issues. The objective is also to add scanty literature review on human management issue in Malaysia.

Method: This paper based on secondary data collection from reports, previous studies such as journal, books and newspapers. The key issues were constructed as a main frame and been discussed thoroughly with solid arguments and supported evidences from previous findings and reports.

Findings and Conclusion: The key main issues being discussed are education issues, brain drain issues and racial conflict issues. Racial conflict issue is considered as unique issue facing by the country as Malaysia is a multiracial country, having positive discrimination practice and masked discrimination practice from race-type organization. The discussed issues inflicted major damage to development of human capital in Malaysia which in turn hinder progress towards vision 2020. It is hoped that government will and implement effectively discussed strategic measure to ensure competency of human labor in Malaysia.


Business world is becoming more competitive with rapid change over the years; it is more unstable and unpredictable. Human resources of a company is saying to be one of the important asset for the firm and hold such an important role in the operation of an organisation. According to Pfeffer (1994) argued that human capital has long been held to be a critical resource in most firms. This can be done by concentrating on SHRM practices which concern on human resource capital (Sparrow, Schuler, & Jackson, 1994). Companies are now trying to add value with their human resources and human resource (HR) department has been set up in order to manage their human capital, whereas organisation in last decade, managed their human capital through personnel department which is only a small division of the company. The process of managing the human capital is called human resource management (HRM). Human resource is acknowledge as the most vital element in running a business as a firm performance including profitability is heavily dependent on employee performance (Mello, 2005). Human resource is a term used widely in 1900 and then more widely in 1960’s referring to those people working in organization.

HRM is an employment management with emphasis on the importance of employees as a business asset in an organization. There are several definitions on HRM, as an example a process of managing people in an organization with a structured and thorough manner. Another definition, HRM is encompasses the management of people in organization from macro perspectives. HRM also referring to a department that concerned with people administration. Although there is no definite definition on HRM, the concept bring meaning on managing people in organization from entry and onboarding until the employee left the organization voluntary, retirement or through resignation.

In developing countries like Malaysia, retaining and recruiting qualified employee within firm is a must in order for the firm to sustain the growth of a firm. With that, it requires HR to be resilient and adapting new method to meet current needs. According to the Khilji (2002) in the developing economies, to support the growth of a firm, a new paradigm of HR practices is needed in order to attract and retain the knowledge workers as these qualified professional have new perception towards their career. A good HR Department is critical to develop employee-oriented firm, productive workers and employee-friendly workplace. In addition, HR practice enhance firm bottom line with its knowledge on how to deal with employee rights and laws pertaining to industrial relations.

Contemporary business environment brings new challenge to HR managers. Most frequent challenge facing by HRM is globalization, economic and legal environment, workforce diversity, technological development, changes in educational background of employees and employee’s expectation on working condition. However, for some country, like Malaysia, they are facing with unique human resource issue which is racial and religion discrimination in workplace. The discrimination can take place during entry (recruitment selection) or during onboarding which effects employees’ wages, promotion, bonus and etc. According to the PricewaterhouseCoopers on the behalf of World Federation of Personnel Management Associations (WFPMA), several challenges for human resource management were revealed. There are change management (48%), leadership development (35%), HR effective measurement (27%), organizational effectiveness (25%), compensation (25%), staffing and recruitment (24%), succession planning (20%), learning and development (19%), staffing: retention (16%), benefit cost: health and welfare (13%).

The objective of this study is to identified and discussed workplace discrimination issue in Malaysia. It is hoped that, this literature will fill the gap on scanty literature study pertaining to human resource issues in Malaysia and increase awareness regarding on discrimination of workplace to HR practitioners and management of organization.

Background and Literature Review

Workplace Diversity in Malaysia

Diversity of workplace refers to the variety of differences between people within organization. This differences can be categorize based on gender, race, ethnicity, age, and other backgrounds including disabilities. Having diversity background bring benefit to organization as people with different background think in different ways thus may boost innovations and creativity for an organization (Wahab & Jaafar, 2018). Malaysia is a diversity country, consists variety types of ethnics ranging from Malays, Chinese, Indian, Dayak, Iban, Kadazandusun, Bajau and etc. The country is home for 136 languages with Bahasa Melayu as the primary language. It is also home to world majority religions, Islams, Buddhism, Hinduism and Christian, and several types of old people religion such as animism and paganism.

Being one of diversity country, Diversity and Inclusion (D&I) gaining strong foothold for companies operating in Malaysia. Most of the operating companies hsve diversity type of workers from different background. A study done by a recruitment company, Michael Page (2017) titled Malaysia Salary and Employment Outlook, indicated that Malaysia scored an average of 93%, which on par with six others Asian countries in the survey (China, Taiwan, Hong Kong, Indonesia and Singapore). It also found that the focus area for D&I efforst were gender (47%), age (40%) and minority ethnics (25%). Another survey done by PwC (2013) with support from Bursa Malaysia, 122 companies from 11 different industries, the survey found that there is a good level of ethnic composition for management level 34% Malay, 54% Chinese, 6% Indian and 6% others.

Having diversity background within organization is regarded as one of core competency for an organization. This is because individual from different background has difference ways of thinking, different thoughts, different cultural and beliefs, different experience which make that person as an added value to organization. This can be evidence from several studies which found cultural diversity does in fact add value to firm competitive advantage (Richard, 2017), diversity composition in organization improve turnover and performance through its impact on affective, cognitive, communication and symbolic process and found that firms culturally diverse have a greater percentage change in revenue, net income and better performance.

History and Root Causes of Workplace Discrimination in Malaysia

Although, Malaysia is a diversity country with diverse population, the country continously facing with discrimination in term of employment opportunities relate to ethnicity and religions. Despite, Article 8 (1) of Malaysia Federal Constitution preserve equality protection of law, prohibits discrimination against a person or class of persons, unless there is rational basis for such discrimination, the issue remain prevalent. Perhaps, the issue is already being norm and socially embedded within particular organization and person. The dark of racial discrimination in Malaysia also strongly related to religions. This is because Malay is associated and by law must a Muslim, Chinese is Buddhism/Christian and Indian whether Hinduism or Christian. The issue of discrimination in Malaysia has long history since its independence in 1957, mainly attributed to the prevailing culture of racial politics practice. The racial tense came to peak when 13 May 1969 take place, also known as “May Tragedy”, when Chinese and Malay had a civil war. Until today, the issues remain prevalent and for some Malaysian, they hold stereotype and perceive negative thoughts and holds negative opinions toward each other. It is well common generalization among Malaysians, to associate Malay is “lazy”, Chinese is “liars” and Indian is “deception”. The “calling name” can be traced back from colonial era and as far from 1830 by a book wrote by Thomas Stamford titled History of Java (Raffles, 1830). The discrimination also can be evidence with education split along linguistic lines, Malay will attend national school, Chinese will attend Chinese private or Chinese vernacular school and Indian will attend Indian vernacular school.

Furthermore, there is feeling of dissatisfaction among Chinese towards Malay for the privilege they got especially in term of government policy. This can be seen from the opinion given by Sebastian Loh, reader of Free Malaysia Today, who opined that Malays face severe discrimination in the workplace, and Chinese people have a lot to do with that discrimination. This is because they are rail against government favouritism and point to the discrimination they face from government policies. Dissatisfaction feelings among non-Malay is not a new, its already embedded since independent. The privilege given to Malay is part of social-contract or positive-discrimination which has become the foundation of Malaysia’s today. However, the pillar itself now also becoming the foundation of relentless discrimination issue which has been permeating in all aspects from education, healthcare and employment.

The prolong conflict turning people becoming less confidence towards each other, thus make every of ethnicity confined themselves only to believe on their own ethnic. To make the matter worst, some of politician make public accusation to stir workplace discrimination issue such as former Deputy Agriculture Minister, Tajuddin Abdul Rahman, who stated that “Chinese or non-Malay companies will not hire Malay employees. The discrimination issue of workplace in Malaysia is not given a serious attention by authority, even there is several studies showing positive results, there is some people keep in denial and just live with it. This can be seen when Malaysian Chinese Association (a political party in Malaysia) Central Committee, Koh Cin Han demanded proof from Tajuddin for his statement on racism. In addition, an opinion given by Shanti Ramesh to an interview by New Strait Times, her superior would spoke Mandarin during meetings as most of meeting’s member spoke same language and some of them were cold toward outsider (those who are not coming from same background). The statement provided by Shanti denied a statement by Shamsuddin Bardan, Executive Director of Malaysian Employers Federation who stated that biggest stumbling block faced by Malay job seekers was a poor mastery of English and does not equate large number of Malay graduate who were unemployed due to racism (Free Malaysia Today, 2016). It shows that people no longer caring to respect their colleague but more incline to be in their comfort zone, being together with people who shared similar background. It can be conclude that, the issue already became common in Malaysian society and slowly transforming into norm. Perhaps, it is already becoming “take or leave it”, either to stay or to resign from the organization.

Discussion and Recommendation

Every workplace consists of people who come from different cultural, religious or social backgrounds. These differences may give rise to discrimination, regardless of the fact that many countries enact regulations to curb its occurrence. Discrimination in the workplace occurs in different forms based on characteristics, such as age, gender, race, marital status or ethnic background. Discrimination is prejudicial treatment toward a person because of a group they are a part of. While laws are in place to prevent discrimination in the workplace, many people still find themselves being discriminated against at work every day. Recognising the types of workplace discrimination will enable you to identify discrimination when it occurs, whether you, a co-worker or another employee is the victim. Malaysia is a multiracial country, with majority ethnic based on Malay followed by Chinese and Indian. Apparently, job-discrimination is a real and occurring in Malaysia. According to Pusat KOMAS Malaysia (2017), there are issues of no-headscarf uniform policy in hotel industry. As a one of majority Muslim country, Malays race-predominantly Muslims is prohibited to wear headscarf during working hour in hotel industry. The issues become hot-topic due to some of hotel chain refuse to allowed Muslim women practicing their religion by claiming they are following world-standard.

Another racial issues pertaining to employment take place in job advertisement. According to Free Malaysia Today (2017), job vacancy advertised by The Body Shop stating “Wanted: Chinese Only” was put by local franchise. However, after being severely criticized by Malaysian citizenship, and fear of being boycotting, the HR of The Body Shop make public apologize. Another racial discrimination issues occurring among major Chinese controlled-companies and business- owned which claimed to favour non-Malays in recruitment and promotion (Lee & Khalid, 2016). In regards to this matter Faaland, Parkinson, & Saniman (2003) also supported that non-Chinese not only faced obstacles in entering the job market, but experienced discrimination after entry such as denied advancement and lower earnings. Racial discrimination issues bring severe impact issues toward firm performance and objective.

In a study done by Lee &Khalid (2015), they found that race matters much more than resume quality, with Malays, Malaysia’s majority group significantly less likely to be called for interview. Malay resumes tend to be perceived and prejudged adversely, and employers’ attitudes towards public policy outcomes, particularly pertaining to education quality and employment opportunity in the public sector, also account for the observed racial disparities. Bad HR policy practice may harm those companies and may resulted mass boycott by public, as several Malay leaders has called boytcott for chinese companies when issues relating to racism being played over and over again, an example war of bread between Gardenia (Malay-owned) and Massimo (Chinese-owned) and Minister calling for Malay boycott of Chinese traders “racist” (Malay Mail, 2015). To add more, the boycot sentiments contagioulsy been calledby netizens through social media such as Facebook, Blogspot and WordPress.

Issues of discrimination in workplace does not only take place in employment opportunity but also extent to religion. A question about this issue has been raised by Member of Parliament (MP) from Malaysian Islamic Party (PAS), Siti Zailah Mohd Yusof (PAS-Rantau Panjang seat) in parliament regarding on employers who are not allowed Muslim workers to perform their prayers by claimed that it will affect workers’ productivity. There has been a several case reported, a supermarket owner refused to allow workers to pray during working hour. To the extent, praying workers were insulted with rude words and been pulled during praying. Another case, the employer has taken drastic measure by cutting employee salary if they are found went for prayer. On top of that in 2015, 22 Muslim workers are reported sent an memorandum to King of Malaysia, claimed their employer’s refused their rights to pray on basis praying is not part of employment contract (Muhammad Naufal, 2015). The workers also has lodge a complaint to Human Resource Department of Malaysia (HRDM), but sadly HRDM gave a response that they have no authority over the issue and asked the complainers to lodge report to Department of Islamic Development of Malaysia. The situation raise a question, is practicing religion is a “gray field” within Malaysia Employment Law. As far from the concern, it seems that in Employment Act 1955 is silent about practicing religion in job employment. Only Article 11 of Malaysia Federal Constitution recognized freedom of practice and profess religion. Hence, praying issue is considered as morality and ethicality of business conduct by employers in Malaysia. It is up to employers whether to allow or not to allow employee practicing their religion.

Human Resource Management As A Mediator

The effectiveness and efficiency of an organization is determined by the quality of the people it employs. Most successful organization depends on the finding the right employees who possess right skills to perform the tasks required to achieve company goals. Business success is most likely to be achieved if the personnel policies and procedures of enterprise are closely linked with and make a major contribution to the achievement of corporate objectives and strategic plans. In addition, any grievance raises, failing in productivity, high turnover and absenteeism, and unfair wages needs to be given a full attention in order for organization to attain and maintain organization goals and objectives. That is why Human Resource Management is a vital component in organization. Human Resource Management (HRM) is the term used to describe formal system devised for the management of people within an organization. Organization may outsource the HRM activities or set up their own HRM departments within their own organization. The importance of having HRM within organization is undeniably vital, from 590 for profit and non-profit firms from the National Organization Survey, they found positive relationship HRM practices and with the firm performance.

HR is an advocate for employees. The functions of an HR Professional are to make sure that all employees are treated fairly and equitably and that the needs of the business are balanced against the needs of the employees. Human Resource Management functions as follows; staffing; which finding a right person with a right skills, compensation and benefits; salary and fringes, human resource development; training, performance and career path, work relations; settle any dispute arise and function as workers union, and lastly safety and health; safety and health programs.

Furthermore, human resource management is regarded as one of the key element for the organization to achieve competitive advantage. Based on the study by Caliskan (2010) suggested that HR practices of an organization can assist firm to achieve competitive advantage. This is because the human capital can be used to improve 4M which are material, machine, money and methods and the most critical reason is that human resources are vary from one organizations to another organization ; it is unique and inimitable. The imitability of human resource is depending on the skills, ability and knowledge possess by the employee. To achieve this level, firm needs to have effective strategic human resource planning by providing employee with training and learning for theirs development. This statement can be supported by several studies such as effective HR practices have positive correlation with employee’s performance and HRM practices on employee’s performance is significantly positive and astonishing.

Human resource management plays pivotal roles, acting as mediator officer for the organization, between employee and firm. They screening and filtering, doing interview, selecting, recruiting, planning an onboarding activities and preparing employment package for the workers. Human resource managers are likely labeled as administrative function of an organization. The proposed idea, human resource management should hold holistic view in practising their task and start to adopt morality value by developing moral discretion within their profession. First, holistic is defined as looking at whole view, not being narrow-minded, make better judgement and no affected by bias, generalization and stereotype. Second, adopt morality and creating moral discretion is define as having a moral judgement opinion (knows how to differentiate between what is right and wrong), doing task with utmost good faith for the benefit of the firm even there is possibility of losing job and provide and ethical advise and decision.


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