Impact of Salary, Promotion and Recognition on Work Motivation among Manufacturing Employees in Penang

Abstract

Businesses must prioritize employee wellbeing over letting them go, as it is more important to maintain employees than to let them go. Employee motivation is a crucial factor that can significantly boost productivity and enable an organization to achieve higher production levels. A motivated workforce is crucial for businesses to avoid facing dangerous situations. To maintain competitiveness, organizations must keep a motivated and competent workforce. Occasionally, a decrease in employee motivation can result in a lack of interest and failure to achieve specific objectives. New employees often experience dissatisfaction, disengagement, and disloyalty when they perceive mistreatment and unfair treatment in their workplace. This study aims to identify the factors (salary, rewards, and promotion) influencing employee motivation in a manufacturing company in Penang. The study employs convenience sampling with nonprobability sampling, utilizing the PLS-SEM sample size table to determine the sample size. The population is 2,274,146 employees in Penang's manufacturing sector. This study uses a 124 sample size with an 80% statistical power, distributed to 136 employees in a Penang manufacturing company. The study employs a quantitative method based on descriptive analysis to accurately define and explain employee motivation within a manufacturing company in Penang. The hypothesis testing results confirm H1 and H3, while rejecting H2 due to its impact on promotion and motivation at work. Employees should stay updated on the latest technologies and industry news to promote development and growth in their jobs, thereby qualifying for a better remuneration package. To gain a competitive edge, organizations should implement competitive employee policies and procedures and ensure their rewards system aligns with employee skills to retain and motivate them.