Semiconductors manufacturing sector hascontributed large portion of income to Malaysia. It creates a lot of employmentopportunities to our citizen. According to MIDA (Malaysia InvestmentDevelopment Authority), Semiconductor manufacturing has contributingsignificantly to the country’s exports (32.8 percent) and employment (27.
2percent) in 2013.In this modern era, the labor productivity has been become akey focus for foreign investor especially multinational corporations to investtheir business in other countries. Labor productivity can consider as a metricto measure the efficiency of workforce in a country, it acts as an indicatorfor quality’s workforce towards the output of the products. Labor productivity defined as the ratio ofthe output of goods and services to the labor hours devoted to the productionof that output.
Productivity can be defined in few perspectives. Inmanufacturing field, the productivity always measures as labor productivitywhich means that the units of work placed or produced per man-hours. In shortit can be representing in the equation below:Labor Productivity= Output/ Labor hoursIn general, productivity demonstrate thehow well for an individual entity uses its resources to produce output frominputs.(Rao, Sreenivasan, & Nv, 2015)In this research study, the five factorsof affecting the labor productivity in semiconductors industry have beenidentified which included motivation, management system, supervision, TechnicalSkills, and working environment. These 5 factors believe to have a relationshiptowards the labor productivity or performance of the workers. The 5 factors ofvariable will be tabulated in survey questionnaire and distribute to targetrespondents to collect the data for analysis.
Motivation has been defined as theindividual’s intensity, direction and persistence of effort towards the jobscope.(Robbins & Judge, 2013)In term of productivity, high motivated person believe to have a higherinterest towards the works compared to low motivated person. He or she withhigh motivated behavior will react proactive and more responsible to their jobresponsibility. Or in other words, high motivated person might perform the jobfaster compare to low motivated person. Therefore, in this research study wewill examine the relationship of motivation behavior towards the motivation.The second factor which affecting the labor productivity ismanagement system which can defined into four functions. There are planning,organizing, leading, and controlling. Planning function is to well establishthe company’s goal and define the overall strategy in order to achieve it.
Organizing however is to determine the tasks which to be done by certain groupof people, expert or individual. A well organizing plan will make sure that theproject running smooth with minimum error and problem happen. Therefore, assignthe correct person to do the correct right job is extremely important. Leadingmeans that some leadership skills which able to generate a well healthycommunication and relationship between superior and subordinate.
Resolve theproblems and conflicts among members. The last function for management is thecontrolling which mean that it able to monitor the organization’s performanceby correct individual rewards, payment systems and even the punishment in orderto make sure the company perform and achieving set goal. (Robbins & Judge, 2013)The third factor which affecting the labor productivity issupervision whereby it can be defined as the ability of superiors to influencethe behavior of subordinatesto take a particular course of action. (Omisore, 2014)Supervision is considering one of the important factor in Semiconductorsmanufacturing because most of the firms are running 24 hours with 7dayscontinuously. Especially for night shift worker, lack of supervision might endup the workers not focusing on work and commit on misconduct behaviors such aschit-chatting, playing smartphone or sleeping.
This is due to most of theexecutive or manager level person are normal shift working hours, most oftenthe night shift operation was not well supervised and showing the low output orlow productivity. The fourth factor which affecting thelabor productivity is technical skills. Training and developing of workers isimportant in semiconductors field because effective manpower planning anddevelopment plays a crucial role in support of a flexible and high dynamicchange workplace, especially for semiconductors manufacturing which running ina fast pace trend compared to other industries. (Karim, Hassan, Yunus, & Hashim, 2013)The experienced worker with well-trainedtechnical skills definitely will better compared to those new comers which havelack of skills and experience.
Therefore, technical skills contribute a majorfactor to drive the productivity improvement. The last factor which affecting the laborproductivity is working environment. There is a research study conducted byFinland showing that significant correlation between working environment andlabor productivity. The criteria such as the 5S housekeeping, conduciveworkplace and the company facility play a very important role for laborproductivity.(Peshave, 2004)Obviously great working environment with minimum disturbance will create a highproductivity workplace.
However, the poor working environment with a lot noise,messy production layout and workstation arrangement will create a negativeimpact on labor productivity. Thus, in this project, working environment willbe accessed as one of the factor influencing the labor productivity. Previously,there were a lot of research study on how to improve on the output ofsemiconductor manufacturing by implementing automation and minimize humanintervention. However, this still can’t achieve the operational expectedperformance. This is because they overlooked on the labor productivity.
Nowadays, more and more company start to realize that labor productivity playsan important role to strive for excellent manufacturing and operationalefficiency. Labor productivity is the rate of output per worker in a businesswhereby it counts by per hour rate. Meaning that if a company manage to improvetheir labor productivity, they able to run a company by less worker butincreasing on output quantity. As such, company able to gain more profit marginand generate more revenue.
This will increase the quality of the worker as wellas manufacturing efficiency. Meanwhile high productivity labor will also getthe higher rewards recognition. Indirectly this also helping the worker togenerate higher income and improve living standard. Ontop of that, improving on labor productivity will also drive for better grossdomestic product (GDP) of an area. It highly depends on the status of laborproductivity of all business. A healthy labor sector will help an economysustain growth and encourages consumer spending as well as financial lending.
This is because in the economy view of perspective, higher labor productivitydrive for better income for all worker. Therefore, they have more spendingpower and disposable income. This will indirectly drive for improving of grossdomestic product (GDP). 1.2 Problem StatementRecently labor productivity has beenbecome a focus for industrial company as a one of key performance measuringcriteria. It was noticed that the majority of the industrial firms have encounteredinconsistent number of production output versus labor hours which is defined aslabor productivity.
Therefore, the company has the difficulty to optimize thenumber of headcount in order to sustain the production output. Various factorcan be affected the labor efficiency and performance which is yet to beidentified. Normally, the labor cost contribute around 30% to 50% of theoverall operation cost.(Mahamid, 2013) In proper managed on the labor resources willcausing company loss in term of business revenue on headcount budgetallocation. Moreover, globalization nowadays hasrapidly evolved and especially for those Multinational Corporation (MNC) whowish to invest in developing country. Labor productivity has act as keyindicator to determine the labor efficiency and performance on a certaincountry. Low labor cost might not be the right priority for investor but thelabor productivity will take into account for measurement. Therefore, identifythe factors which affecting the low labor productivity is important toguarantee the global investment to our country and economic growth.
1.3 Research QuestionsFrom the problemsstatement, 5 research questions have been established towards the factors thataffecting the labor productivity in the industrial company. The scope has beennarrow down to Semiconductor sector which is 24/7 production running industry. The 5 researchquestions stated as per below:1) Whatis the relationship between motivation and labor productivity in Semiconductorindustry?2) Whatis the relationship between management System and labor productivity in Semiconductorindustry?3) Whatis the relationship between supervision and labor productivity in Semiconductorindustry?4) Whatis the relationship between technical skills and labor productivity in Semiconductorindustry?5) Whatis the relationship between working environment and labor productivityin Semiconductor industry?1.4 Research objectivesThe objective of this research is to studythe labor productivity in the semiconductors manufacturing field, several of factorsthat affecting the labor productivity will be identified and tabulated intosurvey questionnaire and distributed to target population to get the feedback.From the data collected, analysis to be conducted through the data statisticaltool. Meanwhile, at the end of thefinding, the recommendation on how to improve on labor productivity andminimize the factors impacted on labor productivity will be provided.The aim is supported by the objectivestated below.
1) Todetermine the relationship between motivation and labor productivity in Semiconductorindustry.2) Todetermine the relationship between management System and laborproductivity in Semiconductor industry.3) Todetermine the relationship between supervision and labor productivity inSemiconductor industry.
4) Todetermine the relationship between technical skills and laborproductivity in Semiconductor industry.5) Todetermine the relationship between work environment and laborproductivity in Semiconductor industry. 1.5Scope of studyIn this research, the scopewill be focusing on the factors which influencing the labor productivity in a semiconductorcompany.
Various type of journal paper and articles which related to this topicwill be collected and digested as literature review. Survey questionnaire hencewill be prepared based on the fact that researchers have conducted the studyand potential constructs will be then posted in Likert Scale surveyquestionnaire to let respondents to select the personal own opinion. Then thedata will be collected and compile into a datasheet with the aid of statisticaltools to analysis the results. Target respondents will be the workers who workin semiconductor industry, and questionnaire will be randomly distributed withdisregard with their demographic profile, race, gender, age, and position. Thekey survey objectives will be surrounding on the research questions which have beenpre-defined in the hypotheses.
In this research study, therewill be one dependent variable which is labor productivity, then follow by thefive research questions factors which are motivation, management, supervision,technical skills and work environment, and all of these five factors will actas independent variables. Statistical tools will be used to determine the relationshipbetween dependent variable and independent variables. Thus, with the fact ofdata and come up with a conclusion that whether or not all these variables havea direct or indirect relationship with labor productivity.