BH31303 LABOR AND PRODUCTIVITY

MID TERM EXAMINATION

Submited To: Associate Professor Datuk Dr. Kasim Md Mansur

Hng Wei Kian

BB13110161

Margaret Teoh Su-Er

BB13110251

Muhammad Iqbal Abdul Hamid

BB13110317

Chen Shy Woei

BB13110068

DATE OF SUBMISSION: 12 APRIL 2016

Question 1
Labour Productivity is useful in examining short term and cyclical
changes in the economy. Discuss. (25 marks)
Labour productivity is useful in examining short-term and cyclical changes
in the economy. So, every countries and companies will always emphasis
labour productivity from times to times. This is because economy of a
country can determine by refer to the productivity. Productivity is better
when output greater than input by using formula of total output divided by
total input such as raw materials, technology, labours, capital and others.
For sure, every country will demand different amount of productivity due
to the ability of a country. For example, Malaysia is a developing country
and for sure will not expect their productivity as high as developed
countries. The graph below is productivity in Malaysia from 2010 to
2015.The graph shows that productivity of Malaysia increased from years
to years and expected will increase from the years onward.

Productivity Level

Productivity Level

x-axis =Years

y-axis=RM thousand *Retrieved from Malaysias. (2015).

Before going further, pattern of input and output flows needs to be

know. This situation will happen because it is not necessary true the
economy will be increase when output and input increase due to flow and
measurement of those not the same. For sure, there have some input for

labour productivity that can estimate short-term and cyclical change in

economy .It includes raw material, labour. Raw material is important
because it will affect quality of products. But, the most important parts will
be labour. This is because labour will be the person who will control the all
production process. If labour is enough capable to change the worst
environment to a better, it will increase the productivity. The supply of
products and service will be increase in market. This means the customers
have more choice and can increase the life style of living and will lead the
growth of economic.
The economy will be identified and pass through different stages .The
beginning stage start from productivity of labour. This is important
because productivity will directly affect the economy and competitiveness
of a country. This is because when productivity increased, the company
would like to increase the number of labour to meet the demand as well
as supply enough products to the market. So, company will increase their
working hours. Therefore, company needs to increase the salary of
labours for retain them. When labours have enough money, they will
choose to buy some products that will increase their standard of living.
This situation will increase the demand of products and continue to hire
more labours. This repetition of cycle will lead the economy growth in a
steady rate. But, increasing the working hours do not necessary increase
the productivity due to the quality of labour is quite low when compare to
other

countries

like

Singapore

and

Korea.

Malaysian

Productivity

Corporation state that productivity of Malaysia increase 4.5% yearly, but

growth of economy still lower than other countries.
When labour productivity increase, this means the supply of goods
and service will be increase in the market too. This will happen because a
lot of countries will across another country and economy of country
become open. This means that residents of a country not necessary want
go overseas to get the product and increase economy of other country.
This situation will less happen after government of Malaysia increase
incentives to promote Foreign Direct Investment (FDI) to Malaysia. Apart

from that, Malaysia also exports a lot of products from different counties.
Those situations can afford the needs of country and residents. There will
have a lot of choices for residents to choose. Purchasing power will be
increase among residents and economy sure better than the country
which have low labour productivity.
Besides, price of the products will be decrease too and inflation will
not occur when productivity of labour increased. This situation will happen
because company will produce a large amount of products to meet
demand of customers. It will generate economics of scale. Economics of
scale will produce larger amount but reduce the cost of products at the
same time. Company will take advantages of discount when want to buy a
large amount of input. Apart from that, company can hire some labours
that have more qualification and specialization to work in the economy.
This will happen because workers can do more challenge work to help
increase the productivity. This situation leads the company expand and
increase the productivity. At the end, company reduce the cost as well as
growth of economies will be accomplish when achieve economies of scale.
In other way, labour productivity sometimes will decrease the
economy. This situation will happen because company do not want to hire
enough labours to meet the demand of customers. Sometimes, company
will use high technology of machine to replace the workforce of labours.
Although this steps will increase productivity, but it does not means that
will increase the economy. This is because the residents of country will
lose the opportunity of jobs and will directly dont have enough salary to
afford the living life. When they dont have enough money, they wont
have demand to some products that they cant be affords. This situation
leads supply of product will be surplus and disequilibrium will be occurs
and products will not easily performing well in market. In the end,
government will help companies by impose price floor. Meanwhile,
company will also reduce their price for attract interest of customers.

In addition, we know that the productivity will examine the economy.

But, sometimes demands of consumers will just affect the economy. When
customers feel some products will suitable to them, they will buy it and
consume it. But, customer will not buy it when customers feel that the
products will not suitable to them. This situation will lead productivity
decrease and inflation will occur due to increase of price. So, we can say
that labour productivity will not necessary increase economy if demand of
customers do not fulfil. When this situation occurs, what company can do
is carry out some surveys and collect feedback from customers as well as
tie relationship with them. This situation will lead company know the taste
and demand of customers. After that, company can produce the products
that suitable to them. This situation will increase growth of economies
because purchasing power of customers increase from times to times.
In conclusion, productivity in a company is important for company to
examining short term and cyclical change in economy.
Reference
1. Jagannath Mallick.(2013). Globalisation and Labor Productivity in
OECD Regions. University of Pardubice, Pardubice, Czech
Republic
Retrieved
http://www.investopedia.com/articles/03/012703.asp

from
10

April

2016
2. Economic Growth. Spark Notes.com
Retrieved from
http://www.sparknotes.com/economics/macro/growth/section3.rht
ml 10
April 2016

Question 2
a. Briefly analyse the background of manufacturing sectors in
Sabah (type of manufacturing sectors operate in Sabah, and
the level of production in the past years) (10 marks)
Manufacturing sector is one of the major content area that targeted in the
Outline Perspective Plan of Sabah (OPPS) which is planned by the
government in terms of improving the overall economic performance for
States of Sabah.
As we know that, oil and natural gas, oil palm, rubber as some of the
important leading contribution to the states revenues, export, jobs and
Gross Domestic Product (GDP). This showed that Sabah is a resource rich
states and its really rely on the raw material to fuel to growth of
economics, However, in the years of 1980s, Sabah has cooperate with the
federal government in boost the states industrial arm, which invest a lot
in developing the manufacturing activities.( Sabah Report, 2011)

In the fourth quarter year of 2010, the manufacturing contribute

around 27.2% of Malaysia GDP, which shows a huge improvement in
which the sector has facing global recession and rebounded from it to
grow 11.4% year by year. BY this, the department of Statistics Malaysia
has figured out that Sabah as contribute around 7.7% of GDP to the
states overall GDP, which having around RM2.39 billion and equivalent to
749 dollars in the year of 2009. However, that was 8.8% lesser than in the
year of 2008. As the effect of global downturn or recession brings
significant effect to the society.
This further reveals that there will be significant gap between Sabah
and other states in Malaysia nowadays honestly. However, as the richness
with full of natural resources and all the things that located in Sabah, the
only way to overcome this situation and boost up the economic condition
only by increasing the number and quality of value adding business in the
states. By this, there are several plans that we have to review back to the
Sabah Action Blueprint of 1987, followed by the Outline Perspective Plan
of Sabah in 1993-2010. This both plans has centralized the idea in the
generate value added industries in the states. This is same with the Sabah
Industrial Master Plan and the Sabah Industrial Action Plan. Sabah state
government has also launched a new key body as the named of Sabah
Economic Development Corporation (SEDCO) in 1979 under Ministry of
Industrial and Rural Development. This has change the organization and
breaks into two that this called Ministry of Industrial Development(MID)
with Sabah Economic Development Corporation that still remain the name
as industrial activities are needed to be focus on giving more capital and
investment in launching all the development progress. The other two
bodies that will be the core competencies of industrial activities in Sabah
will be the Department of Industrial Development and Kota Kinabalu
Industrial Park (KKIP).
Actually

the

government

of

Sabah

has

launched

several

implementation plan as to further strengthen the economic impact that

assisted by the industrial power. KKIP was launched in 1995 and it was the

result for the government to classify the industrial development together,

by giving opportunity for the enterprise in sharing the infrastructure, and
maximize the productivity for different business synergies. It really help
around 217 companies to located here and it continue to grow the
economics of Sabah and push it for the rate of 9.7% from 2001 to 2005 as
the manufacturing grow by average, there is equal to 6.9% into the
overall GDP in Malaysia and shows the growth rate of 5.3%.
According to borneotrade.com, there are many minor sectors of
manufacturing that can be found in Sabah, this include food and beverage
manufacturing industries such as Desa Cattle (Sabah) Sdn Bhd that focus
on providing milk, Diamond Coffee Factory Sdn Bhd, Kali Seaffod Eatable
Sdn Bhd, Kimanis Food Industries Sdn Bhd and so on. Textiles such as
Jamilah

Textile

Sinsuran

that

specialize

on

clothes

and

Fabric

Manufacturing that locared in Jalan Tun Fuad Stephen. Wearing apparel,

wood and cork product, furniture and fixtures such as Kinabalu Furniture
Manufacturing Factory Sdn Bhd, Kinabuild (Sabah) Sdn Bhd and the Sabah
West Coast Furniture Manufacturers and Retailers Association. Paper,
plastics and can product such as Lok Kawi plastic industries Sdn Bhd,
Welda intergrated industries Sdn Bhd, Zeeshen industry Sdn Bhd and so
on. Rubber product such as DS rubber product Sdn Bhd. (Federation of
Sabah Industries) Gases such as Sabah Energy Corporation Sdn Bhd.
Metals as the Colform Sdn Bhd and Aluminium Metal Bersatu Sdn Bhd and
Steel Industries (Sabah) Sdn Bhd.

b. Discuss the trend of labour productivity of manufacturing

sectors in Sabah in the past years, and its contribution to
the states GDP. (15 marks)

Number of Employed Person in Sabah by Industry, 2010-2014

2010

2011

2012

2013

2014

Retrieved from: Department of Statistics Malaysia,

2015
The graph above shows the level of employed person according to the
activities economy in Sabah from year 2010 until 2014. As we can see,
manufacturing sectors are placed as third base on the topic of workers
needed compare to most of the employee been used which is agricultural
sector. The rate of getting employed has been shows as fluctuate situation
whereby it reached the peak at 163,000 persons on 2011, however it was
reduce 3.13% to 157900 persons in 2012. It drops again around 2.4 % to
154100 persons to the year 2013. It continue decrease to 152400 persons
has been recruited in 2014. The main reason for this things happen might
because of the minimum wage policy that needed SMEs to implement
RM800 for each workers no matter he or she is local or foreign workers. It
caused the SMEs faced a difficult challenges as to fully implement this
policy

especially

as

Plastic

Manufacturers.

Malaysian

Plastics

Manufacturers Association also carry out this survey to see whether many

company are suffering for high pressure manufacturing cost or not.

(Malaysian Plastic Manufacturers Association, 2014)
According to Free Malaysia Today.com, federal government has also
impose the levy hiked from 1 February for foreign workers. Federal
government has placed the industries or manufacturers in Sabah in to the
place of difficulties with GST, minimum wages and depressed ringgit in the
future. We strongly worried that this the decrease of worker employed
might continue in the future as this really struggling the Sabah SMEs and
the people live here. (John Joseph, 2016)
By this, ways to boost up the economics such as focusing on
developing the Kota Kinabalu Industrial Park (KKIP) should be one of the
important strategies for it.

Their effort has been proved by attracting

several company like Beng Teng Motors Sdn Bhd in automotive cluster
with getting the investment amount of RM200 million as the key to boost
the automobile industry to help others especially in manufacturing
industry. By this, their target will be ignites the manufacturing sectors in
Sabah to achieved 20% of GDP contribution in 2020 as the currently only
rate as 9% compared to the overall outcome. The investment by those
company can be related with a huge amount of labour needed in the
market as to create 23,032 new jobs by 2020 respectively. It can also help
SMEs to further grabbing the opportunity by using the supply of raw
material to other relate business to manufacturers. It can eventually
increase the productivity in manufacturing industry. (Daily Express)

GDP Sabah by Industry from year 2010-2013

2010

2011

2012

2013

Retrieved from: Malaysian Economics Statistics, Time-Series Data 2015.

Department of Statistics Malaysia, (RM Million) (000)
The graph above show that GDP level carry out in the Manufacturing
industries is placed in the fourth position that behind the agriculture
mining and wholesale, retail trade, accommodation, food and beverage
industry. It shows slightly increase as 9.37% of increasing that is from RM
3296 million to RM 3605 million from 2010 to 2013.
The increasing number of production for Manufacturers in Sabah is
because of the investment of government to project or expand the focus
manufacturing area such as Sabah Oil and Gas Terminal (SOGT), Kimanis
Power Plant, Sabah Ammonia_Urea (SAMUR) plant, the Palm Oil Industries
Clusters (POICs) in Lahad Datu and Sandakan, as well as the Kota Kinabalu
Industrial Park. The development for the infrastructure of production that
can be increase the productivity and raise our competitiveness in the line
with achieve high income states by 2020. (Borneo Post Online 2014). In
the future viewing situation, the Sabah Manufacturing sector investment
has increase a lot to RM20.3 billion under the Tenth Malaysian Plan. It is
due to the success of Industrial Development and Research Department,

Sabah Economic Development, Corporation a, Kota Kinabalu Industrial

Park and Palm Oil industral Cluster and others. The effectiveness and
productivity of the staff of industrial development ministry has operating
RM6.1 million management budget to handle Rm50.6 million worth of
project by only 48 staffs needed in that ministry has been shown. (Daily
Express, 2015)
Reference
1. Federation of Sabah Industries
http://www.fsm.my/directory.cfm?Sector=11
2. Borneo Trade. Manufacturing Industries Major Group List
http://www.sabah.com.my/borneotrade/d6.htm
3. Daily Express. 2015. Sabah Manufacturing Sector: Investment Value
Surges Two Fold to RM20.2 Billion. 15 May 2015
http://www.dailyexpress.com.my/news.cfm?NewsID=99764
4. Borneo Post Online. 2014. Sabahs Economy on Right Track with
Halatuju Development Agenda. 1 January 2014
http://www.theborneopost.com/2014/01/01/sabahs-economy-onright-track-with-halatuju-development-agenda/
5. Department of Statistics Malaysia. Time Series Labour Employment
Data 2010-2014. s
https://www.statistics.gov.my/dosm/uploads/files/3_Time
%20Series/Labour_1982-2014/12_TABLE12.pdf
6. The Report: Sabah 2011
https://books.google.com.my/books?id=nKJoQ4o_DsC&pg=PA89&lpg=PA89&dq=the+history+of+sabah+industrial+
activities&source=bl&ots=XMty2QVtsy&sig=M41FvAQhK61txjK85eoQ4bYO3c&hl=en&sa=X&redir_esc=y#v=onepage&q&f=false
7. EPP 1: Anchoring on Kota Kinabalu Industrial Park as a Focus to
Development The Manufacturing Industry In Sabah
http://www.sedia.com.my/SDC_EPP/Manufacturing_EPPs.pdf
8. John Joseph. 2016. Sabahan Cry Foul Over New Foreign Worker Levy
.Free Malaysia Today. 4 February 2016.
http://www.freemalaysiatoday.com/category/nation/2016/02/04/saba
hans-cry-foul-over-new-foreign-worker-levy/
9. MPMA survey form on Impact of Minimum Wage Policy
http://www.mpma.org.my/Documents/Cir%20No.5%20Min%20Wage
%20Impact_MPMA%20Survey%202014.pdf

10.

Department of Statistics Malaysia. GDP from each States by

Industry from 2010-2013

https://www.statistics.gov.my/dosm/uploads/files/3_Time
%20Series/Malaysia_Time_Series_2015/Penerbitan_Time_Series_201
5.pdf

Question 3
There is a strong relationship between productivity and the
combination of input and output. Discuss these relationships by
giving some examples related to Malaysia in the past years. (25
Marks)
Productivity is an economic term to describing the relationship between
output and input and also to measure the efficiency. Therefore, have
different kind of the input such as raw materials, labor, and assets
however output is represent the revenue, unit of finished goods and
others. In addition, the productivity can calculate by total GDP divide by
the labor hour or in equation form since the economic as a whole.
Productivity=

Total GDP
Total labor Hour

The productivity and combination of input and output has the strong
relationship between of them. According to the Paul Krugman said that
productivity is not everything, but in the long run it almost everything,
which means that adding the input such as the raw materials, labor to
increase the output later would achieved the diminishing marginal return
therefore source of real growth is the productivity in the long run.
(Economic Malaysia, 2013).In Malaysia, the performance of productivity is
shows the positive trend or growing trend form 2010 to 2014. (refer to
Graph 1)

Productivity Level
Productivity Level

Graph 1
x-axis=Years

y-axis=RM thousand *Retrieved from Malaysias. (2015).

Besides, the trend of the productivity level for the Malaysia shows
the growing trend would increase the standard living of the resident. The
increasing of productivity for the Malaysia will create more work
opportunity or employment opportunity in certain sectors such as primary,
secondary, and tertiary sectors. According to the Malaysia Productivity
Report 2014/2015, mention that the construction sector achieved the
highest growth and positive performance with 13.2% then followed by the
mining with 6.5% and agriculture growth with 3.9% , the manufacturing
with 3.8 % and the services with 2.2%. (refer to Graph 2)Therefore, this
growth productivity of the major economic sector would increase the job
opportunity and due to increase the standard living of the resident
because the resident able to fulfill their need and want in their daily life
such as food, house, travel , education , healthcare and so on. In other
words, increase the standard living is increasing the power purchasing or
the financial ability for the resident to buy the final goods and services.

Growth(%)

Growth(%)

Graph 2
Computed from: Department of Statistics, Malaysia

*Retrieved from

Malaysias. (2015).
Furthermore, in productivity the input play an importance role to
produce the output. For example the input such as labor is one of the
main element to increase the productivity and due to increase the GDP
per capital in Malaysia. This is because if the labor productivity shows the
increase trend therefore the GDP per capital for the country would
increase. Graph below shows relationship would correspond between labor
productivity and GDP per capital in different of the country. ( refer to
Graph 3)

Labor productivity
GDP per capital

Graph 3

x-axis=countries

y-axis=USD dollar

*Retrieved from

Malaysias.

(2015).
Thus, the labor productivity as the importance for the country to increase
their GDP per capital whiles in certain sector such agriculture, mining,
construction and so on. This is because the labor productivity also one of
measurement of the economic growth for a country therefore the
definition of labor productivity is the quantity of the output produced
divide by quantity of labor input or in equation is
Labor productivity=

Output
Input

The labor productivity would increase the GDP per capital and due to
improve the economic in the Malaysia. This is because while the GDP per
capital is increase the economic situation would become positive trend
and this would good impact for the resident in Malaysia.
Next, the relationship between the combination input and output
would increase the flow FDI in Malaysia. The foreign investor is interest to
invest their business of the country, they will think about the resources,
labor or human resources, technology and also the productivity of that
country. In addition, Malaysia is the strategic location to do the business
because the Malaysia has enough raw materials, skilled employees, using
the machinery to operate the production process. Moreover, this will make
the foreign investor to invest in Malaysia therefore the flow of FDI would
increase and due to improve the economic in 2014 or in the future. In
addition, according to the Department of Statistics in FDI 2014 shows that
Malaysia achieved net of RM 35.3 billion FDI.
In conclusion, productivity for a country especially Malaysia play an
importance role to improve the economic and the GDP of the country.

References

1. Department of Statistics Malaysia.

https://www.statistics.gov.my/dosm/index.php?
r=column/ctheme&menu_id=azJjRWpYL0VBYU90TVhpclByWjdMQT0
9&bul_id=ck4zZ2VCR3Z3QjRwNnMwNjdoK3g4QT09. 9th April 2016
2. Economics Malaysia. 2013. Productivity is Very Important: Except
when it is not.
Retrieved from
http://econsmalaysia.blogspot.my/2013/02/productivity-is-veryimportant-except.html. 27 February 2013

Question 4
Malaysia could strengthen its human capital to ensure that
knowledge-based economy could be realized as a platform to
sustain

rapid

rate

of

economic

growth

and

enhance

international competitiveness so as to achieve the objectives of

Vision year 2020. Discuss government policies and approaches to
increase labour productivity, both in public and private sector. (25
marks)
Productivity is a measure of the efficiency of factors of production.
Productivity is commonly defined as a ratio of a volume measure of output
to a measure of input use. It also refers to an increase in the value of
outputs produced for a given level of inputs, over a given period of time.
Labour productivity refers to the quantity of output produced by a given
quantity of labour input. Labour productivity is a revealing indicator of
several economic indicators as it offers a dynamic measure if economic
growth,

competitiveness

and

living

standards

within

an

economy

(Freeman, 2008a). Labour productivity is particularly important in the

economic and statistical analysis of a country. It is the measure of labour
productivity which helps explain the principal economic foundations that

are necessary for both economic growth and social development

(Freeman, 2008b).
According to Tenth Malaysia Plan (2011-2015: Progress), there are
16 strategies that have been laid down in order to improve the Malaysian
labour productivity in both public and private sector. The strategies will be
divided into three different levels that is the national level, industry level
and at enterprise level.
In the national level there would be 9 strategies. First, Formulating a
Five-year Malaysia Productivity Blueprint. A five-year productivity blueprint
will be introduced to place productivity enhancement at the forefront of
the national development agenda. The blueprint will outline a deeper
elaboration of strategies and action plan with the specific targets and
schedule of implementation. The blueprint will be prepared in consultation
with industry because to help the private sector, government involvement
in certain policies and matter could improve the labour productivity in
each different industry.
Second, Strengthening the Governance and Institutional Mechanism
for Implementation of Productivity Strategies. A National Productivity
Council (NPC), chaired by the prime minister, will be established to
provide high level leadership to drive the productivity agenda. The NPC
will review a formulate policies and liaise with different agencies to ensure
cooperation with all parties involve and they would also have the
capabilities and power to plan, and control every productivity agenda
implementation.
Third, Introducing Enhancement as a Key Performance Indicator
(KPI) for All Development Initiatives. Malaysia decides to employ Key
Performance Evaluation (KPIs) as one of their performance measurement
tools. The KPIs aimed at boosting the performance of the civil service in
line with the government effort to improve public service delivery system
and as assurance that the element of integrity and good governance are
being carried out (Zakaria et al., 2011). By using KPIs, all employees

performance could be indicate and point out where are their weaknesses.
It could boost the employee productivity when the right solution is
implemented to

overcome their weakness such as trainings and

developments, motivations and rewards.

Fourth, Accelerating Regulatory Reforms. It is to ensure new and
existing regulations as well as their administration and enforcement are
aligned with good regulatory practices. This will be done by expanding the
adoption of the National Policy on Development and Implementation of
Regulations (NPDIR), and conducting regular regulatory review for
ministries and agencies. In addition, a cost-in and cost-out evaluation will
be applied on all new business regulations to reduce regulatory burden.
Under this evaluation, the direct cost of each new regulation on the
private sector will be determined and the introduction of the new
regulation will need to be accompanied by the abolishment of outdated or
unnecessary business regulations to ensure that the total regulatory cost
to business does not increase.
Fifth, Strengthening Human Capital. The human capital quality will
be improving by the efficiency of the labor market through better
coordination between the labor demand and supply mechanism. Measures
will also be focused on re-skilling and up-skilling local talent including
technical and vocational education and training (TVET), attracting foreign
talent and leveraging on Malaysias diaspora. To ensure a compensation
system that corresponds with productivity, the National Wage Index will
be introduced and the adoption of the Productivity-Linked Wage System
(PLWS) will be further expanded. Female participation rate in the labour
force will also be raised through the introduction of more flexible working
arrangement.
Sixth, Enhancing Productivity in the Public Sector. Productivity in the
public sector will be enhanced among others, through the rationalization
of

government

institutions

and

adoption

of

performance-based

remuneration system. To reduce overlapping functions and redundancy

among government agencies, a regular review of the roles and functions

of government institutions will be conducted. Agencies with overlapping

functions will be streamlined while the setting up of new agencies will only
be considered after a thorough review to increase delivery. To further
increase productivity and efficiency in the public sector, a performancebased reward system will be introduced. The key performance indicators
(KPIs) of ministries and agencies will be aligned to include measures
related to productivity improvements.
Seventh, Consolidating and Rationalizing Government Incentives.
Untargeted subsidies, incentives and assistance will be eliminated.
Government incentives will be redesigned to cater for industry specific
needs to maximize results. The provision of incentive and assistance will
be underpinned by specific outcomes and KPIs, including productivity
improvement.
Eighth,

Promoting

Innovation.

Innovation

will

be

further

strengthened by focusing on relational capital, that is, improving

collaboration and coordination among all stakeholders involved in
research and development, commercialization and innovation (R&D, C&I)
universities, research institutions, industry and government.
Ninth, Establishing a Dedicated National Productivity Portal (NPP).
NPP will be establish to disseminate productivity-related information,
including to showcase the best practices by industries and productivityrelated initiatives and programs. This portal will also provide adequate
information for firms to undertake a self-assessment of their productivity
level relative to other firms in the same industry.
In the industry level there would be two strategies. First, Appointing
Productivity Champions. Productivity champions will be identified to
spearhead productivity initiatives at industry level. Industry association or
market leaders within an industry will be appointed as productivity
champions. They will assist in the preparation of the five-year Productivity
Blueprint. In addition, they will be responsible for the formulation of
industry-specific productivity roadmaps, which will include the setting of

productivity targets for their respective industries and detail initiatives to

achieve the targets. The achievement of the productivity targets will be
made a key criterion for firms to apply for government assistance and
incentives.
Second, Customizing Industry-Level Productivity Programs. It will be
introduced to address pain points and challenges as well as exploit
opportunities and strengths in specific industries towards enhancing
productivity. This is to ensure programs are targeted and achieve the
desired productivity outcomes.
In the enterprise level there would be five strategies. First,
Promoting Productivity Performance Targets. Provision of incentives and
assistance to firms will be contingent upon achievement of specific
productivity targets at the firm level.
Second, Introduction Firm-Level Intervention Programs. Intervention
programs will be introduced to assist firms enhance their efficiency and
productivity,

including

through

improvement

in

work

process

and

application of information and communication technology (ICT). For this

purpose, among others, the University Community Transformation Centre
(UCTC) programs will be expanded to include productivity improvement
initiatives.
Third, Promoting and Up-scaling Productivity Health-Check. It is to
identify specific issues and assess current operational capacities and
capabilities of the enterprises will be expanded. The results of the healthcheck will be used in formulating programs that best suit the enterprises.
The productivity health-check will be made mandatory for applicants of
Governments incentives and assistance.
Fourth,

Undertaking

Biennial

Enterprise-Level

Productivity

Surveys. It is to assess and monitor productivity performance at the firm

level. This will provide the basis to identify gaps and review measures to
consistently enhance productivity to achieve set targets.

Fifth, Fostering a Productivity-Based Culture. Appropriate measures

will be introduced to foster a productivity based culture among
Malaysians, both at society and corporate levels. Greater awareness will
be created on the importance and benefits of productivity.
Other than the strategies laid down in Tenth Malaysia Plan, there are
other ways that government policies and approaches could improve the
nation labors productivity. In one way, According to Riley (2015), if the
government invest more on infrastructure of a nation, if could possible
increase the nation productivity in both public and private sectors. For
example, update or improve the communication technology and logistics
networks could speed the industry daily operation and at the same time
lower the cost in the business operation. Besides that, the government
should also improve the access to and quality of health care to reduce
sickness and absence which should increase output per worker. Other
than that, provide tax reduction for the industry that contributes more on
nation Gross Domestic Product (GDP) or the industry that increase the
usage of new technologies and energy efficient product. The government
should also increase the labor minimum wages to improve the citizen
living condition especially those with lower income and high liabilities
because there are proof of workers that being paid better wages improves
their work motivation and can increase their output per hour worked.
Finally, to help those in needs, the government should spend more in
providing housing and accommodation more affordable because it would
totally improve the labour cultural belief, so that they could transfer to
another industries in the urban areas instead of in rural areas.
In Malaysia, the Government Transformation Program (GTP) is an
idea by Datuk Seri Najib Tun Razak in January 2010 to ensure Malaysia
becoming one of the most developed country and high income per-capita
as per its Vision 2020. There were seven National Key Results Areas
(NKRA) issues that have been addressed and improved its condition to
ensure an increase in the nation productivity. The seven NKRAs was
Reducing Crime, Fighting Corruption, Improving Student Outcomes,

Raising Living Standards of Low-Income Households, Improving Rural Basic

Infrastructure, Improving Urban Public Transport and Addressing Cost Of
Living.
According to the Government Transformation Programme: The
Roadmap 2.0, under the Reducing Crime, the public satisfaction of the
polices performance rose from 35.8% to 55.8% in 2010 and 65.3% in
2011. The Global Peace Index ranked Malaysia the safest and most
peaceful country in Southeast Asia, 4th in Asia Pacific and 19th worldwide.
Under the Fighting Corruption, the government establishes a
compliance unit in key enforcement agencies to ensure proper conduct of
officers. Besides that, introduction of the Whistle blower Protection Act in
2010 as well as the development of the guidelines for implementation of
the Act. The government has also developed MyProcurement portal to
increase transparency in government procurement and confidence in the
government tender process.
To Improve Student Outcomes, 3,089 pre-school classes were rolled
out, enabling pre-schoolers ages 4+ and 5+ years old to begin early
education. In addition to that, 52 schools were recognized and rewarded
as High Performing Schools which helps motivate the teaches and student
to keep on maintaining and improving their school status.
In Raising Living Standards of Low-Income Households, 44,535
households were moved out of the extreme poor category representing
99.76% of the target identified, the number of poor households was
reduced by 15,868, 6,904 women entrepreneurs were trained, and 33,095
low-cost homes under Projek Perumahan Rakyat (PPR) and Perumahan
Awam (PA) under Dewan Bandaraya Kuala Lumpur (DBKL) were offered for
sale to its current tenants.
To Improve Rural Basic Infrastructure, by the end of 2012, some
3,147km of roads are expected to be completed, which will potentially
benefit 98.6% of Peninsular Malaysias rural population, 87% of Sabahs
rural population and 86% of Sarawaks rural population. Besides that,

310,742 houses will have access to clean or treated water and 93,712
houses will be connected to electricity grid, giving 24-hours access to
electricity.
In Improving Urban Public Transport, 35 four-car train sets were
introduced to the Kelana Jaya LRT line, increasing the daily passenger
capacity to 258,156 passengers from 254,745 in 2010. The improvement
of Puduraya Terminal transform into Pudu Sentral, the air-conditioned bus
terminal and the Integrated Transport Terminal Bandar Tasik Selatan (ITT
BTS) or Terminal Bersepadu Selatan.
Finally, Addressing the Rising Cost of Living, under the Bantuan Rakyat
1Malaysia (BR1M) initiative, RM2.6 million was distributed to households
earning RM3,000 and less, benefiting 5.2 million Malaysian households.
Besides that, the government school fees were abolished in 2012, making
public schooling free for the first time. Other than that, RM260 million in
Bantuan Buku 1Malaysia (BB1M) book vouchers was distributed to 1.3
million students in public and private local institutions of higher learning,
matriculation streams and Form 6. Lastly, klinik 1Malaysia, Kedai Rakyat
1Malaysia and Menu Rakyat 1Malaysia were established to provide
affordable medical treatment and necessities for the citizen.

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