Company Overview

Introduction

Cahya Mata Sarawak Berhad (CMS) founded in 1974 with headquarter based in Sarawak.
It is a leading infrastructure facilitator and prime mover in Sarawak growth story. It is also a
major private-sector player in Sarawak, the largest state in Malaysia. CMS is listed on the Main
Market of Bursa Malaysia, the Malaysian stock exchange since 1989. CMS comprises of more
than 35 companies across 7 business divisions with more than 2,300 employees nationwide.
CMS began its business with cement manufacturing. Over time, CMS had successfully
diversified into the manufacturing and trading of Cement and Construction Materials,
Construction, Road Maintenance, Township, Property and Infrastructure Development,
Education and Financial Services. Recently, CMS expanded its core capabilities as an
infrastructure facilitator by venturing into the telecommunications infrastructure arena
(SACOFA). As Sarawak moves into a new era of growth with the Sarawak Corridor of
Renewable Energy (SCORE), CMS expansion path too is moving into a new trajectory to take
advantage of the business investment opportunities in energy-intensive industries and their
infrastructure and related needs. Given the vast business potential within SCORE and throughout
the state of Sarawak, CMS is in an ideal position to leverage on its healthy balance sheet, local
knowledge, experienced management team and synergized portfolio of Sarawak-based
businesses to maximize its participation in the Sarawak growth story.

Vision

To be the PRIDE of Sarawak & Beyond

Mission

P Producing Quality, On Spec & On Time

R Respect & Integrity
I Improving, Innovating & Investing in People
D Delivering Sustainable Growth
E Environmentally Conscious, Safe & Conducive Workplace
Company Strategy

As the Group ventures forth, CMS continues to leverage on the strategic growth
initiatives which set out to secure sustainable business growth. CMS implements strategies under
Nine-Point Scorecard that have helped to maintain good growth momentum and stimulate
growth to ensure consistent and robust performance. These nine strategies dictate that CMS must
sustain solid and sustainable profits; uphold prudent financial policies to ensure a strong balance
sheet; and ensure an experienced and professional management team in steering CMS forward.
CMS also undertakes strong corporate governance measures to enhance ties and build respect
among the communities as well as to gain strong support from shareholders and bankers. Finally,
CMS aims to target on private sector-driven profitability, well-leverage on strong SCORE play
and thus develop for future use.

In 2012, ROAR V.2 Strategy was introduced following the success of the first ROAR
strategy that was introduced in late 2006. This continues to play a key role in ensuring CMS to
deliver a proven flow of sustainable profits from a portfolio of synergized businesses. ROAR
stands for Restructure, Organize, Advance and Roar. Meanwhile, in the case of ROAR V.2, it
sets out a set of challenging milestones and timelines for CMS to advance to even greater heights
based on their current strategies and strengths from 2012 through to 2016. The ROAR strategy
had brought new momentum to CMS. This new momentum revitalised CMS and as the Group
began to focus on its core competencies in Sarawak and Sarawak Corridor of Renewable Energy
(SCORE), our results began to improve and rest more securely on sustainable business growth.
This new strategy lays out a fresh set of challenging milestones and timelines for CMS to
advance to even greater heights for the period up to 2016.

Besides, CMS has set its sights on becoming an Extraordinary Organization to ensure
retaining the support of all stakeholders. There are four criteria which are needed to achieve the
target including demonstrating sustainable high performance, building up a unified workforce
where engaged employees outperform, working and are respected by multiple stakeholders and
ensuring CMS as the home to a Moral Community. The last criteria involves inculcating a
workplace environment with an abundance of moral values, loyalty, common purpose, empathy,
team spirit and a sense of fairness.
 While moving forward, CMS will leverage on several other proven elements to make
solid progress. These include tapping the good synergies between our core Business Divisions,
which are generating the bulk of the Group's revenue and earnings and are all set to grow in
tandem with Sarawak's own growth story. At the same time, CMS will maintain a diversified
earnings base to have a wider spread of income and profits aside from cement business. This will
also assist for significant risk reduction to the company.

Company Structure

CMS comprises of a portfolio with more 35 companies. CMS has structured its
operations into seven business divisions, six of which represent CMS core business divisions:
namely Cement, Construction Materials & Trading, Construction & Road Maintenance, Property
Development, Samalaju Development and Information & Communication Technology. The
seventh division, Strategic Investments, comprises of investments that CMS has a share in this
includes companies that are either associate companies (i.e. companies that are not managed by
CMS) or non-core businesses.
Size & Employee Characteristics

CMS consists of more than 2300 employees strategically spread across its seven business
divisions in specialized fields. The employees are characterized as hardworking, dedicated and
resilience. All of them had provided great contributions to the company especially amidst the
challenges from time to time. Guidance and counsel also are well provided by superior to all
employees in order to help steer CMS and all its subsidiaries in moving forward among the
opportunistic and challenging times.

Role of Human Resources Department

In CMS, role of Human Resources (HR) department act as the strategic partners to the
business. The primary responsibility of HR department is to keep the associated company staffed
appropriately at all times. This includes human capital planning, employee services / welfare,
learning and growth, policies and industrial relations and performance management.

HR department strive to recruit quality employees select the best for the available
positions and then develop policies that retain great workers. Retention policies include
providing adequate compensation, training programs and competitive benefits packages. When
an employee leaves, the human resources department conducts exit interviews to assess the
employee's reasons for leaving in order to create better retention policies.

Besides, HR department also keeps track of changes in state and federal employment
laws and applies them appropriately. These include tax regulations, health insurance
requirements, overtime laws, unemployment restrictions, family and medical leave policies and
safety regulations. Human resources employees develop and update employee handbooks and
official policy lists as necessary to comply with changes in the law. The department works for
the best interest of both the employees and the company, striving to create a safe workplace and
handling employee disputes as required.

Moreover, HR department also keep track on the Key Performance Indicators (KPI) in
which it is a method in which CMS used to measures the performance / productivity of their
work force. KPI is a process by which managers and employees work together to plan, monitor
and review an employee's work objectives and overall contribution to the organization.

Organization Chart of Group Human Resources Departments in CMS

In CMS, the HR department allocated their HR representatives in each division. Each HR

representatives are assigned to handle different task and different functions. The purpose is to
ensure that each and every division is able to be taking care of and to ensure all of the functions
are being practiced and is well planned.
Major Challenge Faced by Human Resources Department

The major challenge faced by CMS HR department is that of the perceptions of the staff
on how they foresee of the HR department and HR function. Staffs often think of that everything
or every decision makes is done by HR department but it is actually not. Besides, many workers
equate going to the HR department with going to the school principal's office in which
employees feel there's a parent-child relationship in the workplace, instead of adult-adult
relationship, and that nothing good can come out of a visit to the HR department.

Besides, HR supposed to be an accessibility department in which having an open door

policy and consists of a team of professionals or just one person, that open to hearing employee
concerns, quick to provide feedback and neutral when resolving conflicts. But, the accessibility
can be especially challenging as it can be hard to put personal feelings aside and not take things
to heart when an employee complains about how HR department operating the company.

Moreover, finding a suitable candidate for the job from a large number of applicants is a
challenge for HR department. They have to make suitable changes from time to time in the
selection procedure and see to it that the candidate is up to the mark fulfilling the job
requirements. They may have to screen through tonnes of applications and to just select few
suitable candidates for the recruitment and interview.

Furthermore, it is hard for the HR department to manage the discipline of the staff. The
company consist more than 2300 employees and there are just small amount of HR staff in the
company. Thus, it is hard for HR department to really take care of all of the staff discipline.
Besides, it is the human nature that some of the staff will have a lot of discipline problems that
needed to be solved by the HR department. Thus, it is hard for HR department to tackle all of the
discipline problem in the company.
Two (2) HRM Activities

i) Training (Learning and Growth)

Learning and growth is actually an investing in the human capital. This is to enhance the
quality of the workforce in terms of soft skills, technical skills and their knowledge. In CMS,
there are a lot of program that is being practice for the learning and growth. They have started
the Management Trainee Development program, in which it is a program that held for one year,
for the staff to actually experience the on the job training. Besides, they have the program of the
industrial training, talent management and the succession planning.

There are two types of training that practiced by HR department, the external training in
which the staff can enroll the course that organized by the organization outside the company and
the internal training, which known as in-house training in which HR department will hire the
speakers from outside to the company and conduct training for the staff in CMS. In-house
training sometimes is also conducted by the manager level and above in which they are more
experienced on the work area and to share with the staff their skills and knowledge. The process
of the external training and internal training is quite similar. First, the supervisor will have to
recommend their staff to attend some of the training to enhance their skills and knowledge.
During this stage, the staff and the supervisor will sit together to discuss on the training that they
are interested in. the supervisor will decide whether which kind / type of the training that will be
given to the staff. Second, the supervisor will need to check the availability of the budget
allocated. Supervisor would have to keep track of the spending in order to not overly used of the
budget. If the budget is allowed for the staff to attend the training, the staff would have to fill in
the training requisition form. The form is to be sent to the HR department for the process
and checking if all of the information needed is ready. Besides, the HR department will also have
to check the balance / availability of the budget for the division / department in order to have a
balance to pay for the training.

For the external training, the company required the staff who attended the training to
actually brief on their own department on what they learnt from the training that they attended.
For internal training, the staff would fill an evaluation form to evaluate and to give feedback on
what they learnt from the training. This is to give HR department an insight of the performance
of the speakers that they hire in and to evaluate on their performance.

Process and Procedure of Requisition of Training (Internal and External Training)

Recommendation of
training by
supervisor

Check of the
availability of the
budget in each
department /
division

Fill in the training

requisition form

Return the form to

HR department

Process of the
training form by HR
department

ii) Performance Management

Performance Management is a process by which managers and employees work together

to plan, monitor and review an employee's work objectives and overall contribution to the
organization. Key Performance Indicators (KPI) a measurable value that demonstrates how
effectively a company is achieving key business objectives. Organizations use KPIs at multiple
levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall
performance of the enterprise, while low-level KPIs may focus on processes in departments such
as sales, marketing or a call center. KPI is a method in which CMS adapt to measures the
performance / productivity of their work force. Different level of management will have different
requirement for their KPI. In CMS, KPI is set for the supervisor to achieve. Supervisor then
minor down the requirement / criteria that needed to be achieved and assigned it for the staff
during the beginning of the year as their KPI. Supervisor will sit together with the staff and
explain on what they need to do and achieve during the whole year. There are three stages for
every criteria of KPI that set for the staff, which is the higher stage is outstanding, medium is on
target and lower is threshold. All of the staff will need to achieve on target in which is the
medium stage in order to receive the award for the performance. In CMS, there are three
categories for the KPI, in which the first categories is the financial, followed by critical priorities
in which it reflects the job scope or task that needed to be done and the third categories is the
personal development in which every staff would have to achieve several man hours for the
Corporate Social Responsibilities and the numbers of days of training. In every requested time
frame, supervisor will have to review on the staff KPI and have a one to one session with the
staff to talk to them on the criteria that set for them and to remind them on the time left for them
to achieve minimum on target level.
Recommendation and Area of Improvements

For the learning and growth function, in which is the training, HR department in CMS
will need more commitment from the supervisor, in which that the supervisor will have to
identify what training that is relevant and will help the staff in their job scope. Supervisor will
have to identify what is the weakness of their staff, what training is suitable to improve the staff
weakness, does the training will really help the staff to overcome the weakness, does the training
relevant to the job specification of the staff and etc. Besides, the supervisor will have to have two
way communication in which the supervisor can sit down with the staff and communicate with
them on their required training and which of the training that they are interested to go. This will
help the supervisor to get know of what are the needs of training for the staff. With the help of
the supervisor, the training that conducted and in charged by the HR department will be more
meaningful and more successful in terms of helping the growth and learning of the staff in order
to help them in their job specification.

Besides that, HR department should provide more training on the productivity. This is
due to the main business of CMS is more to the productivity like cement, clinker, quarries,
premix and etc. The training now is more focus on the operations and services and this does not
benefits many employees. With the implementation of the productivity training, more staff will
gain benefits from the training, including for those are on-site staff which is on the production
site.

Moreover, HR department could set some rules regarding for the bonding of the staff
after they go through the training for a certain level or certain period. This is because there are
many resignations of the staff after theyve upgraded their skills with the training provided.
Therefore, the rules of bonding of the staff for a certain period are to ensure that the staff can
stay in the company and applied the skills that they learn in their job field before they can resign
off from their work. This is to ensure that the company and the other staff will learn and get back
the benefits after the training provided by the company to the staff.

For the performance management (KPI), HR department would have to find more
relevant KPI for the staff. This is due to that there are still improvements that can be made in
the selection / appointment for the KPI for staff. They need to identifying the priority of the
criteria that given to the staff, with the relevant and proper weighing for the criteria.

Besides, there is many staff and the managers are still did not understand on what is the
critical items in the KPI and the importance of KPI. Thus, more training and talk on the KPI can
be organized in order to give the staff and the managers know on how the KPI works and how to
set the critical criteria in the KPI that can be measured with relevant and proper weighing scale.

Moreover, the measurement of the criteria should be arrobas to be related to the

award. This is due to some of the KPI weighing and criteria cannot relate to the award that
should have given out to the staff. Example is that if the review of the KPI is done quarterly with
the award given, the weighing of the KPI must be that can be measured quarterly.
Literature Review

Globalization in recent years has created a more competitive environment for business to
compete. The rapidly changing economic environment which includes deregulation of markets,
changing customer needs and investor demands, intense competition has become the norm in
most organizations. In order to survive, continuous improvement in performance by innovation,
cost reduction, quality enhancement is very important. Human resource management and human
resource decisions play a very essential role in creating and sustaining company competitive
advantages and organizational performance. There is a growing body of evidence supporting the
relationship between performance and human resource management (HRM) practices.

Human resource management (HRM) refers to the policies, practices and systems that
influence employees behavior, attitudes and performance (De Cieri et al., 2008). According to
De Cieri et al (2008) and Dessler (2007), human resource practices include determining human
resource needs, recruiting, screening, training, rewarding, appraising and also attending to labor
relations, health and safety and fairness concerns. The effective implementation of HRM
practices in organizations is a key source of competitive advantage and has been shown to have a
positive relationship with company performance (Ordonez de Pablos and Lytras, 2008; Collins,
2007; Chew and Basu, 2005; Khandekar and Sharma, 2005). A few literatures HRM and
performance from both local and international are reviewed to analyze and identify the key gaps
in knowledge.

In Malaysia, human resource practices, systems and regulations are largely influenced by
the British colonization experience in the nineteenth century. It is viewed that HR practices are
legacies derived from an integration of Western and indigenous HR practices (Chew, 2005).
Malaysian HR practices are characterized into two mainstreams, namely British-oriented values
and ethics-oriented values (Hirano, 1991). When Malaysia gained its independence from Britain
(in 1957), the wider aspects of human resource practices were not given priority, as the main
focus was mainly on work simplification and methods for increasing output. This scenario
continued into 1970s, when employers still gave a low priority to personnel issues, with the
function often operating only as a sub-unit of General Affairs departments (Rowley and Abdul
Rahman, 2007). According to study by Haslina (2009), only a few HR practices was found
which include training and development, performance appraisal management, career planning
and development. Her research stated that the history of HRD in Malaysia is not clear due to a
lack of empirical evidence. However, clear evidence was seen when Government of Malaysia
began to include HRD strategies in the countrys development plans and policies in 1991 in the
Second Outline Perspective Plan and the 6th Malaysian Plan. This was also mentioned by
Rowley and Abdul Rahman (2007), who reported that in the 1990s, some management and
organizations began to reassess their corporate philosophy in favor of regarding people not as
costs but as assets. This change is indeed a big step forward towards HRM.

In the USA, attention has been paid more on classifying types of HR strategy, often
drawing on existing models of corporate strategy. According to Miles and Snow (1984), building
on their earlier work on strategy and structure, they propose that each of their strategic types of
firm will need to adopt a different set of HRM policies and they are reasonably precise about
some of the variations. The hypothesis is that those firms that have a fit between business
strategy, structure and HRM policy and practice will have superior performance. A similar
rationale lies behind the work of Schuler and Jackson (1987) which outlines three HRM
strategies linked to Porters (1980) three general competitive strategies.

An attempt is done by Guest (1987) to apply normative approach within a coherent

framework by specifying some of the links so that the resulting model can at least be tested and
possibly refuted. The central hypothesis is that if an integrated set of HRM practices is applied
with a view to achieving the normative goals of high commitment to the organization plus high
quality and flexibility, then higher worker performance will result. The assumption is that this
will have a positive impact on organizational performance. Normative perspective tends to argue
that specific HRM practices and goals will always be superior.

In research conducted by Arthur (1992), it is found that in general, commitment human

resource systems were characterized by higher levels of employee involvement in managerial
decisions, formal participation programs, training in group problem solving, and socializing
activities and by higher percentages of maintenance, or skilled, employees and average wage
rates. The existence of the control and commitment variations in organizations is generally
thought to be associated with certain organizational conditions. Most human resource strategy
researchers have taken a behavioral perspective (cf. Snell, 1992). Research using this perspective
rests on the often implicit assumption that the successful implementation of a business strategy
requires a unique set of employee behaviors and attitudes and that a unique set of human
resource policies and practices will elicit those behaviors and attitudes (Cappelli & Singh, 1992).

On the other hand, control theory researchers (e.g., Eisenhardt, 1985; Ouchi, 1979; Snell,
1992) claimed that the use of a control system depends on managers having a relatively complete
knowledge of the transformation process (inputs to outputs) and a high ability to effectively set
performance standards and measure employee outputs. These conditions enable employers to
directly monitor and reward employee behavior or the specific outcomes of that behavior. In the
absence of these conditions, an input is predicted, in which selection, training, and socialization
policies that try to align employees interest with those of the firms are emphasized.

The purpose of this assignment is to attempt to have better understand on the HR

practices. Information is collected by interview with HR manager and executive from Cahya
Mata Sarawak Berhad. It is hoped that through the interview, we will be able to develop a more
realistic picture of HR practices in one of the largest company in Sarawak.
Appendix

Interviewees
Name: Oliver Seli Name: Puli Ak Anyut
Position: Senior HR Executive Position: Senior HR Executive,
Learning & Growth
Contact No: 082-238 888 Contact No: 082-238 888