HUMAN RESOURCE MANAGEMENT FROM ISLAMIC PERSPECTIVE:

EXPERIENCES OF GLCs
Idris Bin Osman1a, Mohd Halim Bin Mahphoth2b and
Maryam Jameelah Binti Mohd Hashim3c
123
Universiti Teknologi MARA (UiTM), Kampus Bandaraya Melaka, 110 Off Jalan Hang Tuah,
75300, Melaka, Malaysia
a
idris424@melaka.uitm.edu.my
b
mohdhalim282@bdrmelaka.uitm.edu.my, cjamieniz@melaka.uitm.edu.my

Abstract

From the Islamic perspective, managing human resource meets various challenges, especially in
the modern organisations. The adoption of Western practices in various aspects of management
have caused gaps in justice, trustworthy, responsibility and other values of workers in Muslim
countries. Thus, the interference of Islamic principles in human resource management (HRM) can
be considered as a great solution for treating employees fairly and justly. This research aims to
examine the level of Islamic practices in HRM, in which includes recruitment and selection, training
and development, career development, performance management and rewards. The paper will
analyse the relationships between HRM practices and organisational justice which focus on three
elements, which are distributive justice, procedure justice and interactional justice. The data will be
collected from selected Malaysian Government-Linked Company (GLC). Convenience sampling
will be used to select the respondents for completing questionnaires. This conceptual paper
essentially provides organisations with effective ways of understanding and implementing HRM by
using Islamic principles. It also can be used as guidance for decision making and day-to-day HR
activities and will help organisation to face uncertainties in the business world as well.

Keywords: Human Resource Management, Organisational Justice, Islam

Introduction
Muslims in developing nations faced the greatest challenge where globalization becomes a threat
that must be executed with development (Dr. Mahathir, 2000). Globalisation has influenced local
employees to adapt Western management and this issue increasingly resulted inconsistency of
aspects, religion and business practices (Abbas J. Ali, 2010). Khan et al (2010), Metcalfe (2007),
Tayeb (1997) and Abuznaid (2006) believe religion plays important and significant roles for
organisations to gain competitiveness. Nik Mutasim (2009) and Khan et al (2010) found the
positive relationship between Islamic principles and human resource management. Junaidah (2010)
added is an obligation for organisations to practice Islamic principles to manage human resource.
Islamic HRM have concerned the justice and fairness (Abulhassan, 2006). According Junaidah
(2008), managing human resource in Islamic approaches does influence organisational justices.
Islam a complete religion of life and objectively create the universe to uphold justice and truth
(Mahathir, 2000). The verse 85 of the Surah Al-Hijr (15) in the Quran says: “We created not the
heavens, the earth and all between them, but for just ends”. In the Verse 38-39 in the Surah Ad-
Dukhaan (44) which says: “We created not the heavens, the earth and all between them, merely in
(idle) sport. We created them not except for just ends, but most of them do not understand”.

Organisational justice is very important and its represent employee’s perception about the fair
treatment in organisations (Murtaza et al, 2011; Prof. Dr. Muhammad Ehsan Malik et al, 2011).
According to Guest (1997) and Purcell et al (2003), employee’s outcome creates significant
relationship between human resource management and performance. Thus, HRM practices must be
conducted fairly and unbiased manner and justice must be considered as a main factor influencing
human resource effectiveness.
Islam has significant effects, not only on economic and political organisations but also on human
relationships (Metcalfe, 2007). Nik Mutazim (2008) said the Islamic principles should be common
to all basic functions of human resource management to achieve excellent results in organisation.
However, the limited literatures in Islamic Management have witnessed the increasing interest to
explore its application. The gaps of understanding and applying the Islamic principles in managing
human resource have caused the widely adoption of Western practices in daily business activities.
Junaidah (2009), Branine (2010), Budhwar et al (2006) and Tayeb (1997) agreed the important of
managing human resource in Islamic management but very limited empirical studies have
examined. Kamel Mellahi et al (2010) recommended much more research is needed to gain the
understanding the roles of Islam, especially related to HRM issues.

Junaidah (2008) witnessed the positive effects of organisational justice in managing human resource
from Islamic approach. In the limited research of organisational justice and HRM, she suggested
more attention should be given on human resource functions, such as selection, performance
appraisal and compensation which always resulted to injustice perceived by the employees. Nik
Mutazim et all (2010) stressed the Islamic HRM must be embedded in HRM actitives starting from
selection to career development in Islamic organizations. This paper will essentially close the gaps
of injustice practices in human resource management activities to answer below objectives:
a. To analyse the level of human resource management practices from Islamic perspective
b. To analyse the relationship between Islamic human resource management practices and
organisational justice

Literature Review
Human resource management (HRM) is the process of managing human to achieve the
organisation’s objectives. HRM is a process of acquisition, development, motivation and
maintenance human resource. John et al (2008) agreed to achieve and sustain good performance,
HRM activities should be implemented in an environment of employee’s involvement. In short,
HRM is an important process to manage human capital for organisation effectiveness. Managing
human resource meets various challenges. Yeganeh & Su (2008) have identified challenges that
shaped HR practices which include culture, legal system, technology, organisational structure and
size. Katou et al (2010) found the policies affecting sex discrimination, selection of employees,
distributions of profits and job advancement may influenced by religious factor. An Islamic
principle has effects the management in organizations. The significant findings from past researches
have proved the Islamic principle does influence the organisational effectiveness. Junaidah (2008),
Ilhaamie (2010), Ali and Al-Kazemi (2007), Junaidah (2010) and Zangoueinezhed, A. et al (2011)
witnessed the significant relationship.

Human Resource Management from Islamic perspective

Recruitment is the process to select the potential candidates for organisations to leverage
competitive advantage. In Islam, choosing the right person effects trust and loyalty to organizations.
If employees have been chosen based on favoritism and not due to his capabilities, there will tend to
feel mistrust and disloyalty. Al-Quran has provided a very simple but yet very relevant criteria to be
used for the selection for the best applicants. In surah Al-Qasas, Verse 26, Prophet Moses who met
Syu’aib, whose daugther said to him: “O my (dear) father! Engage him on wages truly the best of
men for you to employ is the (man) is strong and trusty”. Al-Qur’an also refers to another set of
criteria that is the attitude of accountability and the required skills to handle a particular job. The
verse in Surah Yusuf (12): “Set me over the store-houses of the land, I will indeed guard them, as
one that knows”. According to Junaidah (2008), to ensure the right person is selected, Islamic
approach should be considered to choose the best characteristics of a candidate. There are trust
(amanah) and responsibility, motivation, seeking knowledge and training, and seeking excellent.
For trust, a candidate must be trustful and responsible. Allah said “Every man is pledge for what
which he hath earned”. For seeking someone excellence, Islam encourages person to work in team
to seek perfection and excellent. Allah in the verse of Al-Quran said “…if ye good for your own
souls, and if ye do evil, it is for them (in like manner)” “and ye (mankind) perform no act, but We
are wirness of you when ye are engaged therein”. Prophet Muhammad (S.W.T) said “Allah likes
that when someone does anything, it must be done perfectly well”.

Training is a process to provide opportunity for individual to acquire knowledge, develop skills and
capability necesaasry to perform their job and to fulfill organisation needs. In Islam, all employees
are required to acquire Islamic knowledge and based on their profession to raise the quality. The
professional skills will increase employee’s productivity suitable for their salary. Seeking
knowledge and pursuing education are greatly emphasized in Islam. The verse in Qur’an says
“Those truly fear God among His servants who have knowledge”. The Prophet Muhammad (S.A.W)
also declared it compulsory for Muslims to acquire knowledge when he said “Seeking knowledge is
a duty on every Muslim man and woman”. Training and development also need to raise motivation
among employees. Religious teaching can play a great spiritual motivation role. Thera are ample
Islamic teaching that encourage Muslims to be productive. The verse in Surah Al-Baqarah (2) “And
of them (also) is who saith: Our Lord! Give unto us in the world that which is good and in the
hereafter that which is good and Guard us from the doom of fire”.

According to Alhabshi et al (1994), career development is good where organization continues to

make an investment to their employees. They added the development process leads to employee’s
career path. This process is a formal through seminars, workshop, short and long cources. The
combination of personal and organisational career development must be continued to achieve an
ideal human development for excellent results. According to Junaidah (2007), career development is
continuing process for employees to plan and create their future to help them achieve their goals.
She added the purpose of career development is develop employee’s current performance, to take
advantage of future job opportunities and to realize their employer’s goals foa a dynamic and
effective workforce. The successful of career development must be identified from individual
employees level which are assessing individual’s abilities, interest and career goals, assessing
individual’s abilities and potential by organizations, communicating the career options and
opportunity within in organisations and career counseling.

Performance management is a process of ensuring the employees’ activities and outputs contribute
to the organisation’s goals (Noe et al, 2009). In the research paper of Yeganeh et al (2008), they
found a little attention paid to appraisal in Iranian public organisations and the system of top-down
was based on subjective judgmental which more concerned to personal behavior rather to push on
performance evaluation. Junaidah (2007) said, measuring employee’s performance must consider
justice and fairness, accountability and responsibility. According to her, HR Manager need to be just
and perceived just by employees. Allah has mentioned in Surah An-Nahl (16:90): “Allah commands
justice, the doing of good and liberty to kith and kin and He forbids all shameful deeds and
injustice. He instructs you, that ye may receive admonition”. Abulhasan (2006) said the sense of
responsibility and accountability must be considered with Islamic teachings where work means to
attain Allah’s pleasure. HR Manager need to be accountable person in response to his decision and
action. In the verse of Surah Al-Zalzalah (35:7-8), Allah said “Then shall everyone who has done an
atom’s weight of good, see it. And anyone who has done an atom’s weight of evil, shall see it”.

Reward is a desirable outcome resulted from a desirable behavior while punishment is the
undesirable outcome that follows an unwanted behavior. Junaidah (2009) said the purpose of
compensation, whether direct or indirect, is to recognise the value of performance of employees and
to establish the ways to motivate them. The reason of rewards is to recognise the good performance
to encourage workhard of employees. Allah said in the verse of Surah Al-Khaf (18:30) “We never
waste the reward of anyone who did good”. Prophet Muhammad (S.W.T) said “Whoever puts an
effort and succeeds gets two newlands and whoever puts an effort and does not succeec gets one
reward”. Chiu et al (2002) and Nik Mutazim et al (2008) found a positive relationship between
compensation and rewards on organizational outcomes. Reasonable, competitive and fair
compensation system must be well developed to promote positive commitment. Nik Mohamed
Affandi (2002) said, one of the aspects of fairness is the salary. In Islam, salary is not just on
employee’s contributions but more important on his basis needs. Employers are required to pay his
employees with sufficient wage. Prophet Muhammad (S.A.W) said “It is most important for you to
provide food and clothing to your assistants”.

Islamic human resource management and organisational justice

Islam against any practices of injustice and it has been clearly revealed by Allah. In the verse 29,
Surah Al-A’raf, Allah says “Say: My Lord hath commended justice and that ye set your whole selves
(to Him) at every time and place of prayer and call upon Him making your devotion sincere as in
His sight: such as He created you in the beginning so shall you”. Justice is required to be
established in Islam and universally applies in all field of human resource activities in
organisations. It is an a person obligations to establish and uphold the absolute justice as a part of
taqwa (deed) and iman (faith). Organisational justice is the employee’s perception of fairness in an
organization. Greenberg (1990) defined organisatonal justice as employee’s perception on justice
and equality in organisations. Greenberg and Baron (2003) found organisational justice consists of
employee’s perception toward distribution of outcome and perceived fairness. Procedural justice
refers to the perception of employees on fairness of decision making in organisation. According to
Nabatchi & Bingham (2007), procedural justice important to project the best satisfaction of
employees from the official decision making policies. Interactional justice refers to interpersonal
treatment received by an individual employee (Folger and Cropanzano, 1998).

Junaidah (2008) explored “Quran-based human resource management and its effects on
organisational justice, job satisfaction and turnover intention” suggested an Islamic human resource
management must be practiced by all Muslim organisations. She said more attention should be
given on human resource management practices such as selection, performance appraisal and
competition which contributes injustice perception of employees. Dzansi & Dzansi (2010) explored
the organisational justice approach on human resource management practices found significant.
Less transparency in political inteferences will increase employee’s perceptions on human resource
management practices and directly improved their commitment. Murtaza, et al (2011) and
Frarndale, E. et al (2010) found promotions and increments of employees must be given to deserved
employees without discrimination or bias. Distributive justice should be improved to allocate
resources, performance rewards, pay and promotion.

Other research papers examined organisational justice and human resource management outcomes.
Folger and Cropanzano (1998) suggest the justice must be concentrated to management of
employee benefits, training and employee’s development. Casas, A. L. (2007) revealed
organisational justice perceptions on human resource management related to fair policies and
procedures. The implementation of organisational justice will help organisations to select and train
human resource professional to enhance fairness. As to build interactional justice, the roles of
appraisors and appraisees must be separated. The appraisees must be feel free to express their
emotions and encourge them to give input in interview session. Correlations between interactional
justice and supervior supports will increase employee’s satisfaction.

Theoritical Framework
The literatures have shown the significant relationship between Islamic human resource
management practices and organisational justice. The theoretical framework below shows the
relationships among the variables.

Al-Qur’an & Hadith

HUMAN RESOURCE ORGANISATIONAL JUSTICE

MANAGEMENT
Recruitment & Selection Distributive Justice
Training & Development Procedure Justice
Career Development
Interactional Justice
Performance Management

Rewards

Independent Variables Dependent Variables

Figure 1.0 : Theoretical Framework

Adapted and adjusted from Junaidah (2007)“Human Resource Management: Islamic Approach“

Methodology
Data will be collected from selected Malaysian Government-Linked Company (GLCs). This paper
will cooperate with company’s representatives, where the targeted respondents are from the Human
Resource Department. The developed questionnaire from Ilhaamie (2010) will be used to analyse
the level of Islamic human resource management and its relationship with organisational justice.
The questionnaire contains 3 sections, which are the background of respondents, Islamic human
resource management and organisational justice. Islamic human resource management practices
will address to five functions, which are recruitment and selection, training and development, career
development, performance management and rewards while organisational justice refers to
distributive justice, procedure justice and interactional justice. Respondent from each company will
answer the statement based on 5-points Likert Scale (1-Strongly Disagree, 2-Disagree, 3-Neutral, 4-
Agree, 5-Strongly Agree). Descriptive analysis will be conducted on the data gained from
completed questionnaire in order to analyse the relationship between Islamic human resource
management and organisational justice. Findings will be measured through reliability test by
examine the level of Cronbach Alpha for each variable. Then, correlation and multiple regression
analysis will be used to identify relationships among variables.

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