1.0 Introduction

Labour market is a key issue for many developing as well as developed countries. Whether the people are skilled or unskilled is determining factor for the inflow of foreign direct investment (FDIs) to many developing nations. So, Malaysia depended on its abundant supply of literate and trainable labour force to attract investments in the export-oriented electronics industry since the early 70s’. This labour force has gone through skilled upgrading and enhancement in the past three decades and today, Malaysia can boast of having a pool of relatively skilled and professional labour force that is capable of handling and developing state-of-the-art technologies.

Despite these accomplishments, human labour which was and …show more content…

Therefore, the Government will take initiatives to encourage firms to intensify the implementation of the productivity-linked wage system (PLWS) to ensure that wage movements are closely aligned with productivity. But the firms have to meet some challenges during implementation, companies are aware that PLWS is important for enhancing competitiveness. However, to ensure smooth transition of the system, there must be a strong commitment and cooperation from top management and employees. Information sharing of relevant information pertaining to the system by management is necessary to ensure the system works (Economic Report, 2004/2005). And also it should be a fair and equitable performance measurement system. The system is able to be reviewed periodically and improvements made when necessary (Economic Report, 2004/2005). Thus, if the companies implement the PLWS, the measurement system and the key indicators to be used should be collectively developed by both employers and employees and agreed upon by both parties (Economic Report, 2004/2005). 2.2.3 Employment Restructuring

As the implementation of strategies and programmes to restructure employment in the various sectors