THE INFLUENCE OF HUMAN RESOURCE MANAGEMENT PRACTICES AND CAREER STRATEGY ON CAREER SATISFACTION OF INSURANCE AGENTS

ABSTRACTThis paper examined individual perceptions of organizational human resource management (HRM) practices and career strategies that influence career satisfaction. This study also proposed that career strategy would mediate the relationship between HRM practices and career satisfaction. Data was gathered through questionnaires from insurance agents (n = 531) located in the Northern States of Peninsular Malaysia. Hierarchical multiple regression analysis revealed that HRM practices (training and development, and compensation) and career strategy were positively correlated to career satisfaction. Results also provided partial support for the mediating role of career strategy on the relationship between HRM practices (training and development, and compensation) and career satisfaction. The findings of this study have the potential to provide ideas to the examined insurance companies in order for them to assert more efforts to improve the availability and effectiveness of their training and development programs, and design more attractive compensation packages for their employees.Keywords: Compensation, Performance Appraisal, Training and Development, Career Strategy, Career Satisfaction1. INTRODUCTIONFollowing the worldwide financial crisis and greater competitiveness of global business, most of the organizations in Malaysia are constantly engaged in major work force reductions in an attempt to cut down the costs of human capital and become more competitive in the business world. Simonetti (1999) stated that strategic downsizing, especially cutting labor costs, is a common action that would be implemented by the organizations facing the trauma of economic downturn, since this action could assist organizations in increasing profitability in the short term. Although this action is effective in increasing an organization's financial performance, it is very difficult to uphold employees' career satisfaction. Once organizations reduce jobs, decrease the amount of compensation, restrict the funds to be invested in training and development programs and other human resource management activities, employees may descend into states of negative emotion such as dissatisfaction, depression, and hopelessness because they are losing their benefits, which in turn can entirely jeopardize their career achievement. Employees thus need to take initiatives and explore ways to better manage their career, rather than to rely on organizational support because of limited organizational resources. Hence, adopting prudent strategies such as networking and seeking for career guidance are employees' primary actions since these strategies provide a platform for employees to obtain useful information and resources for developmental purposes.However, to date, there has been little empirical attention in examining the link between HRM practices and employees career strategies for success. There is a gap in the literature since previous studies have focused exclusively on job-related factors such as job security, career prospects, fairness and flexible work (Armstrong-Stassen & Cameron, 2005; Counsell, 1996; Eddleston, Baldridge & Veiga, 2004; Mayrhofer, Meyer, Iellatchitch & Schiffinger, 2004; Nabi, 1999; 2001; 2003) as predictors influencing employee career satisfaction. Individual perceptions of the organizational-related factors, particularly HRM practices (such as compensation, performance appraisal, and training and development) have received less attention. Furthermore, some of the researchers (Behery & Paton, 2008; Carlson, Upton & Seaman, 2006; Chang & Chen, 2002; Corley, 2005; Delaney & Huselid, 1996) were more likely to correlate HRM practices with organizational performance rather than individual career outcome. Besides, the studies (Armstrong-Stassen & Cameron, 2005; Poon, 2004) that linked HRM practices to career satisfaction only focused on the direct relationship by not testing any mediating hypotheses, and were also limited to certain samples, such as administrative and technical staff in the public sector (Gould & Penley, 1984; Nabi, 2003); university post-graduate students (Lau & Pang, 2000; Mayrhofer, Meyer, Schiffinger & Schmidt, 2008; Poon, 2004); managers of manufacturing companies (Tu, Forret & Sullivan, 2006); and managerial staff of financial institutions (Burke, Koyuncu & Fiksenbaum, 2006; Van Emmerik, Euwerna, Geschiere & Schouten, 2006). …