COMPANY BACKGROUND

Motosikal Dan Enjin Nasional Sdn. Bhd. (MODENAS) was incorporated in

August 1995 with the authorized capital of RM 200 million and the paid-up capital of

RM130 million. The total investment was RM400 million with the maximum plant

production capacity of 200 000 unit of bikes (3 shifts) per year. MODENAS was

established in tandem with Malaysia’s efforts to achieve industrialized nation’s status, in

line with Malaysia’s vision 2020.

Motosikal Dan Enjin Nasional Sdn. Bhd. - MODENAS - was established in

tandem with Malaysia's efforts to achieve industrialized nation status, now ubiquitously

known as Vision 2020. MODENAS spearheads the technology transfer and development

of motorcycle manufacturing, to eventually enable the country to proudly produce

indigenous motorcycles. Although the vision will not be realized within a short time

span, it is a strongly-held conviction that Malaysia will one day become one of the

formidable manufacturers of motorcycles for worldwide distribution.

Kawasaki Heavy Industries (KHI) is the technology partner of MODENAS.

Equity is shared by four parties - DRB-HICOM BERHAD (55%), KAWASAKI HEAVY

INDUSTRIES (19%), KHAZANAH NASIONAL BERHAD (15%) and SOJITZ

CORPORATION (Formerly Nissho Iwai Corporation, Japan) (11%).

With an investment of RM100 million, the MODENAS project was one of the

fastest completed projects in the DRB-HICOM stable of companies. Building

construction and infrastructure were completed in May 1996, within 9 months of the
ground-breaking ceremony in August 1995. In June 1996, the first pilot unit rolled off the

assembly facility.

The first 100 units of MODENAS motorcycles were then paraded in the 1996

Merdeka Day celebrations and the sales of MODENAS Kriss, the 4-stroke, 110 cc moped

began in November 1996. Hardly one year after sales commenced in the domestic

market, had MODENAS launched its product in the international market on October 17,

1997

MODENAS' achievements, from the first day the idea was mooted until the day

the first model was introduced to the local market and then to the international market,

were achieved through the sheer dedication and hard work of the management team and

all the staff of MODENAS.

MODENAS motorcycles are distributed by its wholly-owned subsidiary,

EDARAN MODENAS SDN. BHD. (EMOS)

To Be a Competitive World Class Motorcycle and Engine Manufacturer in The Asean

Region.

MISSION STATEMENTS

• Be a customer focused organization

• Offer high quality products

• Continuous skills and technology upgrading

• Care for the employees

• Continuous growth in profitability

• Establish MODENAS as a recognizable brand

VALUES

• INTEGRITY - practice ethical standards

• INNOVATION - creativity in challenging the norm

• TEAMWORK - together we achieve more

• EXCELLENCE - be the best

• CARE FOR THE ENVIRONMENT - for future generations

QUALITY POLICY

MODENAS is committed to provide products and services that consistently meet

customer’s satisfaction.
MILESTONE

• 1995- 7th February

Signing of MOU with technical partner.

• 1995- 12th August

Join venture Agreement and Ground Breaking ceremony by Dato’ Seri Dr.

Mahathir Mohamad, prime Minister.

• 1996- 4th June

First national motorcycle produced.

• 1996- 3rd October

Plant Launching by Dato’ Seri Dr. Mahathir Mohamad, prime Minister.

• 1997- 28th August

100 000th unit production celebration graced by DYMM Sultan Kedah.

• 1999- 19th July

Launching of MODENAS JAGUH officiated by Dato’ Seri Dr. Mahathir

Mohamad, prime Minister.

500 000th unit production celebration graced by Dato’ Seri Abdullah Hj. Ahmad

Badawi, Deputy Prime Minister.

• 2002- 3rd March

Launching of MODENAS KRISS SG officiated by Dato’ Seri Syed Razak Syed

Zain, Kedah Menteri Besar.

• 2002- 26th August

ISO 9002 Certificate Award & signing off Technical Agreement of scooter

project with Motive Power Industry Co. Ltd (MPI) by Dato’ Seri Rafidah Aziz.

• 2003- 16th January

Launching of MODENAS KARISMA and the introduction of new MODENAS

logo by Tan Sri Dato’ Haji Muhyiddin bin Haji Mohd Yassin.

• 2003-23rd August

Launching of MODENAS ELIT, CERIA, and DINAMIK by Dato’ Seri Dr.

Mahathir Mohamad, prime Minister.

• 2004-29th February

Launching of MODENAS ELEGAN by Tan Sri Salleh Sulong, Chairman DRB-

HICOM BERHAD.
• 2004-7th August

Launching of MODENAS KRISS 100 by Dato’ Abdul Ghani Othman, Johor

Menteri Besar.

• 2004-9th October

Launching of MODENAS KRISTAR by Datuk Ahmad Husni Mohamad

Hanadzlah, Deputy Minister of International Trade and Industry.

• 2005-27th August

Launching of MODENAS ELIT SPORT by Datuk Ahmad Husni Mohamad

Hanadzlah, Deputy Minister of International Trade and Industry.

• 2005-22nd December

Launching of MODENAS PASSION by Dato’ Haji Mahdzir Khalid, Acting

Menteri Besar Kedah Darul Aman.

i. History and progress of the department

In the middle of the year 1995, the first department of MODENAS was

established atGlenmarie, Shah Alam. This very first department was founded by

the MODENAS apprentice at that moment. They are five persons altogether and

they were assigned to choose and pick the best people from this industry to be in

the MODENAS management team by the DRB-HICOM. So, after about one and

a half year, they have come with a list to be in the MODENAS management team.

At first, the Human Resource Department only has two major sections which are

salary and administrative sections. After two and a half year, the Human Resource

Department has expanded their function by the training and the development and

admin and corporate affair which now are the most important parts of this

department. Under the admin and corporate affair, there are six sub-sections. They

are security, safety and health, corporate affair, landscape and escaping and lastly,

general admin.

ii. The importance of the Human Resource Development

The human resource department is very important and it plays a big role in this

company. It is because, without the HRD, all the internal businesses won’t be that

smooth on the fact that the entire employee’s information and all laws and

regulation in MODENAS will go through this department before it reaches other

department. In order to manage this department, the person in charge must be

expert or at least he or she knew about the HR educations. It is because; other

educations.

The first important function of the HRD is recruiting new employees. This

department has to go through all the forms and the interviews with the employees’

candidates by choosing the best person for one particular job based on

MODENAS requirements.

Next, the HRD also has the responsibility to provide the right channel for the

employees if they are having any problem or if their family members are on need,

such as emergency funds for the employees. Besides, this department will choose

the panel clinics for MODENAS. In case if the employees want are having

medical problems, they can get their treatment from the chosen clinics without

paying a single cent.

If the staffs are having any problems, got any suggestion and they want to voice

them out, the HRD will listen to them through the provided channels by the

department. Besides the entire above, if they are having discipline problems and if

they break any of the company’s laws, they will be judge in the internal court to

prove whether they are guilty or not. If the employees perform well in their job,

they will also get benefits from the company suggested by their superiors and the

HRD itself.

For the safety and health regulations in the company, the HRD are responsible to

provide all the staffs and paths needed in case if any emergency cases occur. This

department also provides all the safety rules in the company especially in the

production lines because the percentage of any accident will happen there are
higher. All the landscapes in the factory’s compound are also designed by the

HRD.

Last but not least, the HRD also conducts the training program for the workers.

Every year, each employee from each department should get their training for 16

hours. This training is compulsory for every member of MODENAS. This

training is for the workers to sharpen their skills beside they are exposed with new

equipment or any new requirements in their job. Every worker will get their own

schedule and the trainer will mark in the schedule after they have completed their

training.
2 b) HR MANAGER VIEWS ON:

i. HR perspectives

In a view of manager in Modenas, he says that department of human resources is

very important. They talk from their experience, because for two year before they

don’t have human resource department. It is very difficult for them to make a

work. Until today they don’t have manager to handle human resource department

because it is very difficult to seek somebody who can give a good performance.

So, now operating manager who takes a reasonability to control human resource

department. It makes a task of operating manager much difficult because he must

handle two works in a same time. Furthermore, human recourses is important for

all company because all information about employees, activities of planning,

recruitment, and selection, compensation and benefits and others was done by that

department. When have a problem in that department all process and activities

was disturb and not smoothly. This problem also gives impact for other

department. Beside that, all human perspectives must alert with any changes in

normal environments like a supply and demand any employees, changing in

technology, culture, changing in workforce and so on. Organization

ii. HR future

Parallel with country ' development today, interest on this area increasingly

widespread. if first his interest for this human resource management only to

recruitment, wage determination and others but on this day, his interest more
 apparent base problems rose in employment world today increasingly complicated

as internal problem discipline, staff welfare, rules, law, benefits and others. These

require to an efficient form of management to manage it.

Therefore, Modenas manager pointed out that human resources department should

upgrade their system as those they make now. Human resource department must

known and sensitive to new technology production. To further improve human

resources department efficiency this, design should master technology efficiently

because all wages and leave make through online system.

He also said that each human resources department in every company should

review strategy, present human resource management policy and practice on this

day to meet need and challenge in the new millennium. Manager of human

resource should give a more training or seminar for employees to train them when

something new change in environment. Manager cannot expect his employee will

self-taught when happen any department in the change stated.

iii. HR Critical Areas

In Modenas, HR managers’ views on human resource future & perspective

thinking of the high living cost in the country such as employees that working in

KL, Penang have low salaries that influences of high expense production.

On the company, actually employees ask to increase their salaries, meanwhile

firm’s condition can not increasing their salaries, because high living cost that

influence of high expense production and manufacturing costs.

Meanwhile, in the country’s condition that governed by government is the stable

hence production cost also stable, and the company can produce more goods and

services. And also company can increasing of salaries employees, but if do not

stable the company can not producing of the products and services more than is

usual or expected.

Hence, the company must minimum cost, so that the company can producing its

products and services and then the company can pay salaries employees. Modenas

has undergone many structural changes that present challenges for HR managers

and they continue to face such changes. Some of the structural changes are caused

by downsizing, meanings of the downsizing is Laying off large numbers of

managerial and other employees. So that HR managers can pay salaries for

employees.

iv. Current issues in HR and it relationship and the impact.

HR managers views on current issues in HR and it relationship and the impact in

Modenas that is the employees ask to increasing their salaries, they make the

protest about their salary to be increased, in the protest that they have been too

long to work but their salaries does not increase. Meanwhile in Modenas has

made a collective agreement to know agreement’s workers such as Modenas has a

clinic for employees and their families, safety and accident prevention received

far more attention than did employee health. Statistics show that occupational

disease may cost industry as much or more than occupational accidents. In

addition, there are many disease and health-related problems that are not
necessary job related but that may affect job performance. Many organizations

now not only attempt to remove health hazards from the workplace but also have

investigated programs to improve health. Meanwhile in clinic’s Modenas has

insurance for employees there is a medical, allowance, and award. Modenas give

for employees allowance and award so that employees more active to work.

Meanwhile, Modenas also make survey for employees about salary, workplace.

This is to be helping the employees to know their condition during work in

Modenas. Modenas have a union to have a leader from the top to bottom to

arrange and manage a team. Sometimes many employees feel stress was caused

by thinking why their salaries not increasing, stress is the mental and physical

condition that results from a perceived threat of danger and the pressure to

remove it. Now, HR managers on Modenas still think over about their salaries

employees because HR managers also still think over their company only have a

few customers that want to buy of the their products. An employee does not know

about it, they just to know about importance’s individual. Furthermore, Modenas

still give of the compensation for employees; compensation refers to all the

extrinsic rewards employees receive in exchange for their work, so that

employees more active with their work. Then, employees also given pay, pay

refers only to the actual cost employees receive in exchange for their work.

Usually compensation is composed of the base wage or salary, any incentives or

bonuses, and any benefits. The base wage or salary is the hourly, weekly, or

monthly, pay employees receive for their work. Meanings of incentives are

rewards offered in addition to the base wage or salary and are usually directly
related to performance. And then Modenas also give benefits for employees

which have good performance on the job, meanings of benefits are rewards

employees receive as a result of their employment and position with the

organization. Paid vacation, health insurance, and retirement plans are examples

of benefits.
CONCLUSION

3 a) OPINION ON THE HR DEPARTMENT

i. Function

I think all company have the HR department, and almost function of HR

department are similar. The function have a six major that is planning, recruitment

and selection, development, compensation and benefit, safety and health,

employee and labor relation and human resource research.

The activity planning, recruitment and selection of HR department is conducting

a job analysis to establish the specific recruitments of individual jobs within the

organization. Besides that, the activity is selecting and hiring human resource to

fill specific jobs within the organization.

The activity human resource development is orienting and training employees and

designing and implementing management and organizational development

program. Function compensation and benefit activity is designing and

implementing compensation and benefit systems for all employees. Furthermore

the activity is ensuring that compensation and benefits are fair and consistent.

Safety and healthy function also responsibility to designing and implementing

programs to ensure employee health and safety, that also providing assistance to

employees with personal problem that influence their work performance. Another

one function this department is employee and labor relation. The activity is
 become an intermediary between employer and union. Have a problem and

defiance from workers, so this department responsibility to overcome and solve

the problem.

Another function is human resource research. The activity is providing a human

resource information base and implementing employee communication system.

ii. Strength

For overview opinion on the human resource deparment, the strength of

MODENAS Company is, this department very appreciates to their workers, and

takes a right approach to develop his company. As an example this department

passes their employees to overseas to get more education and experience. This

way is good because his employee can get skills and diverse expertise to make

their company better. Employee will contribute the new skill to develop this

company. But to avoid their employee to left company after company pass they to

overseas, HR department already make a contract. After the workers back from

training at overseas, they need to work one year after that. This way to avoid

company lost.

Besides that, HR department also make a cooperation with others automobile

company to get more information. With the cooperation also, MODENAS can

compare his product with others company. This can be strength because not all

company does like this. I think one another strength to HR department of

ensure line not empty, the training will do follow it turn.

Furthermore, I think the strength HR department is making a team building.

Greatly, most the program not does in production but company do it outdoor. To

employee feel more enjoy and get experience. As example MODENAS Company

already make this program at Pulau Jerejak and Pedu several past years. In thus

program, the activity is learning how to make a better presentation and how to get

soft skills, beside sport activity. The reason because company wants their

employee will feel love to company and never to left to get another job.

iii. Weaknesses

The department has problems which they forced to facing with the regulatory

changes which government regulation and laws has put the burden on the human

resource manager that is reflect with environment and quality of work life.

The other problem is political changes which the government in a country was

increased cost of living. This will impact the company which human resource

manager forced to redesign the employee’s wages, and bonuses so that they can

feel comfortable with their life and the employees’ need will be satisfy. Company

does not have control in this problem and this makes company become

uncertainty.

In the other hand, there have human resource issues that are bought to court

because of the lawsuits involving employment practices. And the employee that
 involved hardly does not want to settle the problem in the inside court. This is

indirectly hurt the company’s image

iv. Suggestion

Establish the good job analysis that provides the information that virtually every

human resources activity requires. It assists with the essential HR programs such

as recruitment, training, selection, appraisal, and rewards systems. It may also

help the company defend themselves in lawsuits involving employment practices.

For example, clearly specifying what a job requires if someone claims unfair

dismissal.

The other suggestion in settle the bureaucratic system is the HR department also

can establish or upgrade the system such as allowed the employees to on line in

term salaries payment, or create the human resource information base as reference

or facility to employees so that the company operation will become easier.

Besides that, the authority to control tasks may delegate to manager at all level in

the company.

Besides that, the company also cans learning what are the successful company in

the same industry such as HICOM, HONDA and NAZA are forecasting and how

they are arriving at their forecasts. Then, the company also can compare their

forecasts and methods with the successful company. The company also can ask

consultants and professional organizations such as associations or employ them.

Here, HR professionals can look at the other ways of doing things.

Because of the sale’s company is not stable, company sometimes facing with the

pay salaries or wages to their employees, company can create the strategic which
the company can pay the employees with the advance salaries. And if the

company gets profit from sales, the company will assume the advance salaries

that already paid as bonuses to their employees. So, for the employees’ salaries

future is still same that is not deducting.

In the other hand, the company also can identify the employee that have potential

or talent for advancement and send the employee for sharpen their talent so that

company can create the professional future. The company can send their

employee to Japan to learn about the Japan’s car which we know that Japan car is

one of the successful companies in markets.

Company also must focusing on how a job is done usually uncovers any unsafe

procedures, obey the payment, and treatment of employees, workers’ health and

other social and economic issues to avoid punishment from the government that

will taking legal action against it.

One of the best ways to encourage the good relationship between manager and

organizational staff is based on a close working relationship between them.

Human resource manager as a consultant in the company has a responsibility to

ensure the line managers have responsibility to respond to the business

implication of human resource objective and strategic. Human resource manager

also can take to link human resource planning to the organization’s strategic

plans.
3 b) OTHER RELATED ISSUES OR OPINION

i. Journals

• Chew, Y. T. (2005). Achieving Organisational Prosperity through Employee

Motivation and Retention: A Comparative Study of Strategic HRM Practices in

Malaysian Institutions, Research and Practice in Human Resource Management,

13(2), 87-104.

“A growing concern among companies operating in the Malaysian labor

market with high job mobility is how to maintain a workforce capable of

fulfilling corporate exigencies.”

• Nelson, L. (2005). Managing the Human Resources in Organisational Change: A

Case Study, Research and Practice in Human Resource Management, 13(1), 55-

70.

“A continuing issue in managing change is minimizing resistance and

engaging with employees at all levels.”

• Iles, P., Yolles, M. & Altman, Y. (2001). HRM and Knowledge Management:

Responding to the Challenge, Research and Practice in Human Resource

Management, 9(1), 3-33.

“Knowledge is increasingly claimed to be a key critical resource and

source of competitive advantage in the modern global economy,

number of ‘knowledge workers’, the increasingly rapid flow of global

information, and the growing recognition of the importance of

intellectual capital and intellectual property rights.”

• Tzafrir, S. S. & Gur, A. B. A. (2007). HRM Practices and Perceived Service

Quality: The Role of Trust as a Mediator, Research and Practice in Human

Resource Management, 15(2), 1-20.

“The value of linkage research is in its ability to recognise the

organisational practices that are the most important drivers of

customer satisfaction in a specific organisation. Human Resources

Management (HRM) plays a central role in the exchange relationships

between the organisation’s management and its employees.”

• MODENAS TURUT SERTA DALAM KEMPEN KESELAMATAN

JALANRAYA

31/1/2008

MODENAS telah turut serta di dalam Kempen Keselamatan Jalanraya Bersama

Masyarakat Setempat anjuran Majlis Keselamatan Jalanraya (MKJR) dan

LAFARGE Cement Malaysia, bertempat di Dataran Pasar Awam, Padang Lalang,

Langkawi. Majlis ini telah dirasmikan oleh Datuk Suret Singh iaitu Ketua

Pengarah Jabatan Keselamatan Jalanraya Malaysia, Kementerian Pengangkutan

Malaysia.

• MODENAS KRISS 120 SPORTS LAUNCHED

17/12/2007

MOTOSIKAL dan Enjin Nasional Sdn Bhd (Modenas), a 55 per cent subsidiary

of DRB-HICOM Bhd, has launched two new motorcycles to boost earnings and

counter competition from Japanese and Chinese rivals. The two models are the

Modenas Kriss 120 Sports (electronic starter) and the Kriss 100 (kickstarter)

priced at RM4, 450 and RM3,150 respectively. Modenas chief executive officer

Abdul Harith Abdullah targets to sell 7,000 units a month of the models and

improve its overall national market share to 13 per cent from 10 per cent last

month. "Together with our six other Modenas models already in the market, we

target an overall sales of 70,000 units for financial year ending March 2008, of

which 10,000 are for the export market," Abdul Harith said at the launch of the

motorcycle at DRB-HICOM's headquarters in Selangor yesterday.