THE INFLUENCE OF TOTAL REWARD STRATEGIES AND JOB SATISFACTION ON THE RETENTION OF GENERATION Z ENGINEERS IN THE MANUFACTURING SECTOR OF BAYAN LEPAS, PENANG: AN EMPIRICAL STUDY

Abstract

The high turnover associated with motivation among the engineers of Generation Z is a major issue to the manufacturing industry in Malaysia especially in Bayan Lepas, Penang. In spite of Total Reward Strategies (TRS) being in place, the rate of employee retention is low. In this study, the influence of TRS and Job Satisfaction on the retention of Generation Z engineers have been addressed, with a focus on whether Job Satisfaction mediates the relationship between TRS and Retention. A quantitative research design was utilized with questionnaires developed in a structured manner and distributed to 100 engineers aged between 21-28 years, working in manufacturing companies in Bayan Lepas. Data were analysed using correlation, multiple regression, and mediation analysis using the SPSS. The results revealed that both Job Satisfaction and TRS are significant predictors of Employee Retention, with Job Satisfaction being the stronger and effective predictor. The Mediation analysis goes further and demonstrates that Job Satisfaction partially mediates the relationship between TRS and Retention. These findings are in support of Social Exchange Theory, which emphasizes that organizations must provide both financial and psychological rewards in order to increase retention. The study contributes to the theory of HRM and provides practical implications for improving retention strategies in manufacturing sector in Malaysia.