Islam Hadhari’s Principles and Reward Management Practices: A Conceptual Study in Malaysian Private Organizations

Many best practice models exist that describe successful approaches to reward management which influence by the cultural, legal, organizational and administrative challenges in Islamic world. Thus, the decision in setting and designing reward programs in raising productivity through human effort has always been controversial. Studies that were undertaken in numerous countries have shown varying degrees of success of such practices. Even though there is a substantial amount of foreign literature on this subject, there is a paucity of information concerning the extent of such application in Malaysia. As Malaysia is a predominantly Muslim country, Islam, through national culture influences organizations. This paper is an attempt to provide further insights into the theory and practice of reward management in the local context as Malaysia is implementing Islam Hadhari’s principles in the country. The study adopts a qualitative approach. A tentative research model is developed first, based on an extensive literature review. The qualitative field study then is carried out to explore the perceptions of reward management in the Malaysian private organizations from the Islamic perspective.  Twelve Malaysian private organizations of various sizes are studied via interviews with key personnel. The paper will also contribute theoretically and practically by providing direction and suggestions in designing and implementing the reward programs for the private organizations in the Malaysian environment. KEYWORDS: Reward management, Islam Hadhari, Culture