Malaysian HR practices, systems, and regulations are largely influenced by the British colonisation experience of the nineteenth century.

It is commonly viewed that HR practices of Malaysia are the artefacts derived from an integration of Western and indigenous HR practices. Hirano (1991) categorised Malaysian HR practices into two mainstreams, namely British oriented values and ethnic oriented values (e.g., Malay, Chinese and Indian values). It is found that companies were managed either in more of the British or the indigenous way. Other research describes Malaysians as being money oriented and inclined to job hop, with little hesitation for better financial offers (Kawabe 1991). This tendency is traced back to the previous proactive introduction of Western management and education systems. In addition, the increased convergence of work related values and the expectations of Malaysian overseas graduates quicken the absorption of new Western ideas and reshape the value systems of Malaysians (Sheppard 2001). Evidence shows that a seniority emphasis in the reward system is weakening. A survey by MEF (2004) showed that 90.5 per cent of 304 companies practised performance based reward systems, although seniority still minimally counts to a varying degree in pay decisions. Similarly, promotion based on seniority as a reward for loyalty is replaced with a performance and merit system. It is common that training expenses is the first company facility to be curtailed in times of budget restraint. This reduction in staff service is particular in those HR departments that are administrative in nature. Malaysian firms often feel that it is too costly to train employees beyond the required basic skills. This feeing is partly attributable to the general notion among Malaysian firms that employees should shoulder training beyond the contractual scope of work. These firms also tend to look at developmental training as a threat to staff retention (Yong 1996). Such reluctance may also be largely due to the need to offer better pay packages given that training enhances job mobility. The reluctance of Malaysian firms in human development led the Malaysian government to intervene to promote skills training. Hence, a levy grant system was introduced in 1993 with the purpose of providing financial assistance to defray part of the training costs undertaken by employers. Manufacturing firms are now required to contribute one per cent of payroll to this training fund. Although the role of the HR department and its importance are gradually expanding to broader perspective in many of Malaysian firms, the general notion is that the HR department still plays merely an administrative role. However, some progressive Malaysian firms, which undertook a genuine effort to adopt Western HRM practices, have recognised the strategic importance of the HR department, evolving from a focus on employee welfare to one that emphasises both human development and optimal productivity. Foreign nationals intending to work in Malaysia must generally obtain one of three work visas: employment pass, temporary employment visit pass, or professional visit pass.

An employment pass applies to investors, skilled workers, professionals, and senior management in companies. The minimum employment period required is two years.

A temporary employment visit pass is for unskilled and semi-skilled workers in the manufacturing, construction, and service fields. Foreign nationals under this category may typically work for up to three years, with extensions available on a year-to-year basis.

A professional visit pass is generally appropriate for technical experts, including experts in machinery installation, and technical trainees. Professional visit passes are typically issued on a short-term basis.