Chapter 2:

LITERATURE REVIEW

1.1 Introduction
This study examines at factors that causes employability issues among graduates
in Klang Valley area. The chapter here firstly will review the structure and framework
for the issues of graduate employability and also what causes these things to happen.
Later will be followed by the behaviourist approach and lastly to comprehend the factors
of mismatching talents and graduate employability. This study aims to provide a
comprehensive understanding on the relationship between graduate employability
issues which leads to talents mismatching.

1.2 Graduate employability in Malaysia

The birth of various higher learning institutions in Malaysia has caused an influx
of graduates in Malaysia. Amid all of that, employability is not an easy task both
employers and jobseekers. This is due to the overload of graduates with a bachelor’s
degree produced in recent years. As of May 2016, the graduate employability (GE)
numbers increased to 76.1%. In Community colleges, the GE rate was a whopping 94%
(indicating a big demand for skilled workers). Employability skills are not job specific,
but are skills which cut horizontally across all industries and vertically across all jobs
from entry level to chief executive officer (CEO) itself. (Sherer and Eadie 1987, p.16)
“Too many young graduates leave universities without the skills, attitudes, and
understanding that are necessary to successfully enter the world of work. Jobs are
actually available, but unfortunately graduates are lacking in what the industries
demand. It seems reasonable to expect schools to teach students what they need to
succeed in the world of work.” (McCoy, 1991, p. 94)
 Nationally, Malaysia’s unemployment rate is at about 3.5% of the total workforce
and this is deemed as “functionally full employment” meaning most of graduates are
still able to find jobs. From the employers’ perspective, ‘employability’ seems to refer
to ‘work readiness’, that is, possession of the skills, knowledge, attitudes and
commercial understanding that will enable new graduates to make productive
contributions to organizational objectives soon after commencing employment (Mason,
Williams & Cranmer, 2006). This is the time where employers view soft skills such as
the ability to think critically and creatively as well as in solving problems. Unfortunately
newly graduates are lacking all of this.

Everything we see in this world today has changed tremendously in terms of

technological development, and most work needs to operate globally in order to survive
the competition which exists in the world these days. This change has created an impact
on the nature of work where a high level use of technology is a necessity to compete in
the global arena. (Jailani et al, 2006).

2.3 Talent Mismatching in Malaysia

In Malaysia a survey done by the Ministry of Higher Education has found that
most graduates have affirmed on what they will do upon graduation. Out of 224,575
graduates who took part in the survey, 126,966 or 56.5 per cent secured a job within six
months after graduating; 32,063 (14.3 per cent) had secured places to further their
studies; 5,246 (2.3 per cent) chose to further boost their skills, and 9,053 (four per cent)
were still waiting for job placements.

Faced with stiff global competition, an arising concern is that current graduates do
not match the needs of business. According to Khir (2006), graduates now are lacking
in both technical knowhow and generic skills. Competence is the fusion of both domains
of specific knowledge and generic skills, so efforts to increase graduates’ competence
must cover both areas. With a more challenging environment, employers expect
graduates Employability skills are those basic skills necessary for getting, keeping, and
doing well on a job (Robinson, 2000). Employability skills are generic in nature rather
than job specific and cut across all industries, businesses, job levels from the entry-level
worker to the senior most position.

Research on factors driving comparative trends on mismatching talents in advanced

and emerging economies have been scant. These developments in graduate
unemployment has raised several key policy questions for emerging economies,
regarding enhancing the quality and relevance of education systems to prepare for
rapidly evolving industries, the types of jobs being created and the readiness of the
human capital base, and measures to enhance matching in the labour market and
alleviate information asymmetry on industry skill needs.

Employers today are looking for graduates not only with specific skills and
knowledge but with the ability to be proactive enough to see and respond to problems.
In Malaysia, more employers are searching for graduates who are balanced, with good
academic achievement and possessing ‘soft skills’ such as communication skills,
problem solving skills, interpersonal skills and the ability to be flexible (Nurita,
Shaharudin & Ainon, 2004). These ‘soft skills’ (also known as employability skills) are
foundation skills that apply across the board, no matter what job the employee is
performing (Lawrence, 2002).

The reason graduates are unemployed is that they do not have the right degree. Some
graduates with specific qualifications are already abundant in the market, whereas
Engineering and other Science degree graduates are still in high demand. Another reason
is that graduates with a degree no longer automatically qualify for getting their first job.

Proficiency in English, the ability to present ideas, explain issues and problems, to
speak up in a constructive manner, to resolve problems, to understand issues and
problems faced by companies and to come up with workable solutions to problems are
all good communication and interpersonal skills sought after by employers. Therefore
employees are expected to contribute from day one of being hired. (Chang, 2004).
 Hence, graduate employment and graduate employability is a behavioural factor.
The factors can be caused due to the oversupplied of graduates from the Literature and
Social Sciences clusters which is currently not a hugely demand field in the industry
today. Among other factors are the lack of soft skills and technical expertise which is a
highly required nowadays. To understand the intention, theories of behavioural
approach are viewed in this chapter.

1.4 Social Cognitive Behaviour

Social Cognitive Theory (SCT) started as the Social Learning Theory (SLT) in the
1960s by Albert Bandura. It developed into the SCT in 1986 and posits that learning
occurs in a social context with a dynamic and reciprocal interaction of the person,
environment, and behavior. The unique feature of SCT is the emphasis on social
influence and its emphasis on external and internal social reinforcement. SCT considers
the unique way in which individuals acquire and maintain behavior, while also
considering the social environment in which individuals perform the behavior. The
theory takes into account a person's past experiences, which factor into whether
behavioral action will occur. These past experiences influences reinforcements,
expectations, and expectancies, all of which shape whether a person will engage in a
specific behavior and the reasons why a person engages in that behavior.

In his social cognitive theory of personality, Bandura included the concept of

observational learning as one of the main theoretical points. He argued that
reinforcement does not simply work as a mechanism, but it is actually the provider of
information of the next reinforcement to be given once the behavior is repeated. Bandura
pointed out that in order for the individual to repeat an agreeable behavior, he must
include his intellectual processes, in contrast with Skiner's belief that thinking only
occurs inside a "black box". In this sense, Bandura agreed that environment causes
behavior, but behavior can also cause environment.

This chief concept in his theory is called reciprocal determinism. Bandura's approach
to personality can be gleaned by this situation: Suppose an adolescent shows his
 aggressive personality trait because he is maltreated by his peers. When this person
expresses his aggression by way of violent acts, he can trigger either a higher level of
aggression or fear inside his peers' minds, therefore changing his environment.

In experimental situations, participants try to figure out what is wanted of them; they
construct hypotheses and reflectively test their adequacy by evaluating the results of
their actions; they set personal goals and otherwise motivate themselves to perfoffi1 in
ways that please or impress others or bring self-satisfaction; when they run into trouble
they engage in self-enabling or self-debilitating self-talk; if they construe their failures
as presenting surmountable challenges they redouble their efforts, but they drive
themselves to despondency if they read their failures as indicants of personal
deficiencies; if they believe they are being exploited, coerced, disrespected, or
manipulated, they respond apathetically, appositionally, or hostilely. These motivational
and other self-regulative factors that govern the manner and level of personal
engagement in prescribed activities are simply taken for granted in cognitive science
rather than included in causal structures (Carlson 1997).

The second line of theorizing centers on the macroanalytic workings of socially

situated factors in human development, adaptation, and change. Within this theoretical
framework, human functioning is analyzed as socially interdependent, richly
contextualized, and conditionally orchestrated within the dynamics of various societal
subsystems and their complex interplay. The mechanisms linking sociostructural factors
to action in this macroanalytic approach are left largely unexplained, however. A
comprehensive theory must merge the analytic dualism by integrating personal and
social foci of causation within a unified causal structure. In the paths of influence,
sociostructural influences operate through psychological mechanisms to produce
behavioral effects. Social cognitive theory favors a model of causation involving triadic
reciprocal determinism. In this model of reciprocal causation, behavior, cognition and
other personal factors, and environmental influences all operate as interacting
determinants that influence each other bidirectionally

1.5 The definition of emotional intelligence

 Emotional intelligence is the “something” in each of us that is a bit intangible. It
affects how we manage behavior, navigate social complexities, and make personal
decisions that achieve positive results. Emotional intelligence is made up of four core
skills that pair up under two primary competencies: personal competence and social
competence.
The first use of the term “emotional intelligence" is often attributed to A Study of
Emotion: Developing Emotional Intelligence from 1985, by Wayne Payne. However,
prior to this, the term “emotional intelligence" had appeared in Leuner (1966). Stanley
Greenspan (1989) also put forward an EI model, followed by Salovey and Mayer (1990),
and Daniel Goleman (1995). A distinction between emotional intelligence as a trait and
emotional intelligence as an ability was introduced in 2000. Daniel Goleman’s model
(1998) focuses on EI as a wide array of competencies and skills that drive leadership
performance, and consists of five areas i.e. Self-awareness, Self-regulation, Social skill,
Empathy and Motivation.

In the context of graduate employability and talent mismatching in Klang Valley,

1.6 The definition of self confidence

The self-esteem movement has swept through Western culture over the past 50
years, with parents and teachers alike doubling down on the idea that improving children’s
self-confidence will lead to improved performance and a more successful life in general
(Baskin, 2011).

This movement started with a book published in 1969, in which psychologist

Nathaniel Branden argued that most mental or emotional problems people faced could be
traced back to low self-esteem. Branden laid the foundation for the Self-Esteem
Movement with his assertion that improving an individual’s self-esteem could not only
result in better performance but could even cure pathology.
 Since then, there have been thousands of papers published and studies conducted on
the relationship between success and self-esteem. This is a popular idea not only in
literature but in more mainstream mediums as well. Before we begin exploring the
complexities of self-esteem it is essential to unpack the differences between the
overlapping concepts of self-efficacy, self-confidence, and self-esteem.

1.7 The definition of self-efficacy

Social cognitive theory suggests that self-efficacy, "people's judgments of their

capabilities to organize and execute courses of action required to attain designated types
of performances" (Bandura, 1986, p. 391), strongly influences the choices people make,
the effort they expend, and how long they persevere in the face of challenge. According
to Bandura (1986), how people behave can often be better predicted by their beliefs about
their capabilities than by what they are actually capable of accomplishing, for these beliefs
help determine what individuals do with the knowledge and skills they have. Although
researchers have established that self-efficacy is a strong predictor of behavior (Maddux,
Norton, & Stoltenberg, 1986), research on the relationship between self-efficacy and
academic performance in areas such as mathematics is still limited (Bouffard-Bouchard,
1989).

Studies of math self-efficacy have been largely correlational, and researchers have
emphasized the need to construct causal models with which to conceptualize and test
hypothesized relationships (Hackett & Betz, 1989; Meece, Wigfield, & Eccles, 1990).
When causal modeling has been used, most models have excluded key variables identified
as influencing math performance (most notably, self-concept), or the theoretical
framework used to hypothesize relationships was not based on social cognitive theory.
Thus, results have added little to a better understanding of self-efficacy's influence.

1.8 The definition of self confidence

 Self-confidence is considered one of the most influential motivators and regulators
of behavior in people's everyday lives (Bandura, 1986). A growing body of evidence
suggests that one's perception of ability or self-confidence is the central mediating
construct of achievement strivings (e.g., Bandura, 1977; Ericsson et al., 1993; Harter,
1978; Kuhl, 1992; Nicholls, 1984). Ericsson and his colleagues have taken the position
that the major influence in the acquisition of expert performance is the confidence and
motivation to persist in deliberate practice for a minimum of 10 years.

Self-confidence is not a motivational perspective by itself. It is a judgment about

capabilities for accomplishment of some goal, and, therefore, must be considered within
a broader conceptualization of motivation that provides the goal context. Kanfer (1990a)
provides an example of one cognitively based framework of motivation for such a
discussion. She suggests that motivation is composed of two components: goal choice and
self-regulation. Self-regulation, in turn, consists of three related sets of activities: self-
monitoring, self-evaluation, and self-reactions. Self-monitoring provides information
about current performance, which is then evaluated by comparing that performance with
one's goal. The comparison between performance and goal results in two distinct types of
self-reactions: self-satisfaction or -dissatisfaction and self-confidence expectations.
Satisfaction or dissatisfaction is an effective response to past actions; self-confidence
expectations are judgments about one's future capabilities to attain one's goal. This
framework allows a discussion of self-confidence as it relates to a number of motivational
processes, including setting goals and causal attributions.

"Self-confidence," as the term is used here, is the belief that one can successfully
execute a specific activity, rather than a global trait that accounts for overall performance
optimism. For example, one may have a lot of self-confidence in one's ability at golf but
very little self-confidence in one's tennis skills.

2.9 Hypothesis Development

2.9.1 Career Development Learning
 Career development learning is one of the core reasons to acquire
employment. Gaining new sets of skills for a better chance of acquiring jobs is
highly encouraged among graduates to stand out among their peers.
Thus, Career development learning (CDL) is associated with lifelong
learning and related to: Learning about the content and process of career
development or life/career management. The content of career development
learning in essence represents learning about self and learning about the world of
work (Patton & McMahon, 2001). Watts (2008) indicates in his study, career
development learning can help students to enlighten their future and expose the
path they will choose, which they can build their employability and venture
competences. He also asserts that career development learning may be organized
variously to raise students ‟awareness of employability and how to get self-
management in their studies and extra-curricular activities to optimize the
employability.
Pool and Sewell (2007) point out that graduate needs to grab the best chance
of securing occupations in which they can be satisfied and successful by receiving
some education in career development learning. Also known as career education,
Watt (1977) defines it as consisting of planned experiences designed to assist the
development of self-awareness – in terms of interest, abilities, value and others;
opportunity awareness- knowing what work opportunities and what their
requirement are; decision learning – decision making skill; and transition learning
– including job search and self-presentation skill. The formulation is better known
as DOTS models; decision-making learning (D), opportunity awareness (O),
transition learning (T) and (self-awareness (S). Activities that help students to
become more self-aware, to enable them to give real deliberation to the things that
they take pleasure in doing, engrossed in, motivate them and suit their personalities
should be included as proposed by DOTS model.
Searching job markets needs to be learned by undergraduates in order to see
what opportunities are available, how to present themselves effectively to the
potential employers, and how to make decisions about their careers (Watts, 2006).
 H1: There is a significant relationship between career development learning
and graduates employability and matching with the rights talents

2.9.2 Experience Work and Life

Work and Life also plays a pivotal role in graduates employability. Take for
example, an experienced employee despite only having a diploma or degree may
be preferred over a fresh graduate with a Master’s degree by a company due to
his/her previous experience. After all, companies are looking for those who possess
the all-rounder skills not just academic achievement.

So much research points to work experience as being something that

prospective employers value greatly in graduates. Some of the key findings of the
Work Experience Group (2002), appointed by the government to look at work
experience opportunities in higher education, among the key findings are;

By providing guidance, students of all ages can learn from their experiences
in the world of work to develop their key competences and skills and enhance their
employability.

Employers value people who have undertaken work experience, been able
to reflect upon that experience and then go on to articulate and apply what they
have learnt

Partnerships between employers and Education are valuable in promoting

work-related learning and in improving the quality and quantity of such experiences
(p. 4).

According to The Pedagogy for Employability Group (2004), it is widely

agreed that graduates with work experience are more likely to secure employment
than graduates without. It is also important to consider the wider life experiences
that many students, particularly mature students, bring with them into Higher
Education.
 There is a need, therefore, for students to be given this information and
provided with guidance as to how their life experience and work-related experience,
either arranged as part of a course, carried out on a voluntary basis or gained through
part-time work, can be used to enhance their levels of employability.

H2: There is a significant relationship between work life experiences and

graduates employability and matching with the rights talents

2.9.3 Degree subject knowledge, understanding and skills

Prior entering the workforce, graduates should have an utterly clear
understanding on what are the jobs required. This is to ensure that they are able to
execute the task assigned in the future.

This has to be a central concept in the model. The motivator to enter higher
education is generally perceived to be to study a specific discipline in depth, to gain
a degree, get a higher qualification and thus get a good or better job, and it still
remains the case that the better qualified have far greater employment opportunities
(Johnes, 2006). Graduate Prospects (2005/6, p. 17) identified two-thirds of graduate
vacancies as open to graduates of any discipline, which implies that for the
remaining third, subject-specific knowledge, understanding and skills are still of
vital importance. It is essential to recognise that employers will judge graduates on
the basis of how successfully they have completed their degree course (i.e. their
degree classification) perhaps because this is often the sole measure available to
them.

When it occurs to be the case whether or not they are entering an occupation
with direct relevance to their degree, and as such there is a need to recognise the
central importance of this particular element of graduate employability. However,
even though the subject-specific knowledge, understanding and skills are still
extremely important in many cases, these alone are unlikely to secure a graduate
occupations in which they can be satisfied and successful.
H3: There is a significant relationship between Degree subject knowledge,
understanding and skills with graduates employability and matching with the
rights talents

2.9.4 Generic Skills

A set of specific skills is highly encouraged prior being employed. The

skills are managing tasks, solving problems which are analytical and conceptual
thinking and also gathering information to assist problem solving and decision
making.

There has been considerable debate in the literature about the terminology
for generic skills, which may also be referred to as “core skills”, “key skills” or
“transferable skills”. The term “generic skills” has been used for the purpose of this
model are normally used in to represent the skills which can support study in any
discipline, and which can potentially be transferred to a range of contexts, in higher
education or the workplace (Bennett et al., 1999, p. 76).

In Knight and Yorke’s (2002, p. 2) paper, they discuss some of the research
into the value placed by employers on generic skills in graduates and interpret the
message from employers as, give us a bright and engaged graduate, and we will
build specific expertise for this organisation on top of that.

Employers want graduates with relevant subject specific skills, knowledge

and understanding, but in addition to this are looking for well-developed generic
skills in a number of areas (Harvey et al., 1997)

There is also the need to mention enterprise and entrepreneurship skills,

which are often discussed in the employability literature. It is likely to be the case
that an enterprising graduate would be valued in any organisation, either profit-
making, non-profit making, large or small. For the purpose of this model, it is
suggested that a graduate who could be described as enterprising would be
imaginative, creative, adaptable, a willing learner – in fact, they would have most
of the skills already listed under the “generic” category.

Entrepreneurial skills, on the other hand, may be a valuable addition that

some graduates will want to acquire, but not all. Not everybody wants to set up
their own profitable business. As entrepreneurial skills are not considered an
essential element in the model, they have not been included.

H4: There is a significant relationship between generic skills graduates

employability and matching with the rights talents

2.9.5 Emotional Intelligence

In the employment world today, academic intelligence solely is

insufficient as the working environment today requires an astute way of handling
multiple tasks and challenges.

Moynagh and Worsley (2005) suggest that in the future knowledge-

based economy, emotional intelligence will become even more important with the
predicted expansion of customer-facing jobs in which human interaction plays a
central part.

Emotional intelligence has been defined as the capacity to reason

about emotions, and of emotions to enhance thinking. It includes the abilities to
accurately perceive emotions, to access and generate emotions so as to assist
thought, to understand emotions and emotional knowledge, and to reflectively
regulate emotions so as to promote emotional and intellectual growth (Mayer et al.,
2004, p 197).
 In more simple terms, Goleman (1998, p. 317), who has done much
to make emotional intelligence accessible to a wide audience, defines it as the
capacity for recognising our own feelings and those of others, for motivating
ourselves, and for managing emotions well in ourselves and in our relationships.
As emotional intelligence is not fixed genetically, nor does it only develop
during early childhood (Goleman, 1998, p. 7), then it seems to be something people
can learn, which would suggest that this is something that higher education
institutions (HEIs) can successfully teach. The issue of emotional intelligence, or
emotional literacy as it is often described, has been taken on board by many primary
and secondary schools keen to improve these skills for their pupils.

If the large amount of research looking at the academic and life success of
people with high levels of emotional intelligence is taken into account (see
Qualter et al., 2007, for a review), it is difficult to see how any model of graduate
employability would be complete without its inclusion.

H5: There is a significant relationship between emotional intelligence

graduates employability and matching with the rights talents

2.9.6 Self-efficacy/self-confidence/self-esteem

The three closely-linked “Ss” of self-efficacy, self-confidence and self-

esteem provide a crucial link between knowledge, understanding, skills, experience
and personal attributes and employability.

According to Bandura (1995, p. 2), he perceived self-efficacy refers to

beliefs in one’s capabilities to organize and execute the course of action required to
manage prospective situations. Efficacy beliefs influence how people think, feel,
motivate themselves and act. Bandura (1995) suggests a number of sources of
efficacy beliefs. The ones particularly relevant to employability is the key to
employability, mastery experiences, vicarious experiences provided by social
models and also social persuasion.

If self-efficacy is seen as a belief that one has the capability in a particular

situation, then self-confidence could be seen as the way this is projected to the
outside world. Self-confidence appears to be something that can be seen from a
person’s manner and behaviour. According to Goleman (1998, p. 68) people with
self-confidence are able to present themselves with self-assurance and have
“presence”.

It has been suggested that self-confidence can be either a trait or something

that is specific to certain situations. Meanwhile, Norman and Hyland (2003) point
out that if self-confidence is seen as a trait, which personality theorists suggest are
relatively stable over time, then those who lack self-confidence would be unlikely
to develop it through educational activity.

According to Owens (1993), people with global self-esteem have self-

respect and a feeling of worthiness but are realistic in their evaluations of
themselves. Without this realism a person is unlikely to reflect on areas for
improvement, which is crucial to the process of lifelong learning.

It is suggested that increased self-esteem is a major part of the key to

employability. It is important to have a belief in one’s ability to succeed and be able
to project this belief to the outside world, but by achieving a high level of self-esteem
a graduate will also be realistic about their achievements and be committed to
lifelong learning.
H6: There is a significant relationship between Self-efficacy, self-confidence
and self-esteem with graduates employability and matching with the rights
talents.