Developing and validating halal compliance rating as a performance appraisal tool for halal-certified restaurants in Malaysia

Abstract

The proliferation of halal certified dining options has resulted in increased competition among restaurants. Consumers now have more choices than ever before. However, there is no rating system in place to help restaurants differentiate their halal compliance performance from competitors while also assisting consumers in selecting the best halal restaurant. Moreover, some recent non-compliance incidents have shaken consumers’ confidence in JAKIM. To address this problem and research gap, the present study aims to develop and validate the model of best practice of Halal Compliance Rating (HCR) as a performance appraisal tool for halal-certified restaurants in Malaysia. This objective has been achieved in four phases of the research. Firstly, ten HCR components have been identified from an extensive review of the literature. Simultaneously, the Analytic Hierarchy Process (AHP) method was found to be the most suitable method of ranking and rating. In this regard, the first phase of the research also identifies a rating scale appropriate for the language representation of HCR scores. Phase-II of the research measures the weights of the selected HCR components and the selected rating categories by applying the pairwise comparison method of the AHP, involving 20 experts from different organisations. Phase-III applies the AHP methodology to rank and rate the halal-certified restaurants in Malaysia. For this, data were collected from a total of 320 restaurants across Malaysia using a self-administered questionnaire. Majority of the respondents (74.38%) demonstrated a "Good" (50% to <70% halal compliant) rating of HCR. None of the restaurants was found to perform "Poor" (less than 30% halal compliant) HCR. The ten selected HCR components form the model of best practice of HCR (BPHCR) in this research. The final phase validates the model by applying structural equation modelling (SEM) methodology through the assessment of both measurement and structural models. The analysis established the reliability, validity, and goodness of fit of the proposed model. Additionally, out of thirteen hypothesis eleven hypothesis were accepted. The present research is significant being the first of its kind to measure and rate the halal compliance practice of restaurants. The proposed HCR tool can be adapted to any other field of the halal industry. Additionally, this can be very effective tool for halal auditors to rank and rate the halal certified restaurants and appraise their halal compliance performance. The proposed HCR tool can also be adapted to other field of the halal industry.