Comparison of Human Resource Management in Shanghai and Western Countries - Coursework Example

Running head: COMPARISON OF HUMAN RESOURCE MANAGEMENT IN SHANGHAI AND WESTERN COUNTRIES Student name: Student number: Course title: Lecturer: Date: Abstract The human resource management practices and functions are not transferable, automatically or with ease, by international corporations or local organizations/companies which are entering the Chinese markets, which are found to be vibrant economically. International Corporations which use the Western principles of human resource management are perceived by most Chinese people as more attractive path for career development. There are five ways in which Chinese staff can be attracted and maintained. These are competitive salary and substantive benefits (this accounts to 23 percent), availability of career development opportunities (accounts 19 percent), work which is creative and adds more meaning to life for employees (accounts 7 percent), location of the company (accounts 3 percent). The human resource management practices in the West and in Shanghai are different. The difference is seen in the fact that Chinese human resource management strategies are seen to be more autocratic. There are many researches which claim that the Chinese human resource management strategies are more effective but there are controversies surrounding the methodologies that were used to come up with these insinuations. For this reason, there is need to establish the relationship that exists between the human resource management strategies that are used in the West and those used in Shanghai, China. This paper will look at the human resource functions which are found in Western countries and compare them with those of Shanghai, China. Table of Contents Abstract 2 Table of Contents 3 Introduction 4 National look 6 Australia 6 China 6 Recruitment and selection in Australia 7 Overview 7 Recruitment and selection in Australia 9 Overview 9 Techniques used for recruiting 10 Recruiting from within 10 Advertisements 10 Agencies for recruiting 10 Educational institutions 11 Techniques for selection 11 Interview 11 Tests 11 Reference checks 12 Physical examinations 12 Recruitment and selection in Shanghai 12 Overview 12 Techniques for recruiting 16 Advertisements 18 Job fairs 18 Campus recruitment 18 Global image 19 Business management services 19 Corporate coordination 19 Techniques for selection 19 Interview 19 Tests 20 Behavioral event 20 Comparison 20 References 22 Introduction From the time China introduced the market economy in 1978, it has become one of the economies to reckon with in Asia and in the entire world generally. Recently, there has been expansion all over the world, and the interest that is seen in China has exploded to a point where any economic fever found in China becomes a syndrome for the whole world. In addition to this, the entrance of China to the World Trade Organization in the year 2001 made China to be immediately recognized as the world economic superpowers. According to researchers, at the beginning of the twenty-first century, China was found to command 42 percent share of the foreign investment in the whole of Asia. Also, there were sixty thousand foreigners who were residents in Shanghai City. Many more foreigners were found to be operating in various cities in China. They were employed by international corporations. They therefore brought with them the culture and the human resource management notion that exist in their countries of origin. This therefore resulted in the need for State-owned corporations in China to adopt different management practices so that they would be in a position to bring some impact to the lives of consumers, citizens and employees by way of using the ever-changing and dynamic economy; this presented a challenging aspects to employees, employers and organizations. In the West, research have been conducted and show that a causal relationship between human resource operation management and the performance of the given organization. The studies therefore conclude that the strategies that are used in the management of human resources of any organization have direct impact the outcome of the performance of the organization. If there are coherent and integrated human resource management techniques, then there will be superior performance in the organizations. Although this is the case, less is known about the effects that are there with the emerging human resource management issues that are emerging in Shanghai and in China in general. There is also no research which has been done to show the possible impact that introducing new human resource management will have on the state-owned organizations. This paper advocates for the introduction of new human resource management strategies to newly-introduced organizations rather than to traditional state-owned corporations as this would be more complex. The enthusiasm that is seen with new generation Chinese managers towards getting new human resource management skills and practices is in good faith and there is need to have a careful consideration of the context of the organization before the desire to integrate the Western and Eastern human resource practices may be taken as realistic. One of the things that should be clearly taken into close consideration is to carefully look at the two management styles and understand the practices that are offered by both. However, the paper will compare the Western human resource management, particularly the recruitment functions and selection and the Eastern approaches that are used in Shanghai and generally in China. The paper will look at the cultural differences between the Western countries, and more specifically Australia, and China. It also looked at an examination of the recruitment and selection practices that are used currently in both practices. National look Australia It became a federal state in 1901 and is part of British Commonwealth. The population is approximately twenty million people who are located ion a few major cities. Many people, about 93%, are Caucasian and English is the predominant language. The total population has a 7% Asian population. The country is rich in natural resources and it has built in less than 100 years to become one of the strongest economies with a per capita GDP which is equivalent to four dominant West European economies. The major partners that trade with Australia are Japan, China, India and South Korea. Australia is strategically located in the South East Asia which makes it be the preferred choice for supplying the demand for natural resources to this region and this is seen to make the relationship that is experienced today to grow even further. China The population of China constitutes one fifth o the world population. It is one of the largest communist state with a population for over .36 billion people; of the population, almost 100% of them are ethnic or Han Chinese. The standard language that is spoken here is Chinese which a derivative of Mandarin dialect is. Although there are many dialects, the country has only one written language which is Chinese. Given a yearly economic growth rate of 9.1 percent, the demand for natural resources exceeds the capacity that can be produced locally. Therefore, there is higher demand for the import which is making it to be an important aspect of the world economy. Political control is seen to be tight even though the living standards have greatly improved. Although there is state-controlled system, the influence of non-state organizations and individuals is felt in the economy. The devolution of power and control to local authorities has seen a significant increase in GD from the year 1978. One challenge that is experienced by the government is the sustenance of job opportunities for the millions who have been laid off from previous corporations owned by the state. Another concern is that of one-child policy; China is becoming one of the world’s rapidly aging countries. This has ramifying effects in the provision employment for Chinese. Shanghai Shanghai is one of the fastest growing cities of China and is located on the edge of Huan Pu River. It has a history of foreign settlements. Its growth is attributed to inhabitants of foreigners especially from Japan between 1931 and 1945. Since then it has been upbeat in banking and retail industries. Top on this, it boasts as among the largest ports in Asia. Like any other Chinese city, it has foreign encroachments and this has an influence on the human resource management practices. Recruitment and selection in Australia Overview Recruitment can be defined as the process of appealing to individuals on a timely manner and also in the required numbers and with the right qualifications, making them interested in a company and encouraging them to apply for jobs in it. In this recruitment process, effort will be made to make sure that the applicants are informed of the requirements required of the position to ensure optimal performance in the organization. They will also be informed of the career opportunities that come with the positions that are being advertised. The decision to fill the position with someone coming from within or from far will depend on the human resource policies of the organization and the qualifications of the applicants. It will also depend on the politics that come with the positions. Selection is the process where the applicants will be evaluated and the best amongst them will be taken to fill the position(s). The methods that will be used for selection will either be conventional or non-conventional. The efficiency that will be used for recruiting will make the selection process to be efficient also. The selection process should be as rigorous as possible so that all the necessary information that concern the applicants will be caught and also so that the right qualifications will be matched to the right job. The recruitment and the selection stage is usually the task that is delegated to the human resource personnel. The managers of the other business units should be involved in this process as the candidates will be serving in the various units. The managers should be involved in the conventional process of recruiting and selecting. Although there are various processes of selecting and recruiting that are used in Australia and Shanghai, the salient features of them will be discussed in this paper. It is not suggested that they are the only methods of proceeding but they are the most outstanding features of the trends in human resource management. The strategies that are used in Australia are designed in such a way that they integrate a workforce which is multicultural. In Shanghai, this is different as the opportunities are great; there are challenges that are experienced in the recruitment stages of China because they have their own methods and strategies of recruiting. Recruitment and selection in Australia Overview One thing that should be clear with the recruitment and the selection is that the strategies flow from the vision and the strategic objectives of the organization, that is, the processes and the strategies that are used for recruitment should be in tandem with the higher levels of strategies. The strategy debate in Australia also saw the views of Reddins (n. d) where he outlined his opinions on the characteristics that constitute the strategic recruitment; this is practiced by very few organizations. Reddins came up with five major features which include: The human resource management plans are associated and support the corporate plans. Human resource plans also has the plans for people development and succession plans. The strategies for recruiting are in place and will work to ensure the same objectives are made. The skills that are appropriate are there and support the strategies that are used for recruiting. There should be plans to have training and inductive training so that the process of recruiting can be supported. Techniques used for recruiting Recruiting from within In Australia, it is common to see organizations recruiting from within the auspices of the organization (Nankervis et al., 2002). Most organizations in Australia and indeed in most Western countries prefer filling the positions that are available above the entry level positions by way of promotions and transfers. In so doing, an organization will capitalize on the cots and the expenses it has invested on the current employees. Advertisements Most organizations in Australia and Western countries make positions known to the public and entire staff members through advertisements. The most commonly used channels are journals and newspaper. The radio and television are sometimes used to reinforce the print media. The advantage of using advertisement is that it reaches a large number of possible applicants. There is some aspect of selectivity that is achieved when an organization chooses to use the newspaper and journals as they are able to target a specific audience and group of people. One let-down, though, is the fact that the time that is used in designing and preparing the advertisement is that it is time-consuming and require careful consideration and design in order to come up with the right advertisement that will suit the particular audience. Agencies for recruiting There are organizations which have specialized in recruitment in Australia and have a large placement of employees that will serve the requirements of the various organizations in Australia. There are over 300 private and government organizations that are there to help in the selection process of various organizations and companies. Educational institutions Educational institutions are also a source of young applicants with education but with little experience. Blue collar and clerical positions are taken by high school graduates. The technical jobs are usually filled by students who are at colleges. The technical colleges are also source of management staff. For organizations which are involved in internship projects, universities are the source of qualified and professional employees. Techniques for selection Interview The process of interviewing is significant in the selection process in Australia and the Western world. Research is a very important process that is valued by many organizations. The interview methods are categorized basing on the methods that are used in the interview process. It can either take two forms which are non-directive and directive. In the non-directive, the interviewee is given all the authority to determine the direction of the interview process. In the directive method, there are pre-determined questions that are to be asked. Also, there is a structure which is followed in the process. Tests These are a measure which is standardized that is used to gauge a person’s abilities and aptitudes. The interests of the person are also got from this method. It is common for organizations to develop job knowledge tests which are used to gauge the applicant’s understanding of the job in question. The individual managers will make up their mind on the advantages and disadvantages of using tests to get the people they desire. Reference checks Research has found out that 25% of all curriculum vitas have errors. It is therefore common for organizations to make references with the former colleagues and the employers of the applicants so that they get the true picture of the applicants and not just relying on whatever is written in the curriculum vitas. For the international applications, it is common to see the applicant’s spouse being interviewed. This is to ensure that the response is balanced. Physical examinations Many applicants are required to undergo physical examination. This process is important as it enables employers to take into account benefits like health, travel, and disability. Drug testing is also common in most organizations. This is not like the case sometime back where the drug testing was done for employees who were to work in mining firms. This is a commonplace for many companies looking for employment in these sectors. Recruitment and selection in Shanghai Overview While human resource strategies have been widely used in Western countries and are fully developed, the functions of human resource development in Shanghai and in general the whole of China are still in early stages of development. On the other hand, before the 1980s, the human resources processes were very significant in Shanghai. Before the year1978, China had a planned economy where the human resource policies followed a somewhat a political trend where the whole processes were planned and controlled from the central government and from the labor bureau. This implies that the enterprises in Shanghai had no control on the human resource personnel that they had as the planning and assigning of the personnel were done by the state of China. This was the case for most organizations because most of the fact that most organizations and enterprises were owned by the state and the employment that they got were almost permanent. Most employees had permanent employment. This means that the departments of human resource development were not necessary except to be used for creating and maintaining cordial relationships between the state and the organization. This method of recruitment and management of human resource has its origins traced to the Soviet system of management of the 1950s. With the introduction of the more open policy in the year 1978, there are various changes that have been seen in human resource management and generally in the whole China. One example of these changes is the relaxation of the state over the development of technology and planning of economy. They also allowed the planning of the human resource functions. They have also adopted western styles of human resource management. This is seen in the introduction of employment contracts in organizations and government corporations. This saw state-owned organizations and other free organizations being transformed to organs which are independent in their economy and were at liberty to set their own production plans. This saw the introduction of human resource plans like hiring and terminating employment so that the needs of the organization are met. The changes saw the rise of the need to completely overhaul the human resource processes in Shanghai. This was coupled with the fact that Shanghai is a port which is home to many foreigners. The presence of international investors made it possible to have great changes to the human resource development. With these changes also came the urge to employ local people and also to have salary increase for the locals became vigorous than ever before. The competition for skilled employees also became more intense than before. One notable difference between the human resource functions of Shanghai and the West is that four types of candidates exist in Shanghai which are the locals, international Chinese, Chinese in the overseas, Chinese who are returning, and the repatriates. The urge to understand the advantages and disadvantages of hiring candidates in these four groups has made the local Chinese to be acquainted with the requirements and the human resource practices practiced in the West and thus improving the skill. Although this is the case, Bjorman and Lu (1999) and Chatterjee state that for an organization to successfully manage people in the global scenario, it is imperative that the organization hiring authorities should learn the culture of that particular place. They further argued that the international corporations operating in Shanghai and China should also learn culture of China that affects the management and organizational behavior and ensure that they implement the knowledge into the human resource practices instead of imposing the processes from the Western countries. The most common way of recruiting staff for international corporations is getting the local people to fill the required positions. The work in Shanghai is affected by some traditional values like ‘guanxi’, ‘face’, and ‘harmonious relationships’, that need the employers, whether they are state or private, to recognize new opportunities so that new staff can be taken in (Benson, 1996). In Shanghai, although there are incentives that are associated with employing extra staff, the processes of human resource management are largely based on relationships. Even though the practice of having a job for life is fading away, it still has significant place in Shanghai and also in the human resource practices in Shanghai and in other parts of China. There is residency policy which has made the employment of people from other places to be hard in Shanghai and generally in most other parts of China. These rules and policies are being erased in Shanghai. The reason for this is so that more talented staff. Although this is the case, there are four features which are eminent in Chinese culture which will require that organizations consider them while they are undertaking their recruitment and selection exercises. a) Respect for age and hierarchy The notion of showing respect for seniors and superiors in families can be attributed to the Confucian beliefs. The Chinese family values this principle so much. It is also important that people respect superiors from different families as it helps to define the social standing of an individual. Respect of authority in the business environment will lead to centralized process of decision making and also will enable respect for authority and the recognition of authority. b) Face and harmony The social life of Chinese recognizes face and harmony. When coming to a consensus, both parties should save face. One example is in a situation where a manager criticizes an employee in a multitude of other employees. This is considered in Chinese as someone losing face. The loss of face will break down all the personal relationships that existed for that employee and will also destroy the communications that there is for the managers and employees and will in turn bring an impact on the internal process of management. The indirect mode of communication that exists for most employees is so that face can be saved for these employees and maintains cordial relationships between managers and employees. c) Group orientation There is the practice of collectivism culture in Shanghai and whole of Chinese culture. It is therefore common see Chinese people identifying themselves with various groups. Due to this, there is a distinction between ‘insiders’ and ‘outsiders’. d) Personal relations (guanxi) Guanxi is the good relationships that exist between organizations and the relevant authorities. It is important to know that guanxi also exists in companies and organizations. Good interpersonal relationships between the subordinates will create open communication systems in the organizations. A good guanxi system will make the organization to develop cordial relationships and also facilitate the development of management processes thus promoting the loyalty and ties between the employers and the employees (Bjorkman, & Lu, 1999). Techniques for recruiting The policies for recruitment have changed from the time new laws were introduced in the year 1995 and also a new employment contract system has since been introduced (Benson, & Zhu, 1999). Enterprises have the right to hire and fire employees at will. This is more so in enterprises owned by the government. The new laws of labour protect the rights of employees and will also make sure that all job seekers are treated fairly without any form of bias. Corporations which are owned by the government can hire graduates or people with experience from other companies. Although these laws exist, it is almost impossible to counteract with the power culture that is seen in organizations. It is common to see organizations adhere to the belief and the powerful interpersonal; system of guanxi. The culture is prevalent in either organizations which are owned by the state or that which is owned by the private sector. It is therefore hard for employees who are recruited externally to cope with an organization which has already existed for long even if these new employees have the required training and education (Bjorkman, & Lu, 1999). The informal labor market is characterized by scenarios where the vacancies are given to relatives and children of employees who are already in the system. This is common although there is lip service of having unbiased recruitment processes all organizations. Research that was done by Ip (1995) found out that about 80% of employees in all organizations found their current employments through references made by their friends and relatives in the said organizations. A similar research that was done by Ding et al. (1997) found out that the percentage is much higher. It has been found out that most organizations still practice nepotism although this trend is seen to diminish in senior management. This means that even though the recruitment process for most organizations is seen to be aping the Western style, the recruitment process have changed little. Advertisements The newspaper is the common mode of letting the public knows of a job opening. The advertisement of a vacancy is not allowed to be published until it has got the approval from the local labor and social security. Many organizations reach and appeal to many qualifies employees through the use of newspapers. To save on advertising costs, many small companies and retail stores use the ‘help wanted’ in store windows. The advertisements get their way in local newspapers or from publications from the local companies. It is common to indicate the make and the location of the company because the reputation of any company is very important. Job fairs The common avenues for recruitment are the labor market. There are seminars that act as personnel exchange that are commonly referred to as ‘lao dong li shi’ (to mean free market labor). Fairs are practiced in Shanghai city and in major cities in China. The use of fairs play an important role as it is a boost to many companies and also a place where the job seekers get to know the various job openings. The disadvantage of those is the fact that job seekers are required to pay some fee to get into these fairs. Campus recruitment The organizations can go to the universities and colleges to look for final year students. If they get some potential employees there, negotiations will then begin and the candidate will then be offered employment when they are through with their studies. This exercise is usually done in November and December done from the month of October to December. Global image With the globalization taking shape and China adopting strategies to be used world-wide, Shanghai is adopting the strategies which are commonly seen Western organizations. They are especially making use of these technologies in international corporations. Business management services Shanghai is a city where there is technical education and while this is the case, managers were in the past promoted because of their political affiliations. It is therefore common to see it ‘provincialized’. It is therefore worth noting that although China is striving to open, there are cultural imperatives which must be respected by the business management services. Corporate coordination There are establishments of International Communications and PR companies which are establishing offices in China so that they assist international companies in their dealings with Chinese and government officials. Techniques for selection Interview Selection, like the Western companies, is still a vital tool which is efficient for selecting the right candidates. The difference comes in situations where when the applicant enters the room, they should lower the eyes when they are being greeted by the panelists. This is a show of respect. Tests There are many tests which are used by Shanghai firms to gauge applicants. These tests include technical, English proficiency and problem solving tests. Most Chinese companies do not do the aptitude tests as this will lead to lose of face for most applicants. Behavioral event Interactive role play and participatory events are the strategies that are gaining popularity with most employees as they show the people skills that the potential employees possess. Companies are seeking to have a good working relationship of employees. Comparison The Western and Australian ways of recruitment and selection process share common characteristics. The commonality that is seen here is due to the fact that multinational corporations have been seen to have operated in many Eastern countries and therefore the Western culture has infiltrated the Shanghai and other Eastern countries. The strategies for human resource development have been used in Multinational Corporation and they have been used in Eastern countries. There are differences in the sense that the culture influence that is seen in Shanghai and China plays a significant role in selection, recruitment and human resource management. In Shanghai, there is surface or rote learning which come from family affiliations. They are also seen in teacher-centered pedagogical processes. This is strengthened by use regurgitation of knowledge and repetition. In the West, students are expected to produce conceptual learning (deep learning). This comes from student-centered processes of pedagogy which are strengthened by the family and school. It is also strengthened by model formulations, differences between individuals and the construction of knowledge. In both worlds, the understanding of the world by the applicants and the general employees in general has been seen to develop from the academic understanding to integrate some understanding of reality. People integrate life philosophies and cultural relativism. With the current emphasis of modern management styles, it is common to see individuals striving to cope with these. References Benson, J. (1996). Human resource management revolution in China: recent changes in human resource management. People Management. 2 (12), 22-26. Borjman, I. and Lu, Y. (1999).The Chinese and Western joint-venture human resource management: Case studies in Shanghai compared with Australia. Journal of World Business. 34 (3), 306-324. Ding, D., Goodall, K. & Warner, M. (2000). A new era in human resource management in China? International Journal of Human Resource Management. 11 (2), 217-236. Ip, D. (1995). Making headways in China: The case of small firms. Asia Research Centre. Perth: Murdoch University. Read More