Adoption of HRM Best Practices from the West in China - Case Study Example

CASE STUDY OF HRM IN CHINA The country with the biggest number of population in the world, China’s rapid economic development is often associated with the miracle. Notably, its people and economic system have greatly contributed into the China’s achievements (Warner, 2013). It is also the distinctive way of managing people inside China that passed through generations and is present now in the unique Human Resource Management system. The deep-rooted traditional culture and value systems have formed and transformed the process of Chinese HRM and along with the increasing global competition and the impact of multinational companies’ practices Chinese HRM has been gradually affected by the Western dimensions of HRM. While the main aspect of Western HRM is the individual fixed-term contracts, individual performance evaluation, individual career development and freedom to recruit and fire, the Chinese HRM has also adopted these features into its people-management system (Yuan, 2013). However, the concept of HRM in China is not the same as in the West, despite its successful adoption. China has incorporated it in the new way of doing things. Thus, according to Shi (2010), HR experts in China are less engaged with the strategic activities and their role are also less strategic in comparison with their colleagues in the West. The HR measurement systems are also limited in function and HR information system is less automated and integrated. There is, however, a two speed system between the advanced HR systems of big State Owned Enterprises and smaller Local Private firms. Zhang (2012), states that such divergence feature as context-specific theories and practices of HRM can also influence the nature of Chinese management practices. Thus, there is an effectiveness of paternalistic leadership in companies of China. In addition, Zhang (2012) claims that the hybrid model of HRM from Western societies has integrated into Chinese HRM with its traditional values. Thus, social order is associated with the harmony at work; hierarchy is considered as a beneficial effect within an organization. Chinese employees do not give critical feedback or suggest improvements, which is a part of high-performance HR trait within a Chinese firm. As an important element of China’s political and economic reforms, modernization of managing people was connected with the handling of personnel administration by the government. However, in the reform, the practice of managing personnel was changed and the management and the power were given to the enterprises. In the modern context, the concept of personnel management and the practices with the strategic and human resource-oriented became more important (Songtao, n.d.). The development of China’s HR management was evolved with the administrative role of primary administrative concern and personnel files and archives management. Then it involved supportive roles with more human resource practices and strategic roles with the reference to the contributions to organizational objectives (Zhao & Du, 2012). While HR approach was one of the American frontiers and for certain period it remained unknown for the Chinese public, personnel management was the subject of main administrative orders with workers were considered as factors of production. Later HR approach was introduced to the public along with the Chinese theory. Chinese practitioners applied and implemented HR management into personnel management practices through recruitment, training, pay and performance procedures. China’s transition to the market economy has met certain challenges. In terms of HRM, these problems are connected with the adaptation of theories and practices to the businesses. Most firms are trying to adopt HR management policies and practices with the best practices; however that require executives’ capability to be improved. In addition, while businesses have conducted position management such as job analysis, there is still low level of normalization (Zhao, 2012). Strategic HRM practices relate to the organizational performance and include career opportunities, training systems, achievement-oriented appraisals, security in job and profit sharing. In terms of China HRM, over the last decades its economic reforms have brought changes in the human resource management practices (Akhtar, Ding & Ge, 2008). There were introduced labor contracts, performance-related reward systems and contributory social security. In addition, strategic HRM practices have been introduced to China’s state-owned enterprises and then passed through reforms in order to adopt best practices. Among the best practices implemented within China’s organization, there are the accurately defined duties that are evaluated in order to determine the level of compensation of an employee. After the Chinese enterprises reward system reform, the post wage system was the centerpiece of the job descriptions and included the basic wage and the wage determined by the job peculiarity. Ye and Ni (2013), state that performance management as another element of HRM best practices has receive its great attention to enhance government accountability through improving internal management efficiency, increasing government effectiveness and its responsiveness to the citizens. During the period of its development, the performance appraisal was changing. The vivid example of such change is the use of appraisal for the line workers and managers’ promotions. While the performance appraisal is widely practiced within the country, the evaluation criteria in the state-owned enterprise relates to the moral and ideological behavior (Wong, 2014). However, due to skepticism of performance appraisal as the result of lack of openness, transparency, influence and objective standards, its implementation was often resisted. The other component of best practices, the recruitment and retaining of qualified workers within China HRM is characterized by the country’s moves toward becoming a prosperity society with educated people, the career management of which has become an important part of human resources. Beechler and Woodward (2009), consider that in question of Chinese recruitment, much depends on its demographic driving forces that are the predispositions for labor pool supply. At the same time only 10% of Chinese graduates obtain their jobs in MNCs with necessary skills and qualifications. This explains why the country failure to produce those candidates that are needed. Despite this negative pattern, the country’s human resources strategies are directed toward the high-tech sector which provides many opportunities for development and constant learning and thus ensures productivity while employees’ stay. Tsui and Bian (2014), argue that there are many differences between the companies of different state ownership in China. Thus, the state-owned or government sector is more likely to pursue fewer goals where profitability is the main purpose of the organization. Social well-being of employees is much more necessary. Besides, firms within government sector may be damaged by serious agency problems since there is not always a single owner and not all the advantages of private sector can be available at public company. However, there are also advantages for public companies in terms of receiving loans from banks. In terms of HRM adoption, private companies are more likely to fully engage themselves in such practices, while for the state-owned firm such commitment is not necessary. With the implementation of new economy in China, the market economy, companies have quickly adopted Western HRM ways within Chinese business environment. Such tendency can be explained by the benefit from knowledge and experience they obtain from the modern HRM. Besides, companies are able to adopt new elements for HRM functioning and using them in practices (The development of human resource management in China: an overview, 2012). For example, Huawei Technologies, a Chinese multinational networking and telecommunications equipment company, employs more than thirty thousand people worldwide. Liu (2010) reports that the company implemented HRM practices in terms of performance management with the orientation on the result and striving to build a self-motivated and self-improving company. Its HRM practices include setting goals, appraising, coaching and communicating, managers support that lead to the improvement of employees’ performance. Huawei has also established strict achievement-oriented assessment system, where all employees of all levels are assessed and are rewarded according to the results of the assessment. As a part of HRM the company sets up its training system to enable its employees to develop themselves and contribute more for the benefit of the company. In terms of base pay, Huawei has developed its salary strategy which attracted more talents and what is more important it ensured the company to retain its high-qualified people. Within the modern commercial environment, where there exist high levels of competition and technological advances, China is among the leading countries in the world for its talented people and developed companies. This is because the country paid much attention to its personnel management and adoption of HRM best practices from the West. The more companies follow the good name of HRM, the more people they are able to find, recruit, develop and retain. References Akhtar, S., Ding, D. and Ge, G. 2008. Strategic HRM practices and their impact on company performance in Chinese enterprises, Wiley Periodicals, Inc. Beechler, S. and Woodward, I. 2009. The global war for talent, Journal of International Management, 15, 273-285, [pdf] Available at: http://bwl.univie.ac.at/fileadmin/user_upload/lehrstuhl_ind_en_uw/lehre/ss11/Sem_Yuri/JIM-talent.pdf[Accessed on May 8, 2015] Liu, Y. 2010. Reward strategy in Chinese IT industry, International Journal of Business and Management, Vol.5, No.2 Shi, W. 2010. HR Practices and Challenges in Chinese Firms: Comparison with Western Firms, [pdf] Available at: http://eprints.qut.edu.au/46238/1/Wei_Shi_Thesis.pdf [Accessed on May 8, 2015] Songtao, X. n.d. Chinas Public Administration Reform: New Approaches, [pdf] Available at: http://unpan1.un.org/intradoc/groups/public/documents/un-dpadm/unpan042433.pdf [Accessed on May 8, 2015] The development of human resource management in China: an overview, 2012. Human Resource Management Review, 22, 161-164, [pdf] Available at: http://www.researchgate.net/profile/Mian_Zhang2/publication/257471786_The_development_of_human_resource_management_in_China_An_overview/links/0046352dfcfc2196cc000000.pdf [Accessed on May 9, 2015]. Tsui, A. and Bian, Y. 2014. Chinas Domestic Private Firms: Multidisciplinary Perspectives on Management and Performance, Routledge Warner, M. 2013. Making Sense of Human Resource Management in China: Economy, Enterprises and Workers, Routledge Wong, Y. 2014. The Impact of Chinese Culture on performance management practices in foreign firms operating in China, University of Leicester, [pdf] Available at: https://lra.le.ac.uk/bitstream/2381/28921/1/2014WongYKAPHD.pdf [Accessed on May 8, 2015] Yuan, L. 2013. Traditional Chinese Thinking on HRM Practices: Heritage and Transformation in China, Palgrave Macmillan Ye, L. and Ni, X. 2013. Performance Management in China: In Pursuit of Accountability and Legitimacy, Center for International Policy Exchanges, [pdf] Available at: http://www.umdcipe.org/conferences/GovernmentCollaborationShanghai/Submitted%20Papers/Ye_Ni_Paper.pdf [Accessed on May 8, 2015] Zhang, M. 2012. The development of human resource management in China: An overview, Human Resource Management Review, 22, 161-164, [pdf] Available at: http://www.researchgate.net/profile/Mian_Zhang2/publication/257471786_The_development_of_human_resource_management_in_China_An_overview/links/0046352dfcfc2196cc000000.pdf [Accessed on May 8, 2015] Zhao, S. and Du, J. 2012. Thirty-two years of development of human resource management in China: Review and prospects, Human Resource Management Review, [pdf] Available at: http://parsmodir.com/bazar/components/com_jshopping/files/demo_products/HRM_in_China.pdf[Accessed on May 8, 2015] Read More

 

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