Strategic Human Resource Management, Firm Performance, and Employee Relations Climate in China - Term Paper Example

CRITICALLY REVIEWING “STRATEGIC HUMAN RESOURCE MANAGEMENT, FIRM PERFORMANCE, AND EMPLOYEE RELATIONS CLIMATE IN CHINA” Table of Contents Table of Contents 2 Introduction 3 Literature Review of the Current Paper 3 Methodology Used in Article 8 Result Discussion of Research Article 9 Conclusion 10 Reference List 11 Introduction Ngo, Lau, and Foley investigated link of strategic human resource management with conventional human resource policies adopted by firms in People’s Republic of China. In addition, they have contrasted performance of many firms and employee relations policies. Researchers cited many experimental results related to various Chinese organisations and different industries (Ngo et al., 2008). This paper outlined that, strategic human resource management policies are used very less in state-owned enterprises. Foreign direct investment enterprises and privately owned enterprises are using strategic HR policies rapidly than the other organisations and firms. Researchers have outlined several practises of strategic human resources management and HR management policies and impacts of such policies on performance of various firms of China. Ngo, Lau, and Foley, has contrasted SHRM and HR policies in terms of ownership structure (Ngo et al., 2008). Literature Review of the Current Paper Integration of SHRM and HR practices in the ownership or management structure will increase operational efficiency, financial performance, and employee management. Researchers have outlined feasible strategies for organisational performance. In addition, researchers have developed investigation on various SHRM practises on the expansion, acquisition, and employee motivation strategies. In the page 74 of research paper, strategic HRM is recognised as the key HR strategy in terms of increasing organisational efficiency (Armstrong and Armstrong, 2000). Activities of HR managers are modified to increase competence of employees. HR managers must adapt performance appraisal policies to motivate efficient and performing employees. However, compensation of employees and improvement programs are essential to maintain employee relationship and motivation. Managing employee behaviours is one of the major strategies that will be followed by the HR managers. Globalised firms are increasing use of long-term strategies so that they are able to achieve objectives, growth and sustainability in the competitive firms. Ngo, Lau, and Foley, reported that strategic human resource will align different functions of the employees in order to competitiveness of the firms. However, growth and sustainability strategies of the firms are depending on employee’s performance as per predetermined goals (Armstrong and Armstrong, 2011). Researchers have investigated on the HR practices adopted in the developing countries. Effective HR policies will increase the competitive advantage of the firms in global and open economy. Internal control will be imposed on the employees with the help of effective HR practices. However, major objective of the HR managers are increasing knowledge base of employees, skills set, and inspire the employees to work more efficiently. Mainly, human resources development will increase competencies of different organisations (Chadwick, 2005). Strategic HRM policy provides sufficient training to existing and new employees for increasing skills set and knowledge of employees and organisations. Compensation policy plays crucial role attract and motivate employees or human resource of the organisations. Researchers have outlined strategic human resource policy to ensure performance appraisal and role promotion exercises. These policies will help organisations to reduce the staff turnover and retain skilful employees. Research report of Ngo, Lau, and Foley, cited that the there is positive connection among the internal control policies of HR managers and organisational performance (Chen, 2009). Ngo, Lau, and Foley, in their research investigated on the conventional and strategic HRM policies adopted by the different organisations and firms in China. The country is one of the major developing Asian countries facing the challenge of financial crisis in the year 2008 and 2009. Chinese government imposed different type of economic reformation strategies to increase the possibility of efficient financial performance. Researchers have outlined the HRM policies of China to develop organisational performance (Gennard and Judge, 2002). They outlined the dominating role of “state-owned enterprises” in the Chinese financial system. These types of firms are imposing more strategic control on the operational and management policies. HR managers are empowering conventional traditions of the employees and other stakeholders. In addition, “Chinese state-owned enterprises” are implementing communist philosophy to create more interaction among employees and management (Jacobs, 2013). Researchers also defined Strategic HRM policy of Chinese firms; they contrasted organisational culture with the use of socialism and Confucianism. On the contrary, Ngo, Lau, and Foley, have reviewed the hierarchical management system, synchronisation in the internal perspective of organisational group, and employee loyalty provisions in Chinese firms. Nevertheless, it was observed that the Chinese government is imposing strong bureaucratic control on the organisations and HRM system. State-owned enterprises have reformed their HR policies by implementing more job security and lifetime support for employees, promotional policies as per employment tenure and salary based appraisal (Kramar, 2013). According to the researchers, “iron rice bowl” system of employing peoples in Chinese firms is effective enough. Mainly this system will offer the employees’ with various welfare programs. On the contrary, researchers have improvised on the equal opportunity provisions in the appraisal system to create workforce stability. Although, researchers can be criticised for their opinion as the economic environment of China is making this strategy less feasible (Mahoney, 2000). Ngo, Lau, and Foley, denoted that “open-door policy” of the Chinese government increased the rate of foreign-investment is developing certain enterprises. Chinese economy have faced high amount of foreign cash or investment inflow during the last 20 to 30 years. Western firms are mainly adopting the “mainstream practices” in human resource management policies. They are emphasising more on policies of performance appraisal, effective compensation provisions, and they are providing exclusive training and development program for the new recruits and existing employees. Researchers also stated that there should be lower administrative control imposed by local and national governments. These policies will increase the efficiency among the firms to design innovative HR arrangement for increasing the performance (Mello, 2002). Ngo, Lau, and Foley, also justified their statement regarding the contrast of various HRM policies in respect of the performances of firms in China. Mainly, this report was cited by an extensive survey made on the HR managers of various firms of China region. Researchers have justified their selection of the strategic role for the HR managers. It can be said that in the reforming economy of the China, human resource management must be emphasising various economic restriction. Firm’s performance can be eventually controlled by HR managers with respect of operational objectives and performance objectives (Minbaeva, 2013). Foreign contributory organisations of China will get the positive impacts of performance based human resource polices. Performance of the employees is cross checked with different type of benchmarks. However, Chinese multinational corporations have been observed with lower compatible HR strategies. Report stated that Chinese firms have reported lower performance for the ineffective strategic management of the HR managers (Ngo et al., 2008). Ngo, Lau, and Foley, also developed contrast of the hypothetical and empirical facts in the page 76 of the article. They stated that strategic HR management and conventional HR practices are impacting the firm’s performance. However, SHRM process implementation will face certain complexity in terms of the ownership structure of the firms in China. Both financial and operational performance of any firm will get affected by the strategic management policies. Moreover, friendly atmosphere and employee relations environment will aid the organisations in developing their performance (Nolan, 2008). In the current research report, researchers have used hypotheses testing to outline more quality. Researchers mainly investigated basic differences among the strategic human resource management and conventional human resource practices in the Chinese firms. Null hypothesis will outline the impacts of the ownership structure in adopting strategic HRM and conventional HR practices in the Chinese firms. Foreign investment enterprises are using more innovative practices. This key theme will provide proper idea of the HR strategies that are adopted by the Chinese based firms (Nolan, 2010). On the contrary researchers have used the segmented hypothesis to create more effective analysis of the research topic. The researchers aimed to justify the use of strategic HRM practices increasing the performance of the firms. In addition, they stated that employee relations will gradually increase implementation of various proper HRM strategies. Researchers have designed the hypothesis testing quite well as they are linking all the aspects of the study topic (Nolan, 2013). Ngo, Lau, and Foley, in their report investigated on the interface effects of ownership in adopting different strategic and conventional HR practices. In the report researchers have justified the significant difference among the procedure of human resources management procedure as per various ownership structures. In addition, this difference is observed as per the industries, and geographic areas of China. Researchers also stated that impacts of HR policies will differ from firms and organisations. Performance of the firms of China also gets affected by the employee’s relationship factors. Chinese joint ventures are enjoying more favourable or positive relationship among employees rather that state owned firms (Ngo et al., 2008). HR policies of the globalised market are increasing the control of the internal and external incident or uncertain risk factors. However, Chinese firms are facing the challenge of the political pressure in developing a feasible HR policy. Bureaucratic structuring is another threat for efficient human resource development policy. This type of organisational structure will reduce the elasticity of supervising people in the Chinese economy (Park and Kim, 2010). Methodology Used in Article Ngo, Lau, and Foley, outlined the data collection method in terms of gaining more insight on the SHRM and HRM polices in the Chinese firms. They used survey method on more than 600 Chinese firms to gather the review of HR policies adopted by those. Mainly this research surveyed the firms of the Beijing, Guangdong, Shanghai, and Sichuan areas. Moreover, firms belong to various industries and have different types of ownership structure (Stewart, 2010). They conducted the research survey with the help of National Bureau of Statistics of China during the year 2003. Researchers have selected the firms which are listed by the government of China. This sampling increased the feasibility of collecting data regarding the SHRM and HRM policies adopted by various Chinese organisations. 161 state-owned enterprises, 120 foreign-invested enterprises and 228 privately owned enterprises are selected and majority of those organisations are manufacturing products. Therefore, contrasting strategic human resource along with firm’s performance is made with higher quality (Phillips, 2011). Result Discussion of Research Article Ngo, Lau, and Foley has used ANOVA testing method to outline the statistical results of survey. Different type of result variables are used by the researchers to gain higher insight. Firms financial performance and HR polices are contrasted on the basis of industry averages scores. From the table 11 of page 82, financial results of the state-owned enterprises, foreign-invested enterprises and privately owned enterprises are outlined on the basis of growth of sales, industrial share, net profit, and return on investment (Ngo et al. 2008). In the table iii of the page 83 researchers contrasted different type of descriptive statistics along with the correlations of different variables have stated that Heavy Manufacturing firms are having high end records in respect of light manufacturing policies (Ngo et al. 2008). State or national government possessing firms are having lower efficiency than FIE firms. However, Privately Owned enterprises have lower efficiency than the other two types of ownership structures (Ngo et al. 2008). Conclusion In the current report the article of Ngo, Lau, and Foley, have critically reviewed in terms of gaining more knowledge. Researchers have contrasted the SHRM policies along with Chinese firm’s performance. They have justified the impacts of changing economy on the HR practises. From the study I observed that foreign investment firms are more efficient in utilising SHRM practises than the local firms in terms of increasing the performance. Finally, with the help of the attributes of the study it can be said that human resource management practises are having higher impacts on performances of firms by developing sound employee relationship. Reference List Armstrong, M. and Armstrong, M., 2000. Strategic human resource management. London: Kogan Page. Armstrong, M. and Armstrong, M., 2011. Armstrongs handbook of strategic human resource management. London: Kogan Page. Chadwick, C., 2005. The vital role of strategy in strategic human resource management education. Human Resource Management Review, 15(3), pp.200-213. Chen, C., 2009. Strategic human resource practices and innovation performance: the mediating role of knowledge management capacity. Strategic Direction, 25(6). pp.259-281 Gennard, J. and Judge, G., 2002. Employee relations. London: Chartered Institute of Personnel and Development. Jacobs, S., 2013. Trust in the performance currency. Strategic HR Review, 13(1). pp.697-699 Kramar, R., 2013. Beyond strategic human resource management: is sustainable human resource management the next approach? The International Journal of Human Resource Management, 25(8), pp.1069-1089. Mahoney, J., 2000. Strategic Human Resource Management. Academy of Management Review, 25(3), pp.677-679. Mello, J., 2002. Strategic human resource management. Australia: South-Western College Pub. Minbaeva, D., 2013. Strategic HRM in building micro-foundations of organizational knowledge-based performance. Human Resource Management Review, 23(4), pp.378-390. Ngo, H., Lau, C. And Foley, S., 2008. Strategic Human Resource Management, Firm Performance, And Employee Relations Climate In China. Human Resource Management, Vol. 47(No. 1,), pp.73-90. Nolan, S., 2008. Realizing efficiencies through HR policies and practices. Strategic HR Review, 7(2). pp. 191-197 Nolan, S., 2010. Cultural Differences and Improving Performance. Strategic HR Review, 9(4). pp.798-799 Nolan, S., 2013. High performance organizations. Strategic HR Review, 12(2). pp.921-937 Park, H. and Kim, G., 2010. Korean firms strategic choice and market performance in China and Russia. International Journal of Trade and Global Markets, 3(2), p.170. Phillips, L., 2011. HR strategy to deliver business performance. Strategic HR Review, 11(1). pp.369-371 Stewart, P., 2010. Employee relations. Bingley, UK: Emerald. Read More