Human Resource Management Practices in China and the UK - Essay Example

HRM practices in China and the UK Place Introduction As of 2006 there are seventy-seven thousand transnational corporations and more than seven hundred and seventy thousand foreign affiliates, employing altogether sixty-two million people worldwide (Dowling, Festing & Engle, 2008). These numbers are only one of many features, which show the extent of the globalization of business, the role of human resource management in which is increasing. This role is added more complexity due to the differences in HRM and international HRM approaches, where the last relate to the management of people in the international context and require more thorough strategic considerations of the Multi-National Companies. These are the trade negotiations in terms of labor legislation, international taxation and selected training and expatriate management (Sengupta, 2007). While the field of international HRM includes such approaches as the emphasis on the cross-cultural management, comparative industrial relations and HRM literature and aspects of HRM in multinational firms, the following paper will discuss the national differences in HRM between China and the UK. It will also compare, contrast and evaluate Human Resource Management in these countries, in particular the resourcing and talent management, reward and employment relations, will also speak about cross-cultural training and performance management. The paper will illustrate examples of HRM practice and evaluate the extent to which convergence and divergence between China and the UK are possible. Culture and IHRM With the openness of boarders, companies across the world have started to pay more concerns as to what factors affected the abilities of nations and the business to better adapt to the new economic and social changes in order to be more achievement-oriented (Schuler, 2000). Thus, different national cultures appeared to have different HRM implications, which are the integral part of each company’s striving to gain a competitive edge. However, one of the challenges that organizations collide with during the globalization of their operations is the adaptation of HR practices to the new and different cultures and the creation of operation manners to suit both comfortable and appropriate to the organization and those cultures. This challenge is the greatest and the central for all multinational organizations (Tiwari, 2013). The globalization has created greater numbers of areas in business, where the wide variety of cultures is represented in their workforce. With an attempt to treat each culture differently and with respect, there appeared practical issues in doing business, such as need to take into account the various religious and secular holidays and the official language of the workforce (Shena, Chanda, D’Netto & Monga, 2009). In fact, the cross-cultural management as a phenomenon can be applied toward an organization attempt to understand how to achieve the established goals through the effective planning, organizing, coordinating and controlling of the cross-cultural environment taking into account differences and similarities of the particular culture and overcoming the conflicts developed from these differences. It enables to understand how national cultures impact companies’ strategic decisions, leadership styles and HRM practices (Schneider & DeMeyer, 1991). HRM in China and UK: national differences The major goal of the HRM is to undertake all complexities tailored to operating in different countries. However, to compare and evaluate Human Resource Management in China and UK, it is essential to start with the discussing of the national differences of these two countries and how their HRM practices are shaped by national institutional and cultural factors. These are shared norms and expectations of a society, local government, social networks, social hierarchies, regional economic policy, markets, culture and history of China and the UK. Thus, China’s HRM system has been successfully developed as the result of rapidly growing economy and the patterns of the Western dimensions of HRM (Zhu, 2004). Apart of successfully adopting such distinctive characteristics as the individual performance evaluation, career development and ability to recruit and fire on, China has developed its new way of running the HRM. One of such new approaches was that the Chinese HR specialists were less involved into the strategic activities if to compare similar engagement with the experts from the West. In addition, the HRM was less open in function and less HR information became integrated (Shi, 2010). Another new trait of HRM initiatives was the social order and the hierarchy, considered as a beneficial effect of most Chinese companies. Thus, employees were not supposed to give any critical feedback and ideas on improvements. However, due to the China’s political and economic reforms, changes in HRM appeared to be more connected to the handling of personnel administration done by the government. And in the modern context, the personnel management was returned to the enterprises and the strategic and human resource-oriented practices became more essential (Wang, 2010). Comparing to the Chinese approach of managing HR functions, the UK practices are more flexible and have been more organisationally contingent. In fact, the history of HRM in the UK displays the changes in its priorities and its activities were reinvented constantly by the system itself. These changes were tailored to the external socio-economic factors, which were beyond the HR practitioners or senior managers’ control (Warner, 1997). Such trend can be partially explained by the regulatory activity of the UK government, however, a number of factors have also appeared to influence the rise of the regulatory state and in HRM as well. These included the UK membership in the European Common Market and then in the EU, the decay in trade unionism decreasing unemployment and political expediency (Gold, Holde, Iles, Stewart & Beardwell, 2013). The evolution of personnel management is well-known in UK, starting before the WWI and changing its focus on the labor management and staffing allowing the employers to promote a welfare approach in managing people and attempting to improve the conditions of work. Additionally, the human bureaucracy has also influenced managerial practitioners along with the period of negotiated consent, which was fostered by personnel and industrial relations managers (Brunstein, 1995). Moreover, within the HRM there have been developed such directions as shared services, centers of expertise, vendor management and corporate HR (Holley, 2009). Thus, the services undertook the HR administrative tasks and provided information for the clients employing good interpersonal, customer service and team management skills. The HR roles varied greatly from business partners to senior HR managers, all working with the business units on strategic development of the company. The centers of expertise provided support to business partners, developing the detailed policy for corporate HR for people resourcing, employment relations, rewards, pay and learning and development. The vendor management handled pension administration, managed through service-level agreements. Finally, corporate HR had responsibility to develop HR and people strategy (Holley, 2009). Resourcing and talent management in China and UK The implementation of HRM practices across China’s companies was done through practices of recruitment, training, pay and performance. This, however, does not give the explanation why in this country there is a deficit of talents. One consideration can be connected with the companies demand for highly skilled workers and their striving to find exactly what they want, while there is a workforce mismatch and the inconsistent proficiency in the English language (Warner, 2013). In fact, the mismatch of skills has become one of the main barriers to the effective talent development in Chinese companies. The other component of resourcing is the recruitment of qualified people, which is characterized by China’s move to the prosperity society where educated people will have more career opportunities and will be managed appropriately (Devonshire-Ellis, Scott & Woolard, 2011). Here much depends on the demographic forces which create conditions for labor supply. In terms of talent management, China despite the huge population and social factors experiences shortage of the quality of labor, where only 10% of college students have the needed requisite skills for roles in the multinational companies. Such unfavorable conditions for China can be explained by such factors as Confucianism, where the importance of hierarchies exists and which underpins the relationships of roles within the organization. The other factor influencing the talent management in China is the “iron rice bowl” legacy, which refers to people’s encouragement to have one stable job for life, while it is a complicated thing considering globalization of businesses (Into China page-up people research, n.d.). While in other countries such as the UK there is a “thicker skin” to maintaining of the self-esteem, Chinese society is educated to protect their reputation and stand of other. Such saving face is essential in the HRM as well if to consider professional relationship and cultural reality. The other difference of China’s talent management comparing to that in the UK is the doctrine of the Mean, which can be explained by the need to avoid extremes and to exercise moderation in business. In the UK, developing, managing and retaining of necessary people is part of a planned strategy for talent management, where the equality is important, as well as the return on this investment. Many companies are broadening their definitions, seeking for talents and working on ways how to develop their strengths (Price, 2007). In terms of the connection between the employer and employee within Britain organization, there is an organizational commitment and intrinsic job satisfaction within the HRM practices, where employers identify the existence of these practices and the employees are telling whether they are satisfied with them (Wood & Bryson, n.d.). Reward and employment relations in China and UK According to the findings of Akhtar, Ding and Ge (2008), there had been considerable changes in the practices of HRM in the last decades. They refer to the labor contracts, performance-related reward systems and other social guarantees provision. Moreover, for better adoption of HRM practices, strategic HRM practices were introduced to China’s state-owned enterprises, which enable to accurately define and evaluate the level of compensation of an employee. Ye and Ni (2013) considers that the Chinese enterprises’ reward system reform have opened more opportunities for employees to use these favourable incentives in the job descriptions and include the basic wage and the wage determined by the job because of the reform. Thus, the appraisal for the line workers and managers’ promotions is the most noticeable moment in Chinese HRM system. Wong (2014) states that the evaluation criteria in the state-owned enterprise leads to more moral and ideological behavior within the country as the performance appraisal is widely used. In comparison to China, the British reward and employment relationship influence greater employees’ lives, where, however, the economic, political and social issues capture not just business performance, but also personal development opportunities, family and the social welfare. Such importance can be partially explained by the emphasis on the role of trade unions and collective bargaining in the regulation of UK (Sisson, 2008). Along with the appearance of the new employee relations, the concept of new pay taken from the UK has created the base for a distinctive philosophy. Known as the reward management or the employee reward, it came to change the traditional pay, where the contribution and competence of an employee was taken into account rather than the compensation for attending work (Hollinshead, Nicholls & Tailby, 2002). In China, the reward system reform was started in 1978, which included the reinstatement of piece-rates and bonuses. Then in 1985 the system was changed into structural wage system, similar to the one in the UK. It was also knowledge based and required an employee to be simply involved in the working conditions. The flexible and fixed wages came in the mid-1990s, separating the types of public services (Kiewiet, 2009). In the current time, both in UK and China, compensation and benefits packages play the main role in employee’s decision to stay or leave the current work. Cross-cultural training and performance management The cross-cultural business is usually characterized by the unfamiliar languages and unique system of values, beliefs and behaviors. Besides, such cross-cultural risk arises due to the diverse cultural heritage of those involved. To better manage these differences, there is a need to conduct the cross-cultural training. As stated (Cavusgil, Knight & Riesenberger, 2007) nowadays, most companies require their employees to be aware of the cultural peculiarities of their colleagues and acquired the degree of the cross-cultural proficiency. These training practices include the group meetings which aimed to build a harmony and team spirit at the beginning of every working day. China is one of those countries where non-verbal messages and view communication serve to promote harmonious relationships with an indirect and polite face-saving style. Instead, demonstrating impatience and frustration disrupts harmony. For those managers who obtained an opportunity to work in China, it is critical to be aware of the cultural characteristics of this country in order to manage effectively their duties. Thus, Lund (2013) states that in promoting effectiveness in cross-cultural contexts, a positive adjustment experiences influence the capacity to be a good manager, which will avoid arguing and use one’s previous experience to manage personnel. Awareness in British business characteristics is based on the sense of identity and nationalism, where English businessmen tend to be matter-of-fact and are oriented on the deadlines during business negotiations. Consequently, training in cross-cultural etiquette will help managers to cope with the differences. The particular knowledge should include the cultural sensitivity, understanding of the importance of maintaining business relationships and impression management. Thus, according to Okoro (2012), the in-house language and culture classes and training sessions to all company staff ensure other people tp respectfully manage the employees from Britain or be a part of the business environment in the UK. In terms of performance management, UK companies are among the best in their ability to attract and retain talented people, suggesting that UK managers are able to adopt self-critical approach and are prepared to address the underperformance tasks through training and practice. In China, there is a strong awareness in how an effective manager should act. Performance management within the companies of these countries usually involves the rewarding good performance, which help to identify and deal with the poor performance. Such characteristics are involved in managing relationships and which assist in solving people’s problems, deal with poor performance and manage individuals. The following figures display the best attributes of the effective managers of both countries (China vs The World, n.d.). Figure 1. China top five characteristics of good managers (China vs The World, n.d) Figure 2. UK top five characteristics of good managers Multi-National Companies and HRM The effects of globalization are vividly seen in the way Multi-National companies have improved their presence in the world market. They are now playing the central role in the economic activity, developing the new forms of trans-national management organization (Edwards & Miao Zhang, 2003). With the centrally planned economy, China introduced a competition into the domestic market along with the government incentives to encourage companies to internationalize. Now Chinese MNCs are moving toward exporting products and materials to investing in the developed countries such as the UK. Despite the cultural differences between these countries, there is a great importance to dispaly how these countries add values to each other when making common business. Edwards and Miao Zhang (2003) state that in UK management cultural values refer to the country’s high attention on individual and moderate way of power distance, while in China the culture is described as high on the power distance, low on individualism and high on masculinity. Thus, for China obedience and collectivism are most used characteristics. Consequently, harmony in management-employee relationship is dominant in China and adversarial relationships are peculiar to the UK. It is specific for the UK MNCs to implement the transferred diversity management policies as the best adaptations with practices to be highly comprehensive and concrete and which include global corporate value programs, organizational structures designed to assist diversity initiatives and global target setting as well as international diversity training (Dickmann, Brewster & Sparrow, 2015). The vivid example that shows such HRM practices can be seen through operation of Tesco, a British multinational food retailer, which encourages young enthusiastic farmers to make their contribution to the industry in the way of confident start in the agricultural sector and embarking the new farming venture (News releases, 2015). It also invests in people through providing education and obtaining skills for the long-term commitment. It is one of the few companies that provided beneficial pension scheme. China’s well-known multinational company is Lenovo Group. Recognized as the leading employer (Maintaining High Ethical Standards, 2015), Lenovo follows such HRM practices as applicable minimum wage requirements in the countries it operates, acting responsible toward its employees and focusing on creating and maintaining a perfect workplace. Conclusion Effective HR functioning is critical to every company’s striving to formulate and deliver its business objectives and promote appropriate HR activities. To reach this, HR managers should realize that business they work in is influenced by the various market characteristics, which can be as driving forces as obstacles within the sector. Hence, a clear understanding should be present in realizing of how to handle these forces. These are not only political and economic conditions but also cultural specifications that can shape organization’s business strategy and positively impact performance goals and drivers. For that purpose, HR practitioners should draw on insights how to influence decisions at strategic and individual levels and address these insights to senior managers to influence companies. An emphasis should be put on the cross-cultural management and practices to apply toward employees-employers’ relations. Based on the findings across numerous literature units, this paper tried to identify, discuss and evaluate the national differences in HRM practices and view between China and the UK. An effective use of knowledge obtained will enable to understand how companies of these two countries can manage diverse workforce and how it is better to handle the diverse employees. 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. 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