Human Resource Management in Taiwan - Research Paper Example

Running Head: HUMAN RESOURCE MANAGEMENT IN TAIWAN Human Resource Management in Taiwan of the of the Human Resource Management in Taiwan Introduction In an era of striving for excellence, human resources become a crucial source of competitiveness. Lorange (1994) said that a major issue of current management is motivation of each employee to explore new opportunities. Sue (1994) concluded from business interviews that Manpower is the competitive advantage. No matter how effective the technology and process are, people are the final performers. Pfeffer (1995) reported that the five best performing firms from 1972 to 1992 in the USA relied not on technology, patents or strategic position, but on management of their work-force for sustained advantage. In a global economy with fierce competition, the role of human resource management (HRM) becomes increasingly critical. Among various functions, human resource planning (HRP) and human resource information systems (HRIS) are two areas that greatly enhance the effectiveness of HRM. Wagel (2000) reported that human resource practitioners and scholars had predicted a more aggressive use of forecasting, more human resources input into the decision-making process and an increasing utilization of computer technology to compile and analyze data in the 1990s. HRP is a formal process of linking business strategy with human resource practices (Smith et al, 1993). It directs such practices as recruitment and selection, training and development, performance appraisal, compensation, etc. Chang (1993) wrote that planning is the primary task of a human resource department In an information age, HRIS is attracting increasing attention. Richards- Carpenter (1991) stated that If the personnel function is to take the next big step in its development, it will have to integrate with information technology. To probe the future development of HRM in Taiwan, HRP and HRIS are particularly emphasized in this work. Human resources remain the most precious asset of Taiwan. Over the past forty years, diligent and well-educated people have created Taiwans outstanding economic growth (e.g., Chao, 1996). An industrial survey published by Strategic Productivity in May 1991 showed that human resources are ranked as the most important factor affecting the competitiveness of enterprises in Taiwan. In future keener competition, companies will depend more on competent, innovative and motivated employees for quality, service and technology. With such understanding, the effectiveness of the management of human resources is being pursued in Taiwan. Research Question Prompted by the above observations, this research study is attempt to seek guidance to improve management of human resources in Taiwan particularly with respect to HRP and HRIS. Our inquiry is devoted to answering the following questions. 1 What is the present focus of human resource management in Taiwan? Will there be a shift of focus in the near future (five years)? 2 How is planning of human resources conducted in Taiwan? What contributes to the success of such planning? What hampers such planning? 3 To what extent are HRIS being utilized? In what HRM areas do enterprises expect to advance their degree of computerization in the near future (five years)? 4 What should be done to improve management of human resources in Taiwan? The expected contribution of this work is three-fold. First, it will provide guidance to advance the management of human resources in Taiwan. Second, it will help with the understanding of the management practices of an emerging business entity, foreign direct investments (FDI), based in Taiwan. Statistics show that in 1993 Taiwan was the major foreign investor in Vietnam, the second most important in mainland China and the third in Malaysia (Lee, 1994; China Times, 25 September, 1994). Third, it will enrich literature on economic activities in the Pacific region. Hofstede (1993) pointed out that The little dragons - Taiwan, Singapore, and Hong Kong - are moving from rags to riches and now counted among the worlds wealthy industrial countries, yet very little attention has been paid to the way in which their enterprises have been managed. The aggressive outbound investments of Taiwanese enterprises, particularly in the Pacific region, will have a substantial impact on economic development of the region. The results of this work are intended to provide references both for local firms and for those who are interested in this region. Human Resource Planning Human resource planning (HRP) is the process or system of applying the correct number of qualified people to the appropriate task at the appropriate time. It analyzes demand and supply of human resources in order to define the needs (Sherman and Bohlander, 1992). Russ (1992) stated that it is the system of matching the internal(existing employees) and external (those to be hired or sought) supply of human resources with openings the organization expects to have during a given period. With HRP, employees can be of greater help to management and to themselves by contributing to placement, promotion and development. The importance of HRP is clearly stated by Ferris et al. (1990) that The most important contribution that a formal planning process can make is in fostering a long-term orientation and strategic vision of the firm. It prompts organizations to constantly monitor the external environment and thus improve the degree of fit between the environment and the organization. With such characteristics, HRP enables companies to position HRM strategically. In Taiwan, HRP is still in its primitive stage (Chu et al. 1992). The following reasons may partially explain the lag of HRP. First, a dominant type of family business and nepotism (Redding, 1993; Silin, 1996) in the past relaxed the need for HRP. Second, the characteristic of a short-term orientation in Chinese firms reported by Redding (1993) and Silin (1996) may be a disincentive for conducting HRP. In a relatively stable environment, traditional staffing practices were not a problem. However, recent intense competition and the pressure for globalization have prompted Taiwanese enterprises and researchers to re-examine the past practices. Recognition of the importance of HRP is reflected in management comments that organizational structure and human resources deployment are the critical issues for organizational growth and development (e.g., Peng, 1993; Yang, 1993). In academia, research in this regard is emerging. However, the studies are mainly on a conceptual level. Empirical studies were generally confined to marking a list of items pre-described by researcher(s), which limits the information, particularly for exploratory work Human Resource Information Systems Human resource information systems (HRIS) is the system used to acquire, to store, to manipulate, to analyze, to retrieve and to distribute pertinent information regarding an organizations human resources (Kavanagh et al., 1990). It is increasingly recognized as a crucial determinant of effective HRM and a strategic advantage. Broderick and Boudreau (1992) commented that information technology has enormous potential to make human resources more competitive. Mcelroy (1991) stated that HRIS is the change agent of organizational effectiveness; it provides a company-wide access to data in a real time, interactive manner. Improved human resource information leads managers to question how head count, turnover, skills inventories or performance ratings affect their units business objectives and how human resource managers, with line managers, can more effectively hire and train employees to optimize these objectives (Broderick and Boudreau, 1992). The human resource executive of Federal Express believes that, now and in the future, excellence in HRM could be defined through strategic use of information (OConnell, 1994). Research on HRIS is scarce, but cases of successful implementation are abundant HRIS helped Mobil Corporation select among several major work-force relocation alternatives to meet Mobils targets of decreasing costs. NCR successfully developed a computer application that shows how decisions about hiring and training in sales units can affect sales revenues and profit (Broderick and Boudreau, 1992). National Semiconductor Corporation also reported internal paperless job search programs that enable employees to bid on jobs see job openings and apply by computer (Stevens et al., 1991). Beyond interactive and paperless operations, it enables users to analyze, to synthesize and to generate information in supporting decision making (Kavanagh et al., 1990). In Taiwan, the benefits of information technology are being pursued. It enables both management and employees to exploit information for effective management. Although the importance of management information systems has been recognized, HRIS is a less developed area in Taiwan. Scanty literature touches the topic of HRIS and no research report is available. Human Resource Management Human resource management has been greatly affected by organizational reforms such as downsizing and restructuring in some Western countries during the past decade. Numerous projects have been conducted on improvement of HRM in order to thrive and to survive in a competitive environment (e.g., Kelley, 1999; Schneider and Bowen, 1993; Walker et al., 1999). HRM is attracting increasing attention in Taiwan. The past advantage of Taiwan - industrious and well-educated people - can no longer be sustained. With keener global competition, effective HRM is needed to guide human efforts. As a result, the impetus to explore theories and practices of contemporary human resource management was great Discussion and literature regarding human resource issues is apparently increasing, but most literature is at a conceptual level. Research in Taiwan on the management of human resources is devoted mainly to individual functional operations, such as compensation, performance appraisal, training, labor relations, etc. Probes of future development and improvements of HRM for strategic implications are not yet reported. Therefore, a future perspective is essential to guide the advancement of human resource management in Taiwan effectively. International Human Resource Management for Expatriates Taiwanese firms, particularly for the computer and semiconductors businesses, are still attaining a growth turnover rate by lowering their manufacturing costs while most of worldwide organizations are affliction from global economic recession. Research shows that, along with the three dimensions of International Human Resource control, only behavioral and productivity controls are used openly to take action to the deliberate need for cost/efficiency struggle. Most Taiwanese organizations investing in China are in the full-grown stage of a merchandise life cycle. Therefore, the focal point of their investments in China is on production and cost value. Because of the intensely rooted environment of the ‘iron rice-bowl’ structure in China, employees are used to the operational style of ‘working hard or not, take the same pay’ (Cooke, 2000). This operational culture harms cost effectiveness approach a lot. Because of the resemblance of Chinese society and language, Taiwanese organizations started behavior control through Taiwanese expatriates in the form of precise behavior assessment but in a deferential way. For example, expatriates of well known Food Company have to be appropriate the same principles of behaviorally alert appraisal as local employees. Housing for Taiwanese expatriates is presented by the corporation, but expenditures on caretaking, cookery and private telephone bills have to be shared by the expatriates themselves. The company optimism this capacity have an established effect on local workers. Human Resource Training and Development Training and development have helped tap human resources in Taiwan and contributed significantly to Taiwans economic success. Although training and development are continuously emphasized, research results indicate much scope for improvement Suggestions include increased training for professionals and management, particularly top-level management, training on ethics, etc. In this variable world, personnel in human resources should initiate training and development that align an employees and organizational objectives to cope with the dynamics of society. HRP in Taiwan is in an early development stage. Analyzes of human resources put more emphasis on demand with a seeming negligence of analysis of supply. Further investigation indicates that analysis of annual human resource supply significantly accounts for the variance of HRP success. Respondents perceived that the external factors of a varying business environment and unstable labor supply are major obstacles to HRP. The results seem to disclose a prevailing sense of lack of power. The finding also urges a re-examination and improved integration of various HRM functions to solve problems such as lack of specialists, high employee mobility and incompetent supervisors. The application of HRIS is observed mainly in connection with operational tasks. The institution of computerization is expected to take a great stride in the future, particularly in the areas of HRP and environmental analysis. This movement may indicate the shift from a reactive approach to a more proactive and future-oriented practice. For general improvements of HRM, external agencies such as a human resource society, government or educational institution also have their roles in facilitating effective HRM in Taiwan. A pertinent finding is a strong demand for liaison opportunities through a human resource society. Contrary to past competition and a defensive mentality towards competitors, a mutually beneficial situation is promoted. Human resource practitioners regard other organizations as important sources for advanced management of human resources. They long to share relevant information, to exchange expertise for joint training, for cross-training and so on. This transition is enlightening. As human resources are regarded as a future competitive advantage (e.g., Pfeffer, 1994), liaisons may help enterprises to improve their HRM and to enhance the total competitiveness of Taiwan in the world market. Internally, although suggestions for functional improvements ranked higher, the necessity of altering attitudes regarding recognition of die contribution of a human resource management, organization development and strategic HRP is also featured. Further demands on draining and development and career issues reflect a need for a more employee-centered HRM. Practitioners should apply increased thought to the alignment of employee goals and organizational goals to motivate and retain a qualified work-force in order to achieve high performance. In general, research study reveals that HRP should be the major future HRM concern. HRP should be more effectively implemented in a varying environment with increased emphasis on analysis of human resource supply. Practitioners should utilize information technology more extensively to advance analysis of planning and decisions. To improve HRM, organizations should also take care of the needs of employees to grow as well as to accomplish the organizational goal. A human resource society, government agencies and educational institutions should also play active roles to advance the management of human resources in Taiwan. Implications Two main implications can be drawn from the research. First, HRM in Taiwan needs operational advancement there are some technical bottlenecks. For instance, HRP in some companies seems to be on hold because of an unstable labor supply and a varying business environment. Therefore, ways to overcome constraints and to develop a workable HRP need to be explored. Concentration on analyzes of demand for human resources with less attention to the analyzes of supply is another flaw. The stated impediments to HRP seem to indicate excessive emphasis on the quantity of human resources available to fill vacancies promptly. The quantity problem may be partially solved by constant monitoring of internal human quality and human process improvement for timely employee and organization development. Other issues, such as improved integration of various functions about human resources, improved utilization of information technology to support decisions, etc., should be extensively probed. Second, HRM in Taiwan needs a more global perspective. This research study poses a list of questions such as whether systems to manage overseas people are established, whether HRM offshore is on managements agenda, whether a human resource department has staff to mind these matters and so on. Go international is crucial to Taiwans continuous economic growth. A sound international HRM system facilitates overseas success as exhibited in USA and Japanese overseas operations. Therefore, this issue is worthy of further contemplation. Research based on manufacturers and service firms may provide guidance for the advancement of human resource management in Taiwan. Expected future efforts towards increased planning, better utilization of information technology and a more strategic perspective are encouraging. Challenges remain, ranging from functional improvements, integration of various human resource management functions, organization development, more human concerns, recognition of the contribution of human resource management, a global perspective of human resource management and so on. Only with the co-operation of all parties concerned can the management of human resources create a sustained advantage for enterprises in the coming century. References Broderick, R. and Boudreau, J.W. (1992) Human Resource Management, Information Technology, and the Competitive Edge, Academy of Management Executive, 6(2): 7-17. Chang, H.C. (1993) Manpower Planning and Selection", Occupational Training, 11(6): 35-41 Chao, Y.T. (1996) American and Japanese Management Techniques in an Asian Setting, Industry of Free China, January: 1-12. Chu, CM., Yang, C.C. and Chang, K.C. (1992) The Analysis of Applying Human Resources Planning to Taiwan Enterprises, Journal of Human Resource Development , 2: 1-15 Cooke, F.L. (2000) ‘Manpower Restructuring in the State-Owned Railway Industry of China: The Role of the State in Human Resource Strategy’, International Journal of Human Resource Management, 11(5): 904–24. Ferris, G.R., Russ, G.S. Albanese, R. and Manocchio, JJ. (1990) Personnel/Human Resources Management, Unionization, and Strategy Detenninants of Organizational Performance, Human Resource Planning, 13(3): 215-27. Hofstede, G. (1993) Culmral Constraints in Management Theories, Academy of Management Executive, 7(1): 81-94. Kavanagh, MJ., Gueutal, H.G. and Tannenbaum, S.I. (1990) Human Resource Information Systems: Development and Application. Boston, MA: PWS-Kent Kelley, T.G. (1999) Strategic Partnerships in HRM, Personnel Administrator, January: 76-82. Lee, CT. (1994) Overseas Investment of Taiwanese Enterprises and the Southbound Policy, Theory and Policy, Spring: 72-88 Lorange, P. (1994) A Conversation with Peter Lorange: Interviewed by Y.C. Wu., Common Wealth, July: 64-8. Mcelroy, J. (1991) The HRIS as an Agent of Change, Personnel Journal, May: 105-11. OConnell. S.E. (1994) System Redesign Makes FedEx a Technology Uader, HR Magazine, April: 33 -7. Peng, T. G. (1993) New Competence of Management, Management Magazine, September. 34 -7. Pfeffer, J. (1994) Competitive Advantage through People, California Management Review, 36(2): 9-27. Pfeffer, J. (1995) Producing Sustainable Competitive Advantage through the Effective Management of People, Academy of Management Executive, 9(1): 55-69. Redding, S.G. (1993) The Spirit of Chinese Capitalism, Berlin: De Gruyter. Richards-Carpenter, C. (1991) How CPISs alter personnels role. PersonnelManagement, 23(8): 18-19. Russ, CF. (1992) Manpower Planning systems: Part I, Personnel Journal, January: 40-5. Schneider, B. and Bowen, D.E. (1993) The Service Organization: Hunmi Resources Management is Crucial, Organizational Dynamics, Spring: 39-52. Sherman, A. W. and Bohlander, G.W. (1992) Managing Human Resources 9th edn. Ohio: Southwestern, 24-25. Silin, R.H. (1996) Leadership and Values: The Organization of Large-scale Taiwanese Enterprises, Cambridge, MA: East Asian Research Center Harvard University, 11-15. Smith, BJ., Boroski, J.W. and Davis, G.E. (1993) Human Resource Planning, Human Resource Management, 32(1/2): 81-93. Stevens, L., Moravec, M. and McCarthy, A. (1991), Recruiting for Tomorrow, Personnel youmoi, 70(11): 58-70. Sue, Y.C. (1994) The Hidden Competition, Common Wealth, April: 20-31 (m Chinese), 2-5. Human Wagel, W.H. (2000) On the Horizon: HR in the 1990s, Personnel, 67(1): 10-16. Walker, J.W. and the Walker Group (1999) Human Resource Roles for the 90s, Human Resource Planning, 12(1): 55-61. Yang, G. C (1993) Manpower Revolution, Management Magazine, March: 36-8. Read More