Human Resurce Managment in China - Case Study Example

Human Resource Management in China Introduction The case study is focused on the analysis of the practices of human resource management (HRM) within industries in China. HRM is an essential strategic function of organizations which is concerned with different consequences regarding organizational decisions in terms of human productivity and well-being of entire workforce (Mello, 2014). The practices of HRM in China differ in many aspects than the HRM practices in the Western countries. The successful economic reform of China has assisted the country to generate sustainable and rapid economical growth. The 1979 ‘Open Door Policy’ of China has allowed the country to welcome enormous growth in terms of economy and industrial output. The rapid GDP growth has enabled the country to become one of the biggest markets across the globe. As the business relations of American organizations with China are growing rapidly, it has become very essential to analyze and understand the cultural differences, attitude and behavior of the Chinese organizations in terms of their human resource management procedure (Sheldon, et al., 2014). Discussion Concept of HRM in China The concept of HRM in China is highly motivated by the Chinese cultural practices. According to the analysis of Hofstede’s culture model of China, it can be said that the power distance and culture of collectivism is very high in Chinese culture. Hence, the organizations in China prefer to maintain a harmonious relation within human resources while focusing on group orientation (Warner, 2014). The organizations in China prefers to maintain clearer structure for the hierarchical levels of their organizational decision making process. The concept of HRM in Chinese organization can be broadly elaborated through the understanding of their recruitment, training, performance appraisal, promotional criteria and reward procedures (Sheldon, et al., 2014). During 1995, the introduction of new labor law and employment contract system in China has modified and changed the recruitment policies of a number of Chinese organizations. Though the new labor law has extended protection to the individual rights of the job seekers irrespective of their ethnicity and gender, most of the enterprises in China possess the power to recruit or layoff employees almost as per their will. The newly structured HRM process encourages the enterprises to hire graduates as well as experienced workers from other organizations (Sheldon, et al., 2014). The recruitment process in most of the enterprises in China provides priority to the relatives and children of the existing employees. This recruitment practice cause difficulty in terms of hiring external candidates despite of their skills and education levels (Siebers, et al., 2015). Most of the business sectors in China are focused on joint venture activities with multinational organizations. Most of these joint ventures within China provide great importance towards training procedures. Hence, the HRM processes of these organizations allocate large section of resource for the training procedure (Warner, 2014). The HRM of various organizations in China prefers international rotational development program which influences overseas training. The HRM practice in China not only utilizes overseas training as a mode of knowledge acquisition but as a part of employee retention strategy (Siebers, et al., 2015). The performance appraisal procedure in China organization mainly follows the top down appraisal system. This appraisal system is the traditional method of China organizations which considers the managers as the sole evaluator of the subordinates. The cultural practice of power distance influences this type of performance appraisal process which restricts the practice of rating the management by subordinates (Warner, 2014). The concept of HRM in China mostly prefers the localization of the management which generates conflict within local and foreign partners in terms of promotion. The promotional activity also follows a top down approach which allows the top management of Chinese organizations to appoint the middle management and other subordinates. The HRM in Chinese organizations mainly focuses on the non-cash reward procedure. Financial rewards are mainly observable in the joint venture organizations (Siebers, et al., 2015). Administrative personnel approach Vs Human Resources Approach in China Apart from the large multinational and joint venture organizations, most of the enterprises and private companies in China are managed by relatives and family members. Therefore, all these organizations find it difficult to follow human resource approach. A large portion of the enterprises of China believes in administrative personnel approach rather than the human resources approach (Sheldon, et al., 2014). The administrative personnel approach is a traditional procedure for managing people within an organization. This approach predominantly focuses on the function of administrative records keeping that is aimed towards establishing and maintaining equitable terms and conditions for employment. On the other hand, the human resource approach provides modern view in terms of employee management. This process allows organizations to integrate the traditional process of personnel management to the corporate strategies and goals. The human resource approach is focused on the acquisition, motivation, development and maintenance of the human capital within any organization (Siebers, et al., 2015). The administrative personnel management approach of Chinese organizations influences the management to assume the human resources as an input to achieve desired output. The administrative personnel management influences routine function in terms of HRM of the Chinese organizations. The personnel management process in the Chinese enterprises provides utmost importance to the norms, established practices and norms of the organization (Siebers, et al., 2015). The process of administrative personnel management influences the decision making process and establishment of rules and regulations through the top management only. Hence, this approach encourages the HRM process of Chinese organizations to introduce top down approach in terms of performance appraisal and promotional procedure (Warner, 2014). On the contrary, the practices of human resource approach allow the collective decision making process which considers the employee participation and decentralization. Hence, the power distance culture within Chinese organizations restrict the collective decision making approach of the workforces. The administrative personnel management approach encourages the Chinese enterprises to design the job roles as per the division of labor (Sheldon, et al., 2014). Currently, various organizations in China are shifting their attention towards the human resource management approach. This shift in the approach of human resources is encouraging the HR managers to learn and adopt different new methods and tools such as balanced scorecards, 360 degree feedback etc. (Siebers, et al., 2015). Implementing of standard HRM approach The best practices of implementing a standard HRM include a various distinctive processes. These processes are as follows: Innovative and encouraging reward, recognition and incentive procedure. The implementation of standard HRM process must include employee motivation function through monetary as well as non-monetary reward and recognition process for the workforces. This process encourages healthy competition within workforce while influencing the job satisfaction of employees (Paauwe, 2004). Another best practice to implement standard HRM process is to initiate “open house discussion” (Paauwe, 2004) and feedback procedure. This process encourages organization to frequently conduct employee-management meeting. This process can assist organizations to properly deliver essential messages to the workforce while gathering their feedbacks in terms of different organizational processes (Paauwe, 2004). Motivating the higher performers by highlighting their performance can be considered as one of the important part of the standard HRM practice. Utilizing Human Resource Information Systems to display the top performer will not only allow the organization to motivate the high performers, it will also enhance the healthy competition within organization (Mello, 2014). Introducing knowledge sharing procedure can also enable organizations to implement HRM process. Systematic sharing of knowledge will help in the transaction of valuable information of employees and organization Mello, 2014). The integration of performance evaluation with the organizational mission and objective is an essential part of HRM practice Mello, 2014). The initiation of 360 degree performance management and feedback system is also an undeniable part of HRM. This process allows organizations to include different levels of the employees in the performance evaluation and feedback delivery procedure. These levels of employees include supervisors, peers and subordinates Mello, 2014). Transparency in the management procedure is required for the implementation of HRM process. This process ensures the enthusiasm of employees towards business (Paauwe, 2004). Finally, creating and maintaining a safe and healthy workplace is the essential process for implementing HRM practice (Paauwe, 2004). Difference between HRM implementation in the Government Sector and Private sector The government sector and private sector of China demonstrate different approaches in terms of the implementation of HRM. The HRM in the government sector is extremely formalized as well as country specific. Therefore, it strictly follows the labor laws of the country. The HRM in the government sector of China needs to adhere to the country specific legal policies, systems of practices. The implementation of HRM in the government sector of China is very rigid and structured in terms of hierarchical level (Siebers, et al., 2015). On the other hand, due to the increase in the foreign business ventures in the China market, the HRM processes in the private sector are highly influenced by the practices of the operating countries of organizations. The recruitment, training and development, performance appraisal and talent management of the private sector varies from organization to organization (Feng, Jaussaud and Liu, 2014). In terms of recruitment, the government sectors of China follow a very narrow procedure which only includes national as well as regional examinations. The government enterprises focus on selecting the college graduates. On the other hand, the private sector organizations prefer to select a large number of channels in terms of their recruitment process to search for the best talents. Internal employee recommendation is one of the major channels for recruitment. Apart from that, organizations utilize online recruitment, newspaper recruitment, job agencies, job fairs etc (Li, et al., 2014). Successful HRM implementation in Companies of China Dalian Wanda Group is one of the largest business conglomerates in China that has won the recognition as the best implementer of HRM concept across the organization. The organization has won the award for “100 Best HRM Companies” in China during 2014. The organization was established in 1988 and it is headquartered in Beijing, China. The organization has demonstrated best practices of HRM in terms of employee motivation and retention strategy. Dalian Wanda Group has adopted one of the best reward recognition programs that have assisted the management to not only retail also to influence the performance of their potential employees. This process has allowed the organization to efficiently reduce employee dissatisfaction, turnover and layoff process during the post crisis period (Siebers, et al., 2015). Conclusion The overall discussion has detailed the human resource management practices of the organizations in China. The discussion has provided an in-depth view about different concept of HRM in China such as recruitment, training, performance appraisal, promotion and reward and recognition. According to the analysis, the HRM in China is highly influenced by the tradition and cultural practices of the society and organizations. The study has also evaluated that the HRM practice in China is highly motivated by the administrative personnel approach rather than human resource approach. The further discussion has detailed the distinction in terms of the HRM practice of government sector and private sector of China. References Feng, Q., Jaussaud, J. & Liu, X., 2014. State-owned versus private enterprises in China: adoption of modern HRM practices. The Globalization of Chinese Business, 51. Li, S. & Nesbit, P. L., 2014. An exploration of the HRM values of Chinese managers working in Western multinational enterprises in China: implications for HR practice. The International Journal of Human Resource Management, 25(11), 1529-1546. Mello, J., 2014. Strategic human resource management. Connecticut: Cengage Learning. Paauwe, J., 2004. HRM and performance: Achieving long-term viability. London: Oxford University Press. Sheldon, P., Sun, J. J. M. & Sanders, K., 2014. Special issue on HRM in China: differences within the country: International Journal of Human Resource Management. The International Journal of Human Resource Management, 25(15), pp. 2213-2217. Siebers, L. Q., Kamoche, K. & Li, F., 2015. Transferring management practices to China: a Bourdieusian critique of ethnocentricity. 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