Human resourse practice in China - Essay Example

? HUMAN RESOURSE PRACTICE IN CHINA (Your teacher’s due Human resource practices in China are mainly related to relationships. This report highlights the HR practices in China, mainly discussing five aspects of HR i.e. recruitment and selection, training and development, performance appraisal, compensation and labor relations. It also focuses on identifying the connections among these practices and highlighting the cultural dimensions of China. 1.1 Recruitment and selection In historical perspective, recruitment and selection of employees had little significance in China. They were following an iron rice bowl system, which has no policy of external labor market. All practices of HR such as recruiting, training, compensation and performance appraisal were handled by this one single system. However, after 1995, many countries started working on free labor market including China. This involved recruiting from all levels such as universities, colleges and schools, which is a common practice nowadays in China and many other developed countries. Presently, researches have noted that mostly in organizations 80% of employees get jobs on the basis of sources such as relatives, family, and friends etc. this is an illegal practice. This large amount of percentage should be reduced and other people should also be preferred while recruiting and selection process. It have also been noted that most of the companies in China also prefer to transfer managers internally in order to fill the vacancies rather than hiring a person from outside (Child J, 2000). A selection criterion of China differs as compared to the other western countries. It focuses more on its cultural values i.e. guanxi, which means that there should be relationship among companies, employees and the government. Then only an organization leads to success. This culture focuses on the idea that employees should know that they are obliged to create a fit in their job and company should be able to retain the excess staff in case of new positions. This results to over employment in an organization. In recruiting and selection process companies should have more focus on skill and experience of a person rather than identifying that a person is Chinese or a foreigner, which is the common practice of Chinese companies. 1.2 Training and development Education, training and development of employees lead to efficiency in performance and provide various benefits to the enterprise. In past it was identified that about 1.5% of workers in china had a suitable qualification, 27.3% studied till high school and 7.8% workers had technical knowledge. This shows that Chinese workers had lack of skills and were untrained. But after centralization of economy, China has concentrated more on the training and development of employees. Workers were provided internships and technical education in order to make them skilled persons. But a major problem identified in this program was that during training it resulted that most of the workers mismatched with their job, which lead to less work and productivity. Training programs were more concentrated on political issues in order to enhance the culture of China rather than technical education. This led to a drawback and indicates that the training system of China is mostly linked to theory rather than practice. Workers are provided very narrow training aspect and they lack the ability to solve a problem in a practical way. Therefore, it can be said that the training and development process of China is passive and it does not produce creative and dynamic workers (Wei L & Lau C, 2005). Talented employees switch their jobs on two condition i.e. good salary or better carrier opportunities. But research indicated that in China employees are switching job because of better environment, compensation, knowledge, respectful position and carrier growth. In order to cope up with this situation Chinese management association introduced various courses on the education of management systems in many organizations. This resulted in improvement of the training and development systems. Another research identified that there wasn’t a problem in the training system of the organizations but most of the joint ventures enterprises in China has the lack of skilled and educated people. In relation to the present modern technological environment, China has low skilled employees in relevant to the quality as well as technology. In China training is confined to a very narrow aspect as compared to the other western countries which focuses more on the planning and development of employees in order to achieve long term benefits. Presently, there is a shortage of skilled labor in many markets of the world. Therefore companies are working more on training and development and are trying to retaining their employees mostly in western countries. China should also try to adopt this practice in order to control the present situation of the economy. 1.3 Performance appraisal Presently, Chinese industries have moved towards market driven activities and have adopted many practices of western organizations. Mainly, identifying the main cause of performance appraisal which includes development and evaluation, another aspect of it is enhancing communication between managers and employees. This will result in improving organizations performance and developing skills of workers. By adopting market driven activities China have been able to adopt various performance appraisal methods in the industry. Compensation has a direct link with performance (Chen W, 2002). The more the benefits and motivation the better will be overall performance. Performance appraisal is a broader concept it is based on many aspects such as training and development, selection procedures, job analysis etc. drawback in any of the above will affect the performance appraisal methods. However, in China there is a lack of performance appraisal of employees because there are many shortages from the very beginning that is the selection process. It will achieve success only if their present methods are revised and reorganized. They don’t have a basic system to control all these flows. This practice have led to low performance appraisal and have resulted in inappropriate compensation and rewarding system of employees (Walder A, 2000). 1.4 Compensation Compensation system of China is mostly handled through an employment system which is similar to the process used for recruiting and selecting employees. This means that it mainly focuses on equality among staff members. This lead to reduction in the differences of pay scale i.e. different payment is done to the employees on the basis of levels of job was reduced. However, as compared to the western countries, China is offering low scale of payment to the employees. It is paying around $40 per month to employees. The average ratio of wages only differs around 4:1. However, after some time period Chinese companies changed their compensation system in which individual is paid according to work done by him (Benson J, 2000). This means that the main characteristics which are the basis of compensation such as wage categories and jobs level are just considered as the behavior of payment. These things are given less practices. Bonuses are paid to employees only when companies’ performance is increased. Its compensation package also offers some facilities to the employees such as housing, meals and medical assistance. A research identified that 75% of firms in china provides the facility of meals, 50% firms provide child care facility and 60% firms provides accommodation to employees and fifty to seventy five percent of employees salary contributes in managing public funds such as pensions and insurance (Bjorkman I & Fan X 2002). Chinese firms are presently struggling to gain competitive advantage in the industry and this kind of compensation plan is creating a hurdle for the companies. Managers are unable to creatively manage the pay scales due to this present situation, because of which they are unable to create linkage in performance of employees and the pay scales, which is a big drawback of the companies. Country should avoid the use of different pay scales for foreigners, Chinese or overseas foreigners i.e. on the basis of people residential status pay should not be identified rather salary should be given on the basis of ones skills and expertise. 1.4 Labor relations Employee relations are strengthened on the basis of discipline, communication among all department and employee involvement in the organizations. It have been noted that in many companies it is the responsibility of labor unions to maintain labor relations. In China there is a lack of communication within the organization. The main reason is the culture of China; managers mainly prefer information in their own view rather than considering other people. This means managers make decisions by themselves and information is not transferred among all departments of the organization. This result in misunderstanding among employees because they are not clear with the organizational objectives and their role in the company, there is a lack of communication skills from top management to the employees (Wang D, 2003). Culture of China is main reason for these problems in the organizations. For instance there should be respect and loyalty among all higher levels of the hierarchy such as managers, leaders and the enterprise. This means all the decisions are taken by top management and employees have to accept them without any argument. So it can be seen that with such culture information cannot be shared easily in the organizations. This results in less involvement of employees in company affairs and poor communication among them. However, presently, China has improved it systems but it still lacks to maintain good relations with employees. The average employee turnover rate in China during 2001 to 2005 has increased from 9 percent to 14 percent. For long time China is known as the source of inexpensive labor. Companies nowadays have openings in many departments such as finance, marketing, technical because they are unable to retain their employees. 1.5 Connection among HR practices All HR practices are related to each other. The success of one is dependent on the other. Therefore, it is imperative to manage all the function accordingly to enjoy the benefits. There should be a fine tuning process in a system. In accordance to HR policy, if any function is less important than limited investment should be done on that function but this doesn’t mean that one should start neglecting that function or should pay less attention to that thing. Such as a company pays more attention on training and development of employees while have less focus on recruitment and selection techniques. This means that it is trying to make their present staff efficient. But at the same time negligence towards hiring would lead to poor performance and more expense. Recruiting, selection and training are linked to one another. If any mistake is made in selection process than companies will have to train employees which will involve more expenses, so in this case recruitment and selection should be given higher priority in an organization and to overcome any deficiency or to further educate the working staff training and development programs should be conducted for them (Bhattacharya M & Wright P, 2005). Management of people in an organization is mainly done through HR practices and their combinations. Labor relations, performance appraisal and compensation are related to each other. Employees must have the authority to share and interact their knowledge at all levels. This will result in efficiency and can only be done through good relations among all departments. Employees perform on the basis of compensation offered to them and they expect that they would be paid in accordance to their performance. If they are paid less than their expectations it creates a sense of demonization among employees. However, employees with such nature can be easily handled if there are good relations among managers and the staff. 1.6 Cultural dimensions of China China has a strong culture. There are many cultural dimensions of China. It focuses on high level of performance in order to achieve this recruiting and selecting a person’s interpersonal skill is considered to be most imperative. Two main characteristics of Chinese culture are tolerance and compromise. Therefore in organizations managers mainly concentrate on the teachings of understanding, patience and caring among employees. This practice leads to productivity and avoidance of conflict in the organization (Chan L & Snape E, 2004). One of the aspects of Chinese culture is respect of the elder member of the department. This means persons are respected on the basis of their professional level. Senior staff generally make announcement to the employees. They are not given an authority to share their own knowledge or experience. They are allowed to speak only when an opinion is asked from them. Due to this culture China is presently facing many problems in the business world. Chinese culture mainly focus on the concept of “Face” it means respect, honor or reputation. It focuses on the idea that how we are perceived by others which are done on the basis of status, profession, age, accomplishments etc. China’s power distance index is also lower as compared to the other Asian countries. The main reason of this is teachings and communist culture of the country which includes respect for age, stress loyalty, emphasis on harmony etc. Some tips to overcome this situation: Allow employees to ask question in relation to a particular decision. Long lasting relationships should be maintained among all staff members. In meetings team members of a project should be given specific time to consult and discuss with each other. One should try to work with new and professional people i.e. Chinese enterprises works only with the people they know. Decisions should not be made at meetings rather employee’s opinion should also be given vital importance (Tsui Anne S, 2006). References Benson, J. (2000). Flexibility and labor management: Chinese manufacturing enterprises in the 1990s. International Journal of Human Resource Management, 11(2), 183-96. Bhattacharya, M., & Wright, P. (2005). Managing human assets in an uncertain world: applying real options theory to HRM. International Journal of Human Resource Management, 16(6), 929-948. Bjorkman, I., & Fan, X. (2002). Human resource management and the performance of western firms in China. International Journal of Human Resource Management, 13(6), 853-864. Chan, L. & Snape, E. (2004). In search of sustained competitive advantage: The impact of organisational culture, competitive strategy and human resource management practices on firm performance. International Journal of Human Resource Management, 15(1), 17-35. Chen, W. (2002). Corporate culture in Chinese state-owned enterprises: An inductive analysis of dimensions and in?uences. The Management of Enterprises in the People’s Republic of China. Boston,MA: Kluwer Academic Press, 415–435. Child, J. (2000). Management and organizations in China: Key trends and issues. Management and Organizations in the Chinese Context. London: Macmillan Press Ltd, 33–62 Tsui, Anne,S. (2006). Organizational Culture in China: An Analysis of Culture Dimensions and Culture Types. Management and Organization Review, 2 (3), 345–376 Walder, A. (2000). China’s transitional economy. Management and Organizations in the Chinese Context. London: Macmillan Press Ltd, 63–83. Wang,D. (2003). Employment relationship and firms performance Evidence from the People’s Republic of China. Journal of Organizational Behavior, 24, 511–35. Wei, L. & Lau, C. (2005). Market orientation, HRM importance and HRM competency: Determinants of SHRM in Chinese firms. International Journal of Human Resource Management, 16(10), 1901-1918. Read More