International Human Resource Management in China
This paper is a report on the Human Resource Management that the company needs to implement in the establishment of a branch in China. It discusses the various aspects that are to be undertaken in terms of staff relocation, recruitment and in understanding the Chinese Culture and policies.
Staff Relocation
The recruitment of suitable staff and the retention of such is a serious problem in China. To deal with this problem, managers can audit the human resource with the employees with experience in the working conditions of the country. It is therefore necessary that the company relocate some of its employees to manage the branch upon its initial operation. This way, the transition process can be facilitated and local manager can be oriented with the company policies and practices before they are given full responsibility.
The company will have to transfer some of its employees from Hong Kong to initiate the start up operations in China. Employees to be transferred will be responsible for the following tasks:
Ø establishment of the operation
Ø transfer of technology to China branch
Ø enhancement of career development among employees
Ø development of a common organizational culture
Ø training and development of local managers
The responsibility of the Human Resource Personnel will have to be assigned to the local partners. The expectations of the expatriate managers may differ in terms of the practices used in recruiting, training, performance appraisal. With this situation, the management practices of expatriates are likely to be imparted or transferred to the local. This gesture though, entails a great deal of cross cultural management that will enable foreign companies to fit the local environment (1998).
There are two ways of appointing key posts:
Hong Kong based employees must be relocated for the start up operation to facilitate the pioneering stage. Eventually, the posts can be transferred to equally qualified employees for the key posts. This can be done to facilitate the transition process.
Recruitment Approach
In terms of management, there exists a battle between the demands for qualified employees against the limited but expanding supply of human resources. Only few managers are equipped with the managerial skills in areas such as Accounting, Auditing, Finance, Marketing and Operations (2003).High performing Chinese managerial staff is a major problem in the Country. However, foreign firms are able to recruit good quality university and polytechnic graduates (2004).
The company is faced with the challenge of finding staff suitable for the jobs and the employment needs. Normal domestic hiring should be implemented and several factors are to be considered including the following:
Ø Participation rate of men and women
Ø Number of people that are expected to apply for the job
Ø Required education for the particular job
Ø Sourcing of the Human Resources from the labor market
Ø Skill training and career structure
Ø Organizational culture to elicit employees’ commitment and loyalty
During the recruitment process, the company must consider the fact that gender discrimination occurs in the country. Generally, men are perceived as more capable of performing rather than women. Also, the shortage in skills and human resources need not be ignored in expecting the number of applicants that will fill the positions. The company must foresee these factors and decide the positions and number of employees to be considered for recruitment. Else, employees from the Hong Kong may be relocated instead.
Additionally, to maximize the recruitment, the following strategies can be utilized to fill entry level jobs and positions requiring different backgrounds.
Ø Advertising employment needs through media tools whether in broadcast or print media
Ø Service of employment agencies that helps firm in the recruitment and aid individuals in locating jobs
Ø Recruitment in Schools and Universities
Ø Participating in Job Fairs
Ø Accommodation of Walk In Applicants
Ø Online Recruitment
Moreover, to attract applicants, the company must provide a competitive compensation and benefits as part of the total package of the pay system. It is must be understood that the behavior of the Chinese workers are towards their work is motivated by the more efficient utilization of their skills and the high income.
In a study by (2001), it is revealed that State owned banks in China are losing their talented employees to foreign banks in the country. The primary reason for this is that Chinese employees perceived foreign corporations as a good venue to utilize their skills. Additionally, the high income was the second important consideration (2004).
Indeed, it is necessary to provide an attractive compensation package and a detailed specification of job position that will offer opportunities for career growth and the enhancement of the employees’ skills.
Implications of Culture and Policies
The operations of the Company will have to adjust to comply with the legal requirements and services that reflect the Chinese culture. The lack of knowledge and sensitivity on their culture will likely to result in frequent mistakes on business and personal interactions. It is therefore significant to study these aspects to be provided with the framework of the possible implications of decisions that are to be made by the company in the Chinese context.
A range of political, legal, cultural and economic factors has shaped the practices of Human Resource Management in China. Among the Major Labor laws are: ‘The Labor Law (1995)’, the Trade Union Law (1950, 2001) and the Provision concerning governance of the Labor Market (2000). The employment regulations are perceived as ineffective but they provide a framework in carrying out HRM practices such as recruitment, training, working time and pay (2004)
In terms of recruitment, the regulations are focused on eliminating gender discrimination. Employments are sought by individuals in a labor market flooded with candidates. Forty percent of the workforce of the country is comprise of women. The recruitment though is the major barrier which they face due to the downsizing of the state owned enterprises and the high rate of unemployment. Male workers are considered more capable with a higher rate of participation, stronger mobility and a longer working life. The unwillingness to recruit women paved the way for the inaction of a law on protecting Women’s Rights and Interest (1992) and the Labor Law (1995). However, discriminations still occur especially with the specification of gender requirements (2004,).
The working hours as specified by the Labor Law consist of no more than 44 hours within a normal working week. The pay system is based on the egalitarian culture which means the relatively heavy proportion of bonus on the total package of the pay. The sensitivity and low tolerance of Chinese workers in terms of the income gaps between companies is a factor to be considered in drawing a guideline for the compensation system (2004). The attitude towards pay remains focused on seniority and egalitarianism.
During then past two decades, the Chinese government has undergone major economic and social reforms. The state is faced with the pressure to generate more employment opportunities and the need to improve the skills of the labor force in the country ( 2005) Moreover, the withdrawal of state intervention and the greater diversity present opportunities and as well as challenges for the Company. Among the problems that are likely to be encountered are the following:
Ø gender inequality in recruitment and selection
Ø the weak presence of trade unions and the absence of true workers’ voices
Ø the unofficial role of grass-root workers in maintaining the egalitarian distribution system
Ø problems of skills shortage, training, recruitment and retention
Ø the need to professionalize the HR functions
Based on the studies made on the employment in China, it was revealed that talented employees are likely to shift from state owned banks to foreign banks. Primarily this is because of the opportunity and the high income offered by these firms. As a result, penalty clause was implemented in employment contracts. A method used to retain employees is the “negotiated wage” on the basis of the individual. This entails the abandonment of the traditional wage structure and tailoring a package that is based on the competence and the market value of the employee (2004).
The competition for talent is likely to result in the upward pattern of wages but at the same time encourages opportunistic behaviors. The problem encompasses the decision to train up the employees while taking the risk of losing them with attractive employment packages. The training plan needs to be adjusted also to reduce the cost of staff turnover (2004).
Another problem among Chinese workers is the lack of pride and motivation towards their work. Therefore, the HR is faced with the task of changing the behaviors of the workers to boost their motivation and their responsibility towards their work (2004).The toughest of the challenges is the skills shortage in the country. More training needs to be facilitated.
Maximizing the capabilities of Chinese workers is the top of the considerations that has to be made. The principle of performance based and promotion system can be implemented to motivate the employees. In order to survive the competition with the talented employees, it is necessary to lead the employees into feeling that they are provided with greater opportunities for them to grow. Particularly, Chinese workers must be employed for managerial posts to facilitate localization. Foreign companies are experiencing difficulties in the operations in China and thus the need to localize. Localization can be facilitated through the complete transfer of authority. This will in turn boost the morale of the Chinese workers and motivates them to work efficiently.
Credit:ivythesis.typepad.com
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