Ans.

1 Synopsis of the case-

This case study is about a Chinese organization "Haier" and how the CEO Zhang Ruimin,
under his one-of-a-kind exhibition management framework raised Haier from a
"BankruptAggregate Enterprise" to the front of "Forbes". Barely any systems that it followed
to find true success were that it sought after a methodology of making than ruling market
specialties, for instance, it overwhelmed the portion of the US market by assembling cooler
for school and lodging dormitories.
It had faith in item expansion, item development to increment specialty markets, Market
drives to underline item quality and market examination, globalization and inventive human
asset management rehearses. Zhang's management standards coordinated
Japanesemanagement reasoning, American development and parts of conventional Chinese
culture, as well as Haier's own learning. These arrangements were brought into a climate
outlined toward the start by the Chinese social upsides of congruity, face, connections and
ordered progression, as well as by the management rehearses acquired from state-possessed
endeavours (SOEs). Zhang commented on the significance of powerful human asset
management strategies. He saw that need to keep movingwas elevated by inside rivalry as
well as outside. That's what Zhang noticed "workers can start to feel market pressures despite
the fact that they are inside the association." Further, he felt that this way of thinking had
assisted Haier with keeping away from two issues that had customarily portrayed Chinese
associations. One more essential component of Zhang's exhibition management framework
was responsibility, at all levels, consistently.
Haier was among the main Chinese producers to have laid out assembling bases abroad. An
intriguing inquiry was whether the presentation management rehearses that had procured
Haier such progress in China were adaptable to different societies as it went on with
itsforceful pushes toward worldwide development.A large number of Haier's exhibition
management ways of thinking were viewed as historic for a Chinese organization as well as
for any firm anyplace. Presently the inquiry was how should Haier's presentation
management frameworks be applied in different areas of the world?
Ans.2 The Company achieved success and transformed them to a multinational organization
because of its CEO Zhang Ruimin in 1985 as he introduced performance management
practices and tools which prompted colossal inspiration and energy among the employees to
develop and move along. He had transformed the little misfortune making cooler plant into a
gathering of more than 240 plants and organizations, utilizing more than 50,000 specialists.
The organization was viewed as fit of prevailing in China as well as of contending on the
world stage.He combined and integrated the following together- Japanese management
philosophy; Traditional Chinese culture; American innovation.
One of the most distinctive features of performance management that the giant corporate
body Haier depicts is the guiding principle that is in place in its management system, which is
OEC. This stands for overall, every control and clear. The term ‘overall’ implies that all
performance dimensions have to be adhered to by the employees. ‘Every’ refers to everyone,
every day, and everything. ‘Control and clear’ refers to Haier’s end-of-work procedure each
day. Conversely, the element of accountability is not distributed equally. Haier uses a range
of performance management and motivational tools. The conglomerate has an 80:20 principle
whereby the supervisors are responsible for 80 percent of the outcomes, whether excellent or
terrible, while the junior’s stand-in for the remaining 20 percent.

Another significant feature of Haier’s HR system is a close connection between performance

measurements and compensation. In addition, each manager’s production statistics, as well as
performances, are evaluated on a weekly basis. The formula for reviewing employees
involves both achieving quantifiable objectives and the degree of innovation and process
improvement. The end of the month brings forth a grading criterion for the managers to
analyze. This works out from the grade A-C. The outcomes are announced to the managers at
a meeting for middle to upper-level managers. This is quite unique since most other
companies do their work while shrouding in secrecy.

The principle behind success of Haier Performance Management System were the integration
of the Japanese philosophy, American novation and use of traditional Chinese culture, as well
as Haier’s own learning.
The basic components of Haier’s Performance Management System are as follows:
 Product Diversification- From a single refrigerator model in 1984 to over 13,000
specifications in 1986, Haier expanded to include microwave ovens, air conditioners,
small household appliances, TVs, washing machines, and MP3 players.
 Product innovation to create niche markets-Living space was restricted in China's big
cities, families were small, and energy was considerably more expensive. In the
summer, Haier created a compact washing machine to serve as a secondary household
machine for washing small loads of clothes on a daily basis.
 Market initiatives that emphasized product quality and market research-Unlike many
Chinese manufacturers, Haier aimed to differentiate its products rather than compete
on pricing. Haier actually raised its pricing in a recent price battle in both the local
and international appliance markets to convey a message to the market about Haier's
quality and service.
 Globalization- To better access worldwide markets, Haier had established many
abroad manufacturing bases, service and sales facilities, procurement networks,
international technological alliances, and joint ventures with foreign businesses by
2007.