From traditional personnel

management to HRM

 traditional personnel management: concerns mostly

issues related to industrial relations and administering
employees
 HRM: a strategic function concerned with consequences
of all organizational decisions for human productivity and
for the well-being of the entire work force. It is a
distinctive approach to employment management which
seeks to achieve competitive advantage through the
strategic deployment of a highly committed and capable
work force, using an integrated array of cultural,
structural and personnel techniques.
HRM practices in China
 Still in a primary stage, and still under heavy
political interference
 prior to reform, most personnel issues of
enterprises were controlled by administrative
agencies. For example, recruitment of
employees were restrained by quota and there
was little freedom for employees and
employers; wages were fixed according to
government grades
HRM practices in China
 During the reform period, there have been
many changes in personnel management in
enterprises. For example, enterprise managers
now have more freedom in recruitment and pay
and bonus determination.
 The progress was limited by intervention of local
governments, which are eager to avoid
unemployment.
HRM practices in China

 Concepts of Chinese culture affecting HRM

practices in China
 the respect for age and authority
 maintenance of harmonious human relations
 the favor of personal relations
 group orientation
 the concept of face, which suggests that one
should avoid losing face - shame and indignity in
public.
Challenges for joint
ventures

 Sources of HRM practices for joint ventures in

China
 home practices
 practices in local firms
 how to adapt the home HRM practices to a
different institutional and cultural environment?
 which source has been dominant in shaping
the HRM practices in joint ventures in China?
Areas of HRM

 Recruitment
 Training
 Performance appraisal
 promotion criteria
 financial reward
Recruitment

 Source of recruitment
 transferring the existing workforce from the
local parent partner
 recruiting from the labor markets
Recruitment

 Merits and defects of inheriting the

existing workforce of local parent partner
 quick to start
 the local partner provide welfare and
supporting facility
 old organizational culture
 old group adherence
Recruitment

 Merits and defects of recruiting from labor

market
 selecting the best candidates
 creating new organizational culture and
management style
 lack loyalty and high turnover rate
 difficult to persuade local partner to accept
this practice
Training

 Generally most joint ventures in China

recognize the importance of training and
devote a large amount of resources to
training
 overseas training regarded not only as
knowledge acquisition, but also as part of
the strategy to retain good employees
Performance appraisal

 Share similarities to that of home HRM

practices than to those of local firms
 use of objective appraisal criteria;
qualitative criteria are used as
complimentary
 top-down appraisal system; unlike the
practice in local firms, managers are not
rated by subordinates
Promotion
 Most similar to home HRM practices
 the GM has important power to determine the
appointment of middle managers and other
subordinates, while in local firms promotion
typically involves collective actors
 promotion as a strategy to prepare for greater
localization
 usual conflict between foreign and local partners
over promotion
Financial rewards

 Joint ventures often offer much higher

pay than local firms
 the difference of pay for worker and
manager is larger in joint ventures
 pay and bonus are geared to individual
contribution
Why localize?

 High cost of maintaining expatriates

 greater long-term effectiveness of local
managers
 need to attract and retain high potential
employees
 best use of human resource assets
available locally
Challenges for localization
in China
 Few qualified people
 selecting appropriate personnel
 need for accelerated training
 managing the expectations of local employees
 managing internal politics and resentments
 ensuring the transfer of knowledge and skills by
expatriates
 lack of comprehensive localization strategy
Developing high potential
employees

 Developing local leaders in the training

classroom
 coaching and mentoring by someone who
understands how to execute business
strategies through people
 trial and error experimentation by local
managers
Developing high potential
employees

 Coaching by expatriates
 positioning: to position local managers
properly within the organization, both in
China and in the eyes of their western
colleagues back at the headquarters
 rotating jobs: moving from various types
of functional areas to develop broad base
of experience
The roles of expatriates
 Expert role: to transfer technical and managerial
knowledge
 general management: to provide strong leadership,
build up organizations, and push for changes
 to communicate with the headquarters
 to safeguard the company’s interests
 Hence, a certain amount of expatriates are needed
because some roles are very difficult to be taken
up by local managers