From traditional personnel management to HRM

1
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.

2
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

3
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.

4
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.

5
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?

6
Areas of HRM

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

7
Recruitment

• Source of recruitment
• transferring the existing workforce from the
  local parent partner
• recruiting from the labor markets

8
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

9
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

10
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

11
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

12
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

13
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

14
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

15
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

16
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

17
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

18
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 companys interests
• Hence, a certain amount of expatriates are needed
  because some roles are very difficult to be taken
  up by local managers