Can Western-Style Hrm Practices Be Introduced To China

Introduction

The working environment of many western companies is currently changing a lot. Due to the globalisation and opening of markets companies are confronted with new problems. As a consequence organisational structures and practices are altering. In addition, human resource management practices need to be adopted as well. This is nothing unusual and has constantly happened in the past. In the beginning of the 20th century the scientific management theory of Frederick Taylor was extremely popular. Later, theories of Henri Fayol or Max Webber gained influence. A major shift in HRM came than from the human relations theory of Elton Mayo. Today the main concern of modern HRM theories is selecting and developing the employee.

In China we have seen in the last 30 years a development which is unique. The modernizations which have taken place affected every sphere of life. Especially the economic sector has altered extremely. Today there is a significant number of private enterprises and multinational corporations. Is it now possible to transfer western-style HRM practices to these companies in China? To answer this question, we firstly point out some cultural differences. Secondly, we list arguments for and against the implementation of western HRM practices and finally we draw our personal conclusion.

Cultural differences

“The ability to understand cultural differences and exercise influence in cross-cultural networks is now regarded as an essential qualification of the global manager. Managers will be more effective if they have strong cultural awareness and know how to influence people with a different cultural background.” (Chen, 2006) The same is necessary if one will implement western-style HRM in China. Therefore we try to outline the most important cultural differences first.

The Chinese culture can be characterized as “relationship-oriented” or “social-oriented”. (Chen, 2006) The emphasis lies much more on personal networks and therefore personal relationships play an important role. Even though the so called “guanxi” (similar to “connections”) is changing, it does still play an important role in Chinese culture. In addition, Chinese try to build an environment of harmony and avoiding open conflicts. This is partly related to the concept of “loosing face”. Due to the different cultural background, Chinese employees have a different perception of work place participation. Paternalism still prevails in Chinese companies therefore Chinese employees prefer their leaders to describe all details on their missions. Therefore there is an excessive dependence on the leader. Generally it can also be said, that Chinese employees are less used to express their own opinions in front of a superior person. The so called leader is in addition expected to have a deeper relationship to his employees in comparison to a western standard. The commitment of employees in China differs as well. Chinese people have generally a stronger commitment to the supervisor and less to the organisation. (Maier, 2008) Another difference is that Chinese employees behave in a more pragmatic way instead of following strict rules in a company.

The above mentioned cultural differences are subtotal and currently changing a lot. Especially young Chinese people may have different attitudes.

Arguments against HRM practices transfer

As many studies showed, the HRM practices in China differ greatly from company to company. Because there is a low level of law enforcement, companies have a wide range of possible HRM set-ups. Due to that and the different cultural background there may be limitations in implementing western-style HRM practices in China.

Today, a large amount of work is done in a Taylorist work system, characterised by repetitive work, low skill levels and low pay. HRM elements were only introduced to maximize productivity. Social security schemes are nonexistent in most companies. ToyCo tried a pension scheme but dropped it after 18 months because of its high costs. (Cooke, 2004)

The performance management system in the Chinese software industry shows also some limitations in adoption western-style HRM. Even though these companies adopt share options as a variable pay element, this is not seen as a reward for the individual. Because Chinese software companies focusing less on the individual, share options are used as a gesture of benevolence. Another typical element of Software companies is long working hours. While this is achieved in the USA by financial incentives, Chinese software firms will use social motivators. (Tsang, 2007)

The research in the service business of manufacturing companies in Switzerland and China shows other restriction. The results of several minicases indicates the Chinese service manager lose face by stressing added value of providing services. Chinese service managers in contrast to the one in Switzerland uses “free” services for establishing a guanxi network and “giving face” to their customers. (Gebauer and Zedtwitz, 2007)

Implementing western-style HRM practices is mainly constrained by the current pressure of low cost production and Taylorist work system. There is just no space for broad HRM practices. Because of the low level of law enforcements, the incentives to implement social security schemes or minimum wages are lacking. In addition, the Chinese culture differs in certain spheres strongly from a western one and limits therefore the ability to implement western-style HRM practices.

Arguments in favour of HRM practices transfer

Even though there are maybe cultural constraints and financial pressure, some companies did implement HRM elements successfully.

Chinese software firms did successfully establish performance plans, motivation employees, observing and evaluating performance as well as rewarding performance. Even though this was done under the influence of the cultural value of collectivism, the basic concept comes from western-style HRM practices. (Tsang, 2007)

“Operational managers play an important role in the configuration and implementation of HR practices.” “FDI organisations operating at the upper end of the market and managed by younger Chinese managers may have more opportunities to adopt good HR practices.” (Cooke, 2004) It seems that not the cultural set-up but the personal attitude