Human Resources Management
Challenges of Adoption and Implementation of Western Human Resources Management Practices in China

Introduction

The uses of western human resources management practices are becoming more common and widespread in China. Several trends are driving such changes. First, it is the increasing more and more entry of western enterprises into China, in the form of foreign direct investment (Yang, Zhang & Zhang, 2004; Cai, Morris & Chen, 2011). Secondly, the many Chinese student studying on western countries are also bring back the relevant knowledge on western human resources management to be applied in China (Cooke, 2009; Lewis, 2003). In addition to that, it can also be noted that the local businesses are fast to adopt the human resources management practices, as the country had transformed into a market based economy that demand greater corporate performance for survival (Zhu, Zhang & Shen, 2012; Ahlstrom, Foley, Young & Chan, 2005).

However, scholars had also largely acknowledged about the difficulties or challenges faced during the adoption of these western human resources management practices in China. Many of the problems are associated to issues such as institutional differences, cultural differences and even the differences of economic climate (Lewis, 2003; Smale, Björkman & Sumelius, 2013; Lin, 2006). Some of such studies in this context include the following: Chen (2011), Fang & Zhou (2010), Hofstede (1993), Kong, Cheung & Zhang (2010), Law & Jones (2009) as well as (but not limited to) Lunnan & Traavik (2009). With that, it can be seen that while the many western resources management practices can be leveraged for firm performance and even competitive advantage in the western countries, they may not be easily applied for firm performance in China.

From such background, it is easy to spot that there is a need to better understand that the topics on challenges faced by people in China when trying to adopt western human resources management practices are of interests of scholars. This issue should be examined, as it is important to understand what are the barriers or obstacles that may affect adoption and implementation of westerns human resources management practices in China. Further, there is lack of such studies in literature, from an integrated approach. As such, there is a gap in the literature that worth attending to. This research project will cover such gaps in the literature.

Considering that, this essay is structured to achieve these several objectives. First research objective is to examine about the various human resources management practices widely applied in western country. Then, the second research objectives are to investigate about the possible challenges during the process of trying to adopt of implement these western practices in China. Third research objective is to outline some suggestions on how to better implement western human resources management practices in China.

Literature Review

The Background of Research

Human resources management has also been treated seriously by scholars and practitioners as it is indeed an important area within the context of business management. For that, a review of the scholarly journals would found that many arguments are available on how human resources management can affect the various organisational outcomes; and the impacts of effective human resources management practices include the following:

  • Affect the following employees’ attitudinal and behavioural outcomes:
    • Employees commitment (Edgar & Geare, 2005; Theriou & Chatzoglou, 2009)
    • Employee job satisfaction (Edgar & Geare, 2005; Wielemaker & Flint, 2005; Kotey & Sheridan, 2004)
    • Employee retention intention (Ansari, 2011)
    • Employee performance (Theriou & Chatzoglou, 2009; Golhar & Deshpande, 1997)
  • Facilitation of smooth administrative processes (Kotey & Sheridan, 2004)
  • Enable and leverage the employees to serve customer better (Golhar & Deshpande, 1997)
  • Contribute to strategic development and growth of a firm (Ayse & Aydinli, 2006; Brand & Bax, 2002; Wang, 2011; Wielemaker & Flint, 2005)
  • Enhance knowledge sharing, knowledge transfer and knowledge management process in a company – which will eventually to innovation (Minbaeva, 2005; Theriou & Chatzoglou, 2009).
  • Attainment of business success (both efficiencies and effectiveness) as well as competitive advantage for a company (Khandekar & Sharma, 2005; Flanagan & Deshpande, 1996; Takeuchi, Wakabayashi & Chen, 2003)
  • Improvement to financial performance, and hence the profitability of a firm (Chand & Katou, 2007; Hoque, 1999; Maja, Pfajfar & Raskovic, 2012; Sels, De Winne, Delmotte, Maes, Faems & Forrier, 2006; Theriou & Chatzoglou, 2008; Thite, 2004; Truss, 2003; Unnikammu, Al-Lamki & Sree Rama, 2011; Yusoff, Abdullah & Baharom, 2010)

 

Overall, it can be seen that there are ample evidences on how human resources management practices can affect the various organisational outcomes, and how human resources management practices can be so important in business management. In such a perspective, it is indeed crucial to study more about human resources management practices, in order to achieve business success.

Yet from another perspective, the economy of China has been transforming very fast since its accession into Word Trade Organisation (WTO) a decade earlier (Johansson & Leigh, 2011, 2011). Many western enterprises had ventured into the country, in order to tap on the fast emerging of the economy prosperity in the country aside from trying to reach the most populous market in the world (Luo, 2009; Kim, 2011). Under such a trend, many multinational had expanded to China, and they are trying to manage the local workforce through the use of their existing western human resources management practices. However, many managers soon found that it is indeed challenging to exactly apply those western human resources management practices of which are supposed to be effective, in dealing with the local workforce China (Chitakornkijsil, 2011).

Given that background, this section will review some of the important materials on this particular context. First of all, some description on western human resources management practices will be provided, so to gain understanding on what exactly are being categorised or treated as western human resources management practices in this particular research project. Then, the popularity, applications and development on the use of such human resources management practices in China will be also articulated. This is necessary as to provide more information to readers on the history of human resources management practices in China. The next section then will focus on cultural differences between western countries and China. This is crucial as cultural differences are often cited as the very important reasons giving rise to differences, which arguably largely responsible for the difficulties of applying western human resources management practices in China. Then, the review will focus extensively on the challenges faced during the adoption of human resources management practices in China – which is the key theme of this particular research. Lastly, the final section in this chapter will focus on some of the important guidelines or critical success factors in the context of managing human resources in China – in the context of applications of western human resources management practices.

Western Human Resources Management Practices

It can be observed from within the literature that the current human resources management practices originated mainly from the western countries. Indeed, many of the HRM practices suggested within business management textbooks are originated from western countries and management philosophy (Chow & Liu, 2007). As such, in this research project, western human resources management practices are referring to those modern human resources management practices widely discussed and suggested in business management textbook. Such definition will serve as the guide for the further discussion in this paper.

Scholars tend to separate the western human resources management practices into several areas; and that enable these many different practices to be discussed and analysed in a more systematic order. Some of the examples that scholars had categorise the many different western human resources management practices into different groups and such information will be presented in the following table.

 

Table 1: The Different Areas of Western Human Resources Management Practices

Scholars Categories of ‘Western HRM”
Blackburn & Rosen (1993) Training and development

Empowerment of people

Performance evaluation and appraisal,

Reward system

Team work

Kotey & Sheridan (2004) Recruitment and selection practices

Training methods

Performance appraisal

The maintenance of HR records and policies

Patricia Ordonez (2004)

 

Selection and recruitment process

Performance assessment

Rewards and compensation practices

Tanova & Karadal (2006) Recruitment

Performance management

Reward systems

Retention of employees

Manikandan (2009)

 

Empowerment

Job rotation

Job enlargement

Job enrichment

Teamwork

Training

Welfare

Incentives

Responsibility with control

Wheeler, Harris & Harvey (2010) Job design

Career management

Rewards system

Soomro, Gilal & Jatoi (2011) Training

Selection

Career planning

Employee participation

Job definition

Compensation

Performance appraisal

Chee-Yang, Keng-Boon, Boon-In, Voon-Hsien & Yee-Loong (2011) Recruitment and selection

Teamwork

Training and development

Performance appraisal

Katou (2012)

 

Communication

Compensation

Flexible work arrangements

Incentives

Involvement

Participation

Performance appraisal

Promotion

Recruitment

Selection

Training and development

Work design

 

Overall, it can be seen that there are several areas of western human resources management practices widely discussed in the literature. With that in mind, the various western human resources management practices within this research project will be limited to some of these areas – to have a more focus on the research areas. As such, in this particular research project, the several areas of western human resources management practices to be discussed will be as follow: (i) recruitment and selection practices, (ii) employee involvement practices; (iii) performance management practices, (iv) compensation and reward practices, (v) communication practices, and finally (vi) training and development practices.

Human Resources Management Practices in China

The many western human resources management practices are actually new in China – as those human resources management practices were brought into the nation primarily after the accession of China into WTO. To explain, some of these human resources management practices such as the allow of flexibility in job design, performance management, performance oriented reward design, employee involvement, the freedom of hiring and retrenchment, contractual work arrangement and so on are actually western human resources management practices that were not applied in China during the time when China was being ruled under the state planning economic era (Lewis, 2003; Smale, Björkman & Sumelius, 2013; Li & Chia, 2011; Ahlstrom, Foley, Young & Chan, 2005).

To explain, it should be acknowledged that the knowledge on managing employees and other people is not something new in China – but that is a body of knowledge long exited in the country since centuries ago. Just as there are many management gurus (such as: Douglas McGregor, Elton Mayo, Mary Parker Follett, Peter Drucker, Rosabeth Moss Kanter as well as Warren Bennis) in the western countries, the ancients management guru in China would include the following sages: Guanzi, Hanfeizi, Yanzi and Xunzi (Zheng & Lamond, 2009). However, after the takeover of China by the communist regime in recent history of China, the issues of people management are largely irrelevant, as the management of employees are relying on the command and order from the top authorities – under the state control and planning regime.

Therefore, prior to the transition of China into a market based economy, advanced people management techniques are actually non-existence. For instance, people management process in China during the planned and command economy has such attributes: centrally regulated job allocation, cradle-to-grave social welfare systems, forbidden of employee poaching, iron bowl employee feature, egalitarian pay systems as well as high job security (Chen & Wilson, 2003). Obviously, the attributes of modern western management practices such as the emphasise on differentiated pays, effective selection and recruitment practices, empowerment of employees, as well as performance oriented management philosophy are not features of people management practices during that era. It is not until very recently after the transition of the country from a planned and command economy into the market based economy that such western human management philosophy and practices are starting to spread and applied in the nation.

Overall, with that in mind, it is valid to comment that western human resources management practices are relatively new in China. These human resources management practices were not previously widely applied in the country. It is noted that the economic growth of the nation and the transition into market based economy had pushed enterprises forwards towards adoption and implementation of such practices, but as will be discussed further below, the distinctive Chinese culture are actually affecting the relevancy, applicability and effectiveness of such human resources management practices in the nation. Such issues will be reviewed in the next section.

The Cultural Differences

The seemingly difficulties faced in trying to apply western human resources management practices in China is largely associated to issues on cultural differences (Lin, 2006), albeit there are also differences due to political factors, institutional factors or the economic climate (Ahlstrom, Foley, Young & Chan, 2005; Chow & Liu, 2007; Dessler, 2006; Ke, Chermack, Lee & Lin, 2006; Vanhonacker & Pan, 1997; Wang, 2011; Li, Zhao & Liu, 2006; Ji, Huang, Liu, Zhu & Cai, 2012). As such, a review on the cultural differences between China and the western world shall be provided accordingly in Table 2 below.

 

Table 2: Cultural Differences

Scholars Findings
Hofstede (1993) ·         Chinese exhibit higher power distance (while the western counterpart exhibit lower power distance), long time orientation (the western more shorter time orientation) and collectivistic societal nature (the western as an individualistic society)
Fu (2000) ·         The Chinese exhibited collectivism, long term orientation, and high power distance, while moderately high on femininity as well as uncertainty avoidance
Chien (2006)

 

·         Chinese tend to emphasise a lot on loyalty, such as loyalty to friends, loyalty to family members and loyalty to leaders
Law & Jones (2009) ·         “Guanxi” will affect the differences of treatment provided to a person, based on the social network of a person, and such situation is far less observable in western countries
Wang (2011) ·         The Chinese emphasise a lot on “yi qi” (loyalty). The decision of their leader to leave an organisation will cause all of the followers to leave together with the leader.

·         People in China emphasise on “guanxi”, whereby there are many non-explicitly stated assumptions and rules that govern relationships between people

·         Face or “MianZi” is very important in China, and people will always try to “save face” for others on the inter-personal interaction process

Li & Chia (2011) ·         Chinese exhibited fuzzy thinking process, which can be explained as the multivalent, multi-valued as well as non-linear worldview

·         The Chinese adopt the ideology of Taoism – it is hard to characterise them, as they will change their behaviours dependent on the situations and the needs of the circumstances

·         The Chinese practices ‘Zhongyong’ (i.e., being balance, moderation and appropriateness)

 

From these discussions and findings presented above, it can be seen that there are indeed significant cultural differences between people in China as compared to those in western countries. Due to such cultural differences, the applications of western human resources management practices often found to be irrelevant or facing obstacles in China (which will be discussed in the next part). With some understanding on the distinctive cultural differences between western world and China, the discussion will proceed to focus on the core theme of this research project, which is about the challenges faced during the application, adoption and implementation of western human resources management practices in China.

Challenges Faced in China

There are many challenges that manager will likely faced when trying to apply or implement western human resources management practices in China. To facilitate the discussion, the various challenges to be discussed will be categorised into these areas, namely: (i) recruitment and selection practices, (ii) employee involvement practices; (iii) performance management practices, (iv) compensation and reward practices, (v) communication practices, and finally (vi) training and development practices. The discussions are as follow.

Recruitment and Selection Practices

Under the old system (in the era of communism), the only form of businesses available are the state-owned enterprises. In such a system (of which is often known as the “iron rice bowl” policy), the employees were allocated accordingly based on the judgement and decision form the higher authorities, in which the employees have no choices on what they want to work on. There were virtually no recruitment or selection procedures in the context of human resources management practices as was the situation in the western world (Lewis, 2003). Indeed, to poach the employees from other state-owned enterprises are illegal (Dessler, 2006). Nevertheless, while the employees did not have any choices on what to work on, they were however guaranteed high degree of job security, in which there is virtually no firing of workforce from the state-owned enterprise, even in the case when a state-owned enterprise is burdened with issues such as over-staffing (Lewis, 2003; Chow & Liu, 2007).

As such, recruitment and selection can be considered as largely a new phenomenon in China. There are some challenges pertaining to the strict adoption or application of western recruitment and selection style in those Chinese owned enterprises. First of all, due to the collectivistic nature of the Chinese society, people often treated each other as belong to either the in-group or out-group members. The treatment to a person either from the in-group or out-group members can differ significantly. For that, the recruitment and selection process in China often found to not adhere to those rational process as in the west, whereby very systematic and rigid criterion are applied to select the best possible candidates that suit the job, fit the environment or most likely to have the best attitudes, skills or experiences on a particular job. Rather, the selection and recruitment process is very subjective, as the managers or business owners may want to choose their family members or those candidates with better network or social capital, such as those with certain degree of political background (Chow, 2004; Taylor, 2005; Zhao & Du, 2012).

Then, another potential issue is that the widely applied western psychometric and assessment tests during the interview process may not be applicable in China. As discussed in Li & Chia (2011), the typical psychometric and assessment tests that are found to be reliable in western countries cannot be applied in China. For example, there are some Chinese, typically those with higher ranking and life experiences, cannot be easily quantified and categorised. This is because the responses of such people is highly dependent on the situations, and they may adjust their personality even to fit the external circumstances as well as their personal objectives (of which, apparently make them to possess multiple personality). While there are many other examples on this, it is obvious that some of the tests or models developed in the west cannot be applied in China, of which people seem to be behaving and thinking under remarkably different cultures.

Aside from that, it is also found that job interviews in China are not conducted for the purpose of testing out the candidates. The job interviews in China (even in recent years) are more informal. Generally, the job interviews are used to serve as the ice-breaking session. There are some possible reasons of trying to use job interviews in the recruitment and selection process. For example, many candidates in China are shy to promote themselves, as they perceive that such an act is boastful – whereby it is important to be conservative, reserved, modest and humble – under the influence from Confucianism (Dessler, 2006; Li & Chia, 2011). In a certain way, job interview cannot be used to screen the candidates effectively, as many talented personnel may just remain reserved and very humble during the interview process, and there is hardly any useful way to know their capability unless they were hired and tested out in actual employment contract.

Employee Involvement Practices

Increasingly more literature is recognizing about the importance of involving employees in decision making process and getting the employees to participate in the shaping of future direction of an organisation. Such practices however can be very challenging in China. The directors in China tend to act without taking in feedback from the subordinates, and the follower indeed do not really disturbed by this, as under the culture of high power distance, the subordinate are not supposed to interfere with the superior (Chien, 2006). Gven such circumstances, to have a truly employee involvement practice within these Chinese enterprises can be very challenging.

Performance Management Practices

The performance management system is one of the very core philosophies of the western human resources management practices – whereby various practices such as the annual performance appraisal, feedback session, mentoring to enhance the performance of staffs are all common practices widely applied in western organisations. However, there are several challenges to apply some of these practices in the context of China.

First of all, the performance appraisal process scan be very tricky and challenging for the managers, as under the collectivistic nature of the Chinese culture, one of the emphasis is to value over harmonious relationships between people. As such, it would be hard for the managers to appraise these employees whom are not performing negatively – although it is indeed necessary to appraise them negatively when they are not performing, as under the core idea of western performance management system. As such, there is no significant differential appraisal against those good and bad performers in an organisation (Bruton, Ahlstrom & Chan, 2000).

Then, the feedback sessions in performance management system in an organisation can be very challenging and embarrassing as well. First of all, the managers would likely refrain from giving harsh feedback, even to the extent of not trying to give any negative feedback – as under the collectivistic nature of the Chinese culture, one of the emphases is to value over harmonious relationships between people. Giving bad feedback is something that worries the managers – as that might affect the inter-personal relationships among the workplace (Liu & Dong, 2012; Dessler, 2006).

Secondly, the feedback sessions are unlikely to be two-way communication process – between managers and the employees. Under the influence of high power distance culture, the employees tend to listen only to the subordinate, dare not confront the superior or to refrain from making any statement that they perceive as not welcomed by the superiors. As such, there is only one-way communication during such feedback session, and that affect the effectiveness of the entire performance management system seriously (Huo & Von Glinow, 1995).

Yet, it would be also obvious that certain practices such as the use of 360 degree feedback appraisal can be problematic and miserable in China, as the needs to maintain harmonious relationships between people, the needs to give face of the others, as well as the tendency not to comment badly on the superior (Dessler, 2006), will simply make the 360 degree feedback appraisal outright useless and meaningless.

Overall, it can be seen that there are serious cultural hindrance that undermine the possibility or effectiveness of the western performance management system in China, which make the performance management system in many of the Chinese organisations only the formalities rather than strategic tool that can truly add value to the organisations (Dessler, 2006).

Compensation and Reward Practices

Within the context of western human resources management philosophy, the compensation and reward system is a crucial element that should be aligned to the performance of the respective employees. In other words, the pay for the employees should be differentiated, based on the contribution and work performance of these respective employees (Huo & Von Glinow, 1995; Taylor, 2005). However, such an idea is new to China, as under the “iron rice bowl” regime in China earlier, the government will take care of the welfare of the entire workforce regardless of their performance (Bruton, Ahlstrom & Chan, 2000).

While there is increasing use of performance based reward system in China, there are however several challenges pertaining to the use of such system in the local Chinese enterprises. For instance, as the Chinese value over harmonious relationships between people, highly differentiated pay is perceived as not very appropriate. This can be evidenced from observation that pay tend to less differentiated in China, as compared to the west, such as in United States (Huo & Von Glinow, 1995). Then, another issue that cause the Chinese to refuse to have highly differentiated pay is that it is considered as ‘not giving face’ or humiliating for those people who receive the lower pay (due to lower performance) – when the pay differentiation is huge (Chow, 2004). That is obviously a situation that may not be effective in motivating the good performers however, when the poor performers are aslo receiving not too much differentiated pay.

Yet, another issue is that the factors valued as well as considered by the Chinese leaders tend to be more than performance of an employee. For instance, there are strong tendencies to reward issues such as seniority (Taylor, 2005), loyalty or even the family members (Chow, 2004). Such behaviours are certainly perceived as non-effective in the context of western human resources management philosophies.

The problems actually never stop at the issue on compensation or pay for the employees. Indeed, the promotion process in China is also being carried out in the Chinese style. In western countries, promotion is supposed to be based on their capabilities, job-fit, experiences and performance. However, the directors in China would prefer to promote those that have family ties with him or her (), or to choose over those who show highest loyalty to them (Chien, 2006; Chow, 2004). Yet, under the influence of Confucianism which emphasise on the virtue of filial piety, promotion is also often based on seniority rather than performance (Tsang, 1994).

From there, it can be seen that to structure the rewards system as if according truly to the western style can be difficult and challenging in China. There are certain cultural tendencies that are affecting how certain practices are favoured by the Chinese leaders, or not.

Communication Practices

The issues pertaining to communication processes within an organisation are also often considered as the areas under human resources management in the western perspective on human resources management – as communication process can largely affect the performance and interaction of people within an organisation. Typically, it is advocated that the communication process within an organisation should be two-way, candid and transparent (Wang, 2011).

Several challenges arise in the attempt to have a transparent organisation or two-way communication process within a traditional Chinese owned enterprise. First of all, the ‘guanxi’ element affect the Chinese to treat people differently, based on if someone is from the in-group or out-group of the network of a person. In such a manner, leader may choose to share information to only those that he considers as in-group, which often are the family members (Cai, Morris & Chen, 2011). As such, the communication process is often affected by the interpersonal relationships among the personnel, rather than as a truly transparent organisation. To adopt western human resources management practices therefore can be challenging, given such cultural tendencies of the Chinese to separate people into different group.

Another critical issue is about the difficulty of having candid communication between people in China. This is because the Chinese can be characterised as a high-context culture, of which communication tend to be indirect, and indeed, being frank, direct and confronting can be considered as improper in the country (Li & Chia, 2011; Dessler, 2006). Due to the nature as a collectivistic society, it is often that maintaining relationships between people is of higher priority than to confront people directly in order to solve workplace problems. Indeed, to confront people can be seen that not giving face to the others, and would likely create serious conflicts between people (Lan, 1995; Chien, 2006).

Training and Development Practices

Training and development has always been perceived a critical element to organisational growth in the viewpoint of western human resources management. Such a view is indeed shared by the many managers managing people in China, but there are still some distinctive issues or challenges faced by the local managers in the context of training and developing the workforce.

The first biggest challenge in this area is that there is a seriously lacking of skilled labour in China, which is largely created by the fast economic development which cannot be handled by the slower pace of human capital development (Lynton & Beechler, 2012; Ren, Zhu & Warner, 2010; Li & Sheldon, 2010). Furthermore, as China previously was a socialist country characterised by agrarian economy, the availability of human capital necessary for an industrialised nation is very limited (Fayol-Song, 2012; Ke, Chermack, Lee & Lin, 2006; Rovai, 2008; Shi & Handfield, 2012). Given that, the key challenge is that it is very critical to have highly intensive internal training for the workforce, for them to cope with the work requirements.

As such, it can be seen that the design and delivery of an intensive internal training for workforce is critical. It is indeed a huge challenge for those organisation that want to cope with the expansion of business and growth of the respective firm, as that must be also accompanied by the growth of human capital and development in their respective firms.

Critical Success Factors of Human Resources Management in China

Given that there are many challenges pertaining to strictly implement the western style human resources management practices in China, many scholars had also offered some suggestions on how to adjust those human resources management practices to suit the context in China. A brief review on some of the strategies will be provided herein.

First of all, many scholarly journal had found that the western human resources management practices cannot be fully transferred or exactly applied in China, and argued that adjustment and localisation of human resources management practices are necessary (Sparrow & Wu, 1998; Bjorkman & Lu, 2001; Lewis, 2003). In other words, the western human resources management should be adjusted to fit the local cultures – in order to be truly effective.

Yet, there are also some evidences that western human resources management practices can still contributing to human resources management process in China. There are also some studies that had also found that some of the western human resources management practices can be applied successfully in China. Among these include:

  • The alignment of human resources development initiative to support organisational growth and missions (Han & Zhao, 2013)
  • Performance management practices can be applied for better performance, as long as it is adjusted to suit the local Chinese culture (Wang & Wang, 2008).
  • Employee differentiation can contribute to better firm performance, albeit that might not be favoured by some of the people (Sun & Pan, 2011).
  • There are signs of increasingly applications of western human resources management practices in China (Smale, Björkman & Sumelius, 2012; Fang, 2004).

Analysis and Critical Discussions

Overall, it can be observed from the findings and discussion presented above that the changes of the business environment, societal structure and the transformation of state planning oriented economy to a market-based economy in China is exposing the firm to western human resources management practices. Such changes is indeed unavoidable as the firms in China must operate in a free market, which is characterised by intense competition, and that the increasing number of foreign direct investment had also largely responsible for introducing the western human resources management practices to local firms in China.

It is understood that people management is not something new in China, as prior to the takeover of the country of communist regime, there are many management gurus that had emphasise on the importance of people management, and on how to leverage on talents within people for better performance or in achieving certain goals. However, that is altered after the communist regime – of which communist regime largely transform the country into a state planning and control economy.

The people management process in China during the planned and command economy has such attributes: centrally regulated job allocation, cradle-to-grave social welfare systems, forbidden of employee poaching, iron bowl employee feature, egalitarian pay systems as well as high job security. As such, the attributes of modern western management practices such as the emphasise on differentiated pays, effective selection and recruitment practices, empowerment of employees, as well as performance oriented management philosophy are not features of people management practices during that era. It is therefore valid to comment that the western human resources management practices are relatively new in China.

When managers try to adopt these western human resources management practices in the hope for better performance, it is however often found that these practices cannot be exactly applied, as there are huge challenges to overcome before these western human resources management practices can be leveraged to attain competitive advantage for a firm. While there are many reason giving rise to these challenges (such as due to political issues, institutional issues or economic issues), majority of these challenges are due to cultural issues.

To gain better understanding on the cultural differences of Chinese as compared to the western counterpart, a review on the cultural differences is carried out. This is crucial for the analysis as understanding cultural differences will provide some insights on why cultural issues can be the challenges to overcome in the context of trying to adopt or implement western human resources management practices in China. This is because it is largely due to cultural differences that cause the hardship of implementing western human resources management practices in China. Overall, it is found that the distinctive cultural features or cultural differences of the Chinese are as follow: Confucianism, higher power distance; long time orientation; collectivistic societal nature; emphasise a lot on loyalty to friends, family members and leaders; respect for the elders (filial piety); “Guanxi”; “yi qi” (loyalty); and “MianZi”.

Due to such cultural differences, the challenges of trying to implement western human resources management practices in China, on these areas or aspects were identified: (i) recruitment and selection practices, (ii) employee involvement practices; (iii) performance management practices, (iv) compensation and reward practices, (v) communication practices, and finally (vi) training and development practices. To summarise the findings, Table 3 is presented accordingly as below.

 

Table 3: Challenges of Implementing Western Human Resources Management Practices in China

Aspects Challenges
Recruitment and selection practices ·         The selection and recruitment process is very subjective, as the managers may want to choose their relatives or those candidates with better network

·         The western psychometric and assessment tests may not be applicable in China

·         Job interview cannot be used to screen the candidates effectively, as many talented personnel may just remain reserved and very humble during the interview process

Employee involvement practices ·         Under the culture of high power distance, the subordinate are not supposed to interfere with the superior, while superior tend not to seek the opinions from subordinates
Performance management practices ·         It would be hard for the managers to appraise these employees whom are not performing negatively

·         There is no significant differential appraisal against those good and bad performers in an organisation

·         Managers would likely refrain from giving direct of harsh feedback to employees

·         Feedback sessions are unlikely to be two-way communication process

·         The use of 360 degree feedback appraisal can be problematic and miserable

Compensation and reward practices ·         Highly differentiated pay is perceived as not very appropriate and can be considered as humiliating the weak performers

·         There are strong tendencies to reward issues such as seniority, loyalty or even the family members (rather than performance)

Communication practices ·         High context culture

·         Confrontation or candid communication is rare

·         Transparency is impossible

·         Communication processes are affected by in-group or out-group treatment by a person

Training and development practices ·         The design and delivery of an intensive internal training for workforce is critical

 

Given the challenges discussed above, it is indeed crucial to aware of how the western human resources management practices may be suitable or not suitable to dealing with the local employees in China. For that, it is also reviewed briefly on scholar suggestions on how to leverage on the strengths of western human resources management practices for better performance and yet stay relevant to the Chinese context. On this context, many scholars argued that it is not proper to transfer those western human resources management practices exactly to China. It is argued that localisation of such practices are necessary. Such idea is easily understood as the cultural differences may affect the effectiveness of those western human resources management practices. Nevertheless, many evidences also pointed to the usefulness of western human resources management practices in China. It can be then synthesize that although there are some challenges to implement those western human resources management practices within the local firms or in the context of trying to manage local workforce, it is however still possible to apply and leverage on the strengths from western human resources management practices.

Such findings would better inform on the field of international business management, with a focus on international human resources management. Some of the critical lessons learned would include the need to pay attention to cultural differences, and to adjust or customised certain business practices, which in this research project, the human resources management practices when porting these practices to deal with workforce in another country.

Conclusion

This report had identified many challenges pertaining to the application, adoption of implementation of western human resources management practices in China. To conclude this study, a review of the research objectives set forth earlier will be carried out. How these research objectives and research questions were answered will be useful to conclude this particular research project. Considering this, Research Question 1 is about what are some of the common western human resources management practices widely applied in the western countries currently? To answer this research questions, the many human resources management practices widely discussed in journals and textbook were reviewed. It is discussed that most of the modern human resources management practices available in these materials are originated from the western countries (thereby it is treated that these are the western human resources management practices in this particular research project). Based on the review of the literature, the many different areas of human resources management practices were identified. Those areas selected for further investigation and discussion purposes are as follow: (i) recruitment and selection practices, (ii) employee involvement practices; (iii) performance management practices, (iv) compensation and reward practices, (v) communication practices, and finally (vi) training and development practices.

Then, Research Question 2 is about what are the barriers, obstacles or challenges that can affect the adoption of implementation of western human resources management practices, system or procedures in China? In-depth discussions are provided. Generally speaking, majority of these barriers or challenges are due to cultural tendencies of the Chinese, such as being the collectivistic society, high power distance, influence from Confucianism, ‘guanxi’, importance of ‘face’, great emphasis on loyalty among people and also the family oriented mindset in managing a business. There are also some other issues that give rise to those difficulties of challenges, such as: the recently transformation into a market oriented economy, legacy from iron bowl policy, and legacy from state planning and control economy model. For that, there are true challenges pertaining to truly adapt those western human resources management practices exactly as in the local Chinese firms, or in managing the Chinese workforce.

Finally, Research Question 3 is about what are the suggestions that can be provided to the firms that are currently operating in China, so that these firms can leverage on the strengths of western human resources management practices and yet stay relevant to the Chinese context – so to achieve better firm performance via effective human resources management in the nation? Overall, there are evidences that western human resources management practices can indeed be applied in China – for better firm performance. However, there are real challenges to be overcome (as mentioned above). To leverage on western human resources management practices and yet stay relevant to the Chinese context, managers should localise and adjust the western human resources management practices accordingly; as to transfer these western human resources management practices directly is not feasible.

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