HR practices in China final

8/7/2019 HR practices in China final

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HR practices in China



Overview

�

Country- People's Republic of China (PRC).

� Location- East Asia

� Capital city- Beijing

� Population -1.3 billion people

� Language -Mandarin Chinese

� Government- Communist Party of China (CPC) under a single-

party system

� China is the world's largest exporter and second largest

importer of goods.



Overview

�

China is the world's second largest economy by both nominalGDP and purchasing power parity (PPP).

� It is a member of United Nations Security Council,

multinational organizations, WTO, APEC, BRIC, Shanghai

Cooperation Organization, and G-20.

� China has been characterized as a potential superpower -

academics, military analysts, and public policy and economics

analysts.



Overview� China has become the world's fastest growing major economy.

� The past 25 years of economic reforms in China have led to impressive growth and

significant integration.

� China is now the largest recipient of Foreign Direct Investment (FDI) in the

developing world.

� Due to these developments, it resulted in major changes in the management of

industrial enterprises and hold considerable implications for human resource (HR)

practices in the nation with the largest workforce in the world.

� Chinese are beginning to adopt a more individual-led management culture and

give employees more responsibilities and rights.

� One of the major challenges faced by the companies i.e. both MNCs & domestic

companies are to acquire talented employees.



Currency, Holidays and Work Hours

1. In China, the currency in use is the YUAN (CNY) or the RENMINBI.The YUAN is divided into ten JIAO. The JIAO is divided into 10 FEN.

2. The Chinese YUAN is available in denominations of 1, 2, 5, 50 and

100 YUAN.

Holiday Month in the Year

New Year January 1

Lunar New Year February 12

Labor Day May 1

National Day October

New Year's Eve December 31

Throughout the year, apart from Festivals, businesses are open at the following hours:

Government Offices: Mondays to Fridays: 08:00 - 17:00 (with an hours break at noon).

Offices: Mondays to Fridays: 08:00 - 17:00 (with an hours break at noon).

Banks: Sundays to Saturdays: 09:00 - 18:00.

Stores: Sundays to Saturdays: 09:00 - 20:00.



Population Demographics and

Education Lev

els



GDP



Chinese Gestures

Okay Wishes

More



HR Practices- Early Days

� From 1949 to 1979, China had a centrally planned economy;

all industries were owned and run by the state.

� Personnel management was characterized by the iron rice

bowl, which ensured jobs for life and a cradle to grave welfare

policy.

� Individual workers were thus born into , educated by, spent all

their working lives and then enjoyed their retirement.



A deviation from Traditional HR

Practices

� The responsibility for labour allocation has shifted from a

centralized planning authority to forecasting and planning

departments within the enterprises.

� A contract labour system has replaced traditional lifetime

employment.

� Productions and reward systems moved from emphasizing

equality to rewarding efficiency and performance.



HR Practices

� In China, Human Resources in the industrial sector are

classified into two groups:

� Cadres-administrative staff or white collar employees

such as managers, engineers and senior technicians in

government organizations and in enterprises.

� Workers- lower level employees.

� Due to this division, there had been difference in wage scale

and performance appraisal.



Employment Policies

� The Chinese government attaches great importance to the

issue of employment, and takes employment as the first

priority of peoples livelihood and as the top strategy for

ensuring the stability of its society.

� The Chinese government has enacted Constitution of the

People's Republic of China, Labour Law of the People's

Republic of China, and other relevant laws and regulations so

as to protect the labourers' right to employment.



Employment Policies

�

Chinese gov

ernment has established the employment principle of "workers finding their own jobs, employment through market regulation

and employment promoted by the government", and formulated and

implemented a set of proactive employment policies, mainly including:

� Macroeconomic Policies

� Fiscal, Taxation, and Financial Policies

� Developing non-profit Public Posts

� Social Security Policy

� Improving the National Vocational Training System

�Unemployment Monitoring Policy



Requirements for Foreign

Employees

� Foreign nationals may work in the PRC only after

obtaining Employment Permits and Residence

Certificates except where they:±

are a professional technician or management personnel employeddirectly by the Chinese Government;

± hold a Foreign Expert Certificate issued by the Foreign Expert Bureau

and are employed by state authorities or public institutions;

± have specialized skills working in offshore petroleum operations

without the need to go ashore and hold a WorkP

ermit for ForeignPersonnel Engaged in Offshore PetroleumOperations in the PRC; or

± engage in commercial activities with the approval of the Ministry of

Culture and hold a permit to conduct temporary commercial activities.



Legislation for the employment of

foreign employees� The Administrative Regulations on the Employment of Foreign Nationals in

the PRC , promulgated on January 22, 1996, govern the employment of

foreign nationals in the PRC.

� Employment in Hong Kong, Taiwan and Macao are governed by separate

regulations.� The Provisions require that an employer must prove that a 'special need'

(defined as where there are requirements for a position for which there is

a temporary shortage of suitable local candidates) exists before employing

a foreign national.

�

Foreigners without residency rights seeking employment in the PRC must:± be at least 18 years of age and be in good health;

± have no criminal record;

± have a confirmed prospective employer;

± hold a valid passport or other international travel document; and

± be qualified for the position for which a 'special need' exists.



Minimum Wage Legislation

� The Ministry of Labour and Social Security set China's first

minimum wage law on 1 March 2004.

� Provinces, Municipalities and Autonomous regions are

allowed to legislate for their own minimum wage separate

from the national one.

� In February 2010, officials in Jiangsu province increased the

minimum wage to 960 RMB (about US$140.62) per month,

the same as Shanghai.

� From the 1st July 2010 thirty provinces -including Beijing and

Shanghai- raised their minimum wage to address thecountry's widening income gap. In Beijing the minimum wage

was raised by 20% to ¥960 a month. In Shanghai, which has

China's highest minimum wage, raised it to ¥1,120 a month.



Major HR Practices in China

�

Recruitment & Selection� Training & Retention

� Motivation & Reward System

� Work culture� Expatriate management



Recruitment and selection

� Companies in China recruit candidates mainly on basis of:

� Skills

� Employment history

� Total work experience

� Language abilities

� Career goals



Recruitment Techniques

Advertisements

Advertisements are not permitted in the news media without the prior appro

val of the local labour andsocial security department.

Advertisements are usually placed in local papers or specialised industry publications.

Job fairs

The common recruitment avenues are the labour market, personnel exchange seminars

The job fairs are sponsored by the Labour Bureau.

CampusPlacements

To recruit potential applicants, many companies regularly go to college or university campuses to interviewstudents

They can negotiate the job terms directly with the students

Global Image

The development of technology parks and technology development zones in China, there has been aconcomitant growth in the use of Western HR strategies among multinational companies.

Businessmanagement

services

� China has excellent technical education, there is a dearth of managerial training because, in the past,managers were promoted on the basis of their political party allegiance, and many parts of the countryremain provincialzed as shown in the HR inflexibility.

CorporateCo-

ordination

International Communications and PR companies are developing offices throughout China to assist localand overseas businesses work together effectively to meet the demands of Eastern and Western markets.



Selection Techniques

Interview

The interview is a common selection tool for many companies and is the dominant method

used. Punctuality is very important in China and in greeting the applicant the employer will

not look at them directly because lowering of eyes shows respect.

Tests

Technology tests, technical tests, problem solving tests and English proficiency tests.

Traditional companies rarely use psychological or aptitude testing, psychometric testing of abilities and attitudes, interests and motivations, needs and aspirations and/or personalmanagement style has been adopted from Western HR practices, especially in the Healthcareindustry.

BehaviouralEvent

Interactive role play, simulation exercises and leaderless group discussion (LGD).



Training and Retention

� Some of the major training methods are:

� Technical training(both expatriates & Local employees)

�Language training( expatriates)

� Pre departure training(expatriates)

� Training on work culture( expatriates)



Retention Strategies

R etentionstrategies

Use globalresources

Be aware of reluctance to

relocate

Consideration of officespace andlocation

Invest inworking

conditionEstablishcommunity serviceprograms

Plan socialgatherings

Keep HR communication channels

open

Use noncompete

agreements



Work Culture

Importance of Seniority

Giving Face(Gei MianZi)

Due Respect

Group Orientation Personal relationsor Guianxi

Features of Chinese work

culture



Locally HiredForeigner

Medical Benefit

Insurance

Housing Benefit

Car Benefit Home VisitAssistance

Locally HiredReturnee

Medical Benefit

Insurance

Housing Benefit

Car Benefit Retirement Benefit

Expat from

Western Countries

Housing Benefit

Insurance Medical Benefit

Home VisitAssistance

Car Benefit

Expat from

Asia Pacific

Medical Benefit

Insurance Housing Benefit


Children Education

Benefit

Expat from

Hong Kong

Medical Benefit


Moving/Relocation

Assistance

Insurance

Housing Benefit

Expat from

Taiwan

Home Visit

Assistance Moving/Relocation

Assistance

Medical Benefit

Insurance

Housing Benefit

ExpatriateAllowance



References

� en.wikipedia.org

� seiofbluemountain.com

�

lehmanbrown.com� chinese-culture.net

� chinaunique.com

� Mapsofworld.com� worldwide-tax.com

HR practices in China final

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