Oct 3, 2018 in Business

The rise of China over the last decades as a key economic power has been essential to the most recent phase of globalization. The country has acted in response to the movement in fiscal and business environments by instigating reforms in human resources management exercised by not only State-Owned Business enterprises but also Multinational Enterprises. This procedure of transformation accelerated at a faster rate subsequent to the year nineteen hundred and ninety five (1995). These occurrences were triggered by the New Labor Law. Various studies have been conducted regarding this area. China pioneered the so called Open Door Policy in the year nineteen hundred and seventy eight (1978). Ever since this particular time, the country has started the Chinese Economic Reforms. It has established movement in societal and management customs. The intention of this paper is to evaluate the literature on the topic of human resource management practice(s) in China.

Literature Review

The human resource management practices in China are influenced by the Chinese civilization. In Confucian, there are 5 basic associations which are referred to as Wu Lun and includes first and foremost the sovereign and subject. The second category of the associations is that of a father and a son. The third category is that of an elder brother and a younger brother. The fourth category is that of a husband and a wife. The last category of the relations is that of friends and friends which specifically depicts the vertical relationships between superiors and inferiors (Selmer, 1997). Prior to the Chinese Economic Reforms, the bureaucratic hierarchical administration structure was widespread in each and every Chinese State-Owned business enterprise. The Chinese government seized power in approximately each management activity.

In human management, business managers were selected by the government organizations. Iron Rice Bowl which is also known as lifetime employment was employed to each member in the organization. Work assignments were determined by the Labor Bureau. On the other hand, wage was resolute by the Government. Sponsorship was largely dependent on superiority and the involvement to the communist party. As a result, each person took pleasure in an equivalent quality of life. Consequently, since the actions were rigorously centrally organized, there was no human resource management practice prevailing at that particular time. The Chinese government’s Labor Bureau was in actual fact an administrative unit. The main task of this Bureau was to put into practice the guiding principles and processes issued by the Government.

Chinese management practices fashioned the link between Confucianism and Chinese Communist techniques of management. During the past 20 years of Chinese Economic Reforms, an accord existed amongst the Chinese headship. This accord specified that the bureaucratic hierarchical management planning system had to be amended (Chen, 1995). The task of manufacturing and marketing of goods was handed over to the Provincial-level State ventures. Reforms in Human Management had in addition been commenced by the government.

The first major reform was the Iron Rice-bowl eradication. The second reform was the addition of an incentive scheme into the wage system. The third reform was the setting up of the labor market. The ultimate reform was the opening to both the State-Owned Enterprises (SOEs) which are abbreviated as and Multinational Enterprises (MNEs. (Chen, 1995). Warner (1995) stayed doubtful that China shall actually start human resource management practice. He chose to converse about human resource management practices with Chinese traits. China’s Human Resource Management practice at the premature era of Chinese Economic reforms was in actual fact the personnel administration in work unit rather than Human Resource Management practices (Goodall and Warner, 1997). Nevertheless, this implies that human resource management practices had started. However, it was being robustly manipulated by Chinese civilization. It’s likely to launch novel technology practices either in China or in the USA without further complexity. Nonetheless, Human Resource Management practice involves supervising individuals. These individuals are subject to the influence of civilization, mainly when those civilizations have been expanded over hundreds or even thousands of years.

Due to the fact that human resource management is a Western- expanded management theory, it’s more likely to occur 1st in Multinational Enterprises, in which Chinese management practice regularly interrelates with that of overseas investors. Both Warner and Child are prominent scholars in Human Resource. Both had special interests in China’s human resource management practice. Warner’s publication concerning China’s human resource management practices may be dated way back in the year nineteen hundred and eighty six (1986). Child’s publication concerning China’s human resource management practices may be dated way back in the year nineteen hundred and ninety (1990).

Warner examined Chinas’ human resource management practices through the contrast of 3 joint ventures. Furthermore, he investigated 3 State-Owned Enterprises. His research in the Chinese capital, Beijing was conducted in the winter of the year nineteen hundred and ninety five (1995). In the year nineteen hundred and ninety eight (1998), Warner wrapped up by indicating that the shifting face of human resource management in China was at the status quo. This status quo was at its relative convergence. Warner expanded a model of theoretical outline of China’s human resource management (Warner, 1998, p23).  His model consisted of 3 elements. The first element is a macro-economic market environment. The second element is the State labor legislation. The third and the ultimate element is the firm-level human resource policy-determination. Market factors influence the labor legislation. Furthermore, they determine the organizations’ human resource guiding principles. Conversely, organizations’ guiding principles for instance lay-offs react to fiscal market, and hence are exposed in the constitution of labor legislation. Warner model’s assists in gaining a comprehension that China’s human resource management is within the evolution status. Moreover, it clarifies the reason as to why progress in this area has been time-consuming owing to the exterior and interior interface between the elements.

Evidences of Change in China’s Human Resource Management Practices

A typology of China’s human resource management practices was suggested by both Goodall and Warner (1997) (see appendix I). This typology was established from a matrix group of 4 dimensions. In this model, Pure iron rice-bowl stands for characteristic human resource  practices in State-Owned Enterprises all through the era of the year nineteen hundred and forty nine (1949) to nineteen hundred and seventy nine (1979) to be precise post-revolution and pre-reform. Hybrid I explain an institution whereby the bulk of human resource practice is of the iron rice-bowl kind. This kind of human resource management practice is characterized by marginal of diverse practices. These practices aren’t distinctive to the older status quo. On the other hand, Hybrid II explains an institution in which the bulk of human resource practice is introduced into the country from certain countries of the world because of market forces and in addition foreign investors. The majority of Multinational Enterprises fall under this group. An institution which is categorized as Pure imported is basically free from Iron rice-bowl practice. In China, it’s doubtful that any institution, for the next several coming years, shall have pure imported human resource practice(s). The typology demonstrates that China’s Human Resource Management practice in Multinational Enterprises in addition to in State-Owned Enterprises has steadily transformed.


Human resource management is an acknowledged and functional management theory in USA and many industrialized nations of the world. Nevertheless, it’s still deemed to be novel as far as China is concerned. The existing literature on human resource management practices in China reveals that Chinese management is intimately linked with Chinese civilization. China didn’t have human resource management practice at the commencement of the Chinese Economic Reforms. Following the Chinese governments’ issuance of the New Labor Law, changes in human resource management practices are now well established in State-Owned Enterprises.

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