hr practices in china final
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8/7/2019 HR practices in China final
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HR practices in China
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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.
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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.
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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.
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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.
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Population Demographics and
Education Lev
els
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GDP
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Chinese Gestures
Okay Wishes
More
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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Major HR Practices in China
�
Recruitment & Selection� Training & Retention
� Motivation & Reward System
� Work culture� Expatriate management
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Recruitment and selection
� Companies in China recruit candidates mainly on basis of:
� Skills
� Employment history
� Total work experience
� Language abilities
� Career goals
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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.
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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).
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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)
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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
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Work Culture
Importance of Seniority
Giving Face(Gei MianZi)
Due Respect
Group Orientation Personal relationsor Guianxi
Features of Chinese work
culture
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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
Home VisitAssistance
Children Education
Benefit
Expat from
Hong Kong
Medical Benefit
Home VisitAssistance
Moving/Relocation
Assistance
Insurance
Housing Benefit
Expat from
Taiwan
Home Visit
Assistance Moving/Relocation
Assistance
Medical Benefit
Insurance
Housing Benefit
ExpatriateAllowance
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References
� en.wikipedia.org
� seiofbluemountain.com
�
lehmanbrown.com� chinese-culture.net
� chinaunique.com
� Mapsofworld.com� worldwide-tax.com