After the adoption of the “Open Door Policy”, there was an enormous change in the Chinese style of management, in effect the Deng Xiaoping’s government declared the end of the iron rice bowl system. Initially in the iron bowl system there was job guarantee for everyone, without any job preference people had to accept the job assigned to him or her and stay with it for life. After the Labour Policy Reforms of the 80’s, for the first time the workers were permitted to seek for the job they preferred, rather than the assigned work which were appointed by a central Bureaux. There was no job guarantees and the system of lifetime employment came to an end and Contract system was adopted.
The old tradition of "job for life" has been the cause of the low turnover in the Chinese and Japanese enterprises. Initially the recruitment was done through universities, schools etc. and the children of existing workers were given priority to come and take over the job of their parent. But as things changed, after the new reforms the concept of job for life came to an end and as mentioned earlier contract system came in. The labour Bureaux that was dealing with work assignments initially became a source of guidance. And now the selection procedures have become very competitive, a vacancy is advertised in agencies and local new papers and there are several examinations and interviews for one job. People have to compete with each other on the basis of their abilities.
Recruitment and selection: Before the reforms of the 80s, recruitment and selection was of almost no significance in the Chinese system of HRM. As mentioned above all people were promised a permanent employment, job security and cradle-to-grave welfare coverage. After the reforms individuals were allowed to search for jobs and sign contracts for 2-3 years. By mid 90’s this Labour Contract System had become the buzzword in State Owned Enterprise and other Chinese Enterprises.
“In the early 1980s, foreign-investment firms (FIEs) started to use short-period contracts. In 1986, Chinese state enterprises began giving such fixed-term labour contracts to new employees, normally of four years maximum duration. As part of the ‘three systems reforms’ (San Gaige), this procedure was extended in 1992 to all eligible employees in state enterprises in North East China; by 1995, that was implanted in a wide range of SOEs.” (Keith Goodall & Malcom Warner 1997: 574)
According to Goodall and Warner later on these laws were further relaxed. The present law states that all employees must have a signed contract between the management and the workers either through the trade unions or through the workers representatives.
Initially Chinese enterprises were overstaffed, and the production level was considerably low. There were two or three or more employees where only one was needed. The overstaffing was a problem for many enterprises, but because of legal regulations enterprises couldn’t sack these employees and had to keep them even if they were of no use. But after the new reforms the Managers were allowed to dismiss the employees working for them. Under the new reforms companies are allowed to “decide the time, conditions, methods and numbers when hiring new employees” (Min Chen). Companies can now “freely determine the scale of wages and bonuses according to each employees work skills, work intensity, work responsibility, working condition and actual contribution” (Min Chen). Initially the government took all the decisions and the enterprises had to strictly follow them.
The liberalisation of the rewards system: Under the new reforms companies are allowed to “freely determine the scale of wages and bonuses according to each employees work skills, work intensity, work responsibility, working condition and actual contribution” (Min Chen). After the reforms were introduced the pay was also increased; it also introduced the bonus system. “Before the present reforms were introduced, the ideology behind the Chinese pay policy was to keep the rates of pay as low as possible and to use normative or symbolic rewards as performance incentives.” (Branine)
The case of South Korea (hereafter referred to as Korea): In the last few decades Korea has transformed it self from an agricultural country to a highly industrialised nation. It is one of the members of the four little dragons of Southeast Asia. Korea lacks natural resources and in the absence of natural resources, Korea’s strong labour force has served as the foundation of its modern economic development. Korean population is highly educated with almost 98% of the population knows to read and write. Koreans place great importance on education of their workforce, and most of the Korean graduates prefer to go into higher education.
“Korea’s HRM system was seen by many as playing an integral role in this waxing and waning of the economy as in turn has influenced by the cultural milieu” (Rowley & Bae 2002: 530).
The Korean management system is very similar to that of the Japanese management system, but they tend to show some notable differences to. According to Rowley and Bae the key factors that have influenced the Korean management system have been the Japanese and the Americans, the Confucianism and collectivism beliefs, Inhwa, YonGo, authoritarian leadership and sharp distinction between the management and the employees.
The Korean Chaebols have led to massive reforms in the Korean Economy after the war. And as a result Korea has emerged as a technologically advanced nation in Asia. The Korean Chaebols are similar to the Japanese Keiretsu, and are large companies, which are mainly, owned and managed by families or the holding companies. The Korean Chaebols have close links with the government and have received heavy funding from the governments. There are more than 30 Chaebols in the Korea; some of the famous ones are Samsung, Hyundai & Daewoo, which have made way into the international markets around the globe. “The priorities of Korean companies’ human resource management include recruiting the best candidates, operating on the job training programs, and instituting reward and appraisal system” (Min Chen).
Recruiting & Training in Korean Firms: According to Chen, Korean firms tend to categorise their employees into 3 categories: the top management, the basic permanent employees and temporary employees. The strategy used by Korean firms is to hire the best employees for the firm & selection is generally based on different methods depending upon the size of the firm. Many large Korean companies prefer to recruit their white-collar employees directly from universities and colleges through an exam, recruiting also involves strong references, English proficiency, knowledge in the field, interviews etc. The recruitment is very competitive in Korean firms, and the Koreans generally do not job hop, long-term job security is an important issue. Most of the large companies recruit twice a year mainly in June and November, and the smaller firms tend to recruit only once a year. Personal interviews are a growing trend in many Chaebols. According to Chen, once a new candidate is hired he is assigned to major departments such as Finance, Planning where they are given a 7-8 days in house training. According to Usong. et. al. studies of the Korean firms have revealed that the young candidates are highly motivated towards the company and the country. Companies prefer young candidates, as they are more capable of taking risk and making quick decisions. Min Chen also states that many Chaebols have their training centres for the employees and they put great emphasis on employee development and on the job training like the Japanese.
Reward and Promotion System: The reward and promotion system is based on seniority level, which highlights the Japanese style of management. “Korean companies have combined seniority with performance in distributing their rewards” (Min Chen). Korean companies pay the salary to employees on the seniority basis but the bonuses are awarded on performance basis.
Promotion is an important matter for any employee around the world. “In many Korean companies, top management is actively involved in promotion decisions. Promotion is based on number of criteria: seniority, performance, personality, family ties, school and region”. (Min Chen)
Severance & Retirement: In contrast to the Japanese firms and Chinese firms the Korean firms have never hesitated to layoff their employees at any level when the business is going down. The age of retirement is not fixed but generally a person is expected to retire by mid 50s or early 60s. The management staffs usually have an extended retirement age.
The case of Algeria: Algeria is a less developed country, and is highly dependent on its natural resources, the country is rich in natural gas. The government attracts foreign investment on the basis of its natural resources and cheap labour. Other important sectors are agriculture, manufacturing, construction and administration. As Algeria was under the French rule until mid 60s, the HRM strategy of Algerian reflects some of the French system. At present the country is facing high rate of unemployment and the standard of living are quite low.
Recruitment and Selection: Initially recruiting of the staff was under the National Manpower plan. Later influenced by other countries even Algeria moved to the equal opportunity employment system as seen in most of the western countries by using advertising through newspapers and job agencies, interviews and testing applicants abilities and skills. But most of the jobs even today are filled by traditional system of recommendation from family and friends, which is also a very common system in other countries like India, Pakistan & many other 3rd world countries, where many vacancies are not even advertised. According to Branine in his study of Algerian organizations more than 83% of the organizations advertised only posts that required managerial or professional / technical skills. Similar to other countries, Algeria also established Bureaux for job seekers and employers to advertise vacancies, but these facilities rarely work in such countries because of the informal system of recruiting through friends and family.
Branine states that an applicant can be traumatised while looking for a job in Algeria if she / he goes the without a piston, because of the amount of papers that an applicant has to produce. Each applicant has to get his birth certificate, nationality certificate, qualification certificate, a hand written letter, photographs, prepaid envelopes etc. together all these certificates make up the applicants Dossier, sometimes a dossier should include certain certificates of the parents. An incomplete dossier is immediately rejected and if the person fails to get the job the dossier is not returned back to the applicant. If the job is for a manager there are certain characteristics that a manager should posses before applying for a job such as good language skills in French even though the national language is Arabic and all applicants should have a decent legible handwriting. (Branine 2001)
“In a society such as Algeria, where un-or-under employment is the norm, work takes on a meaning that is radically different from that in advanced industrial countries. ‘In such a context, competition for a job is the foremost form of the struggle for existence; a struggle which, for some begins each morning in anxiety and uncertainty.” (Ian Clegg 1971:171)
Training & Development: According to Branine the level of training given to employees varies from one organization to another, some of them don’t emphasise on staff training at all.
“The decision on who should or should not be on a training programme is made by managers who normally see training as a cost to the organization and a favour to their employees rather than as an investment for the future. Budgets for training are very limited….” (Branine 2002: 143)
Conclusion:
These countries discussed above dint have any terms and concepts of the west such as Personnel and Human Resource Management. But the management systems of Korea and China are dynamic in their own way and have contributed to the development of new and strong economies of the 21st century. The traditional and cultural beliefs of these countries have exerted powerful influence on the formation of the two management systems.
REFERENCES:
Korean enterprise the quest for Globolization – Gerardo R. Ungson, Richard M. Steers, Seung-Ho Park (1997) Harvard business school press.
Asian management systems – Chinese, Japanese, and Korean styles of business – Min Chen (1995) Routledge; London
Oiva Laaksonen management in China during and after Mao – Walter de Gruyter (1988)
International comparisons in human resource management- edited by Chris Brewester & Shaun Tyson (1991), Pitman publishing
The management of human resources in Chinese industry Malcom Warner (1995) M. St. Martin’s press
Workers’ Self- Management In Algeria – Ian Clegg (1971) Allen Line The Penguin Press
JOURNAL ARTICLES:
- Change and Continuity in Chinese Employment Relationships – Mohamed Branine, New Zealand Journal of Industrial Relations, Vol. 22 No. 1 1997 pp. 77-94
- Algeria’s Employment Policies and Practices: An overview, Mohamed Branine International Journal of Employment Studies Vol. 10, No. 1 (2001)
- New China - old ways? – Philip Lewis Employee Relations Vol. 25 No. 1 (2003) pp. 42-60
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Management in the less-developed countries: a review of pertinent issues, challenges and responses -Rachid Zeffane, Robert Rugimbana Leadership & Organization Development Journal Vol. 16 Number 8 1995 pp. 26-36
- Human Resource in Sino foreign joint ventures: selected case studies in Shanghai, compared with Beijing – Keith Goodall & Malcom Warner International Journal of Human Resource Management Vol. 8 No. 5 October 1997 pp 574.
- Globolization and Transformation of Human Resource Management in South Korea - Chris Rowley & Johngseok Bae International Journal of Human Resource Management Vol. 13 No. 3 May 2002 pp 530.
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