By Anthony Goh and Matthew Sullivan.Year in and year out, western companies rate human resources as among the biggest challenges of doing business in China. Below we discuss what we consider some of the China’s major HR challenges and how to address them.
Initiative and Taking Responsibility
While western employers tend to delegate responsibility and have flexible lines of authority, Chinese workers are accustomed to a more hierarchical structure in which each person has a clearly defined role. Such differences can often lead to tensions between western managers who are accustomed to employees who take their own initiative, and Chinese staff who have been trained from a young age to always follow instructions from the top.
In order to address this issue, it will be important for your company to carefully consider what methods of communication and monitoring will best motivate your employees. In our experience, a method to consider regardless of the size of the company, is to divide employees into small teams which each have a clear leader who oversees the group and reports directly to his or her superior. This hierarchical structure will enable you to clearly track the status of each staff members work performance and provide the structure Chinese employees expect.
In addition, having a clear set of procedures regarding incentives for outstanding work and punitive measures for substandard performance can be motivating to employees. One way to achieve this goal is by tying salary and benefits to specific performance criteria. For example, it is common for companies in China, including ours, to give their employees a monthly food allowance which is separate from there salary. Employees are also required to clock in each day when they arrive at work. If an employee is late to work more than a certain amount of times than their monthly lunch allowance can be revoked. By tying the lunch allowance to completing this task you can incentivise your employees to arrive on time. The principle of linking the granting of a certain benefit or title to the completion of a specific task should be tool your company uses to motivate your Chinese employees to work efficiently.
Face— Being Careful with Reputation
The importance of maintaining face, or a good public reputation within one’s network, is an important cultural convention in Chinese society. This means that employees will be reluctant to admit mistakes or criticise others in public. This makes it difficult to conduct group meetings in which a superior critically evaluates the performance of different team members. It also means that team members may not be willing to openly discuss different ideas. Do not be surprised that if you ask for employee opinions at meetings and they respond with silence. This does not necessarily indicate that they completely agree with an idea or don’t have any other opinions but rather that they are hesitant to discuss a controversial subject out of fear of making themselves or their colleagues lose face.
To address this cultural phenomenon we suggest meeting individually with each employee on a regular basis. In one-on-one meetings, without the fear of losing face, Chinese employees will be far more willing to share their thoughts on controversial subjects. At these meetings you can also offer honest feedback, including critical comments on the employee’s performance. Your staff will be more willing to admit responsibility for mistakes when they are just speaking with one person than in front of a group.
Finding and hiring qualified employees is among China’s major HR challenges. As in the west your company can look for job candidates through job search websites, employment agencies, and headhunters. However, it may difficult to verify the job what a job candidate has written on their resume. Also, even if you find a candidate who appears qualified and interviews well you may discover that after they start working they fall short of expectations.
There is no easy solution to efficiently finding qualified employees in China. One way to deal with this issue is to hire employees with a two month probationary period. This period will give an opportunity to see if your new hire can actually perform on the job. You may find that your new employee does not perform as hoped and it may be necessary to hire and fire several people for one position before you can find someone who is qualified for the job. This process can be one of the most time consuming parts of doing business in China. However, by spending the time to find the right employee in the beginning it will save you time, money, and headaches down the road.
It is imperative that your company has a Chinese language employee handbook which clearly spells out each employee’s role, responsibilities, and rights as a member of your company. When an employee is hired they should review and sign a copy of the handbook. In addition, we suggest that careful minutes be taken during company meetings which are also then signed by each employee. These measures ensure that each member of the company is aware of the policies and of the communications regarding progress of work.
If an employee is underperforming or not following company rules, the process of letting them go must be approached with caution. As a result of China’s 2008 Contract Law it has become far more difficult to terminate a Chinese employee’s contract without strong evidence of underperformance or wrongdoing. Foreign companies which have fired employees without clear documentation that they had informed the employee they were underperforming or breaking company rules have been subject to lawsuits. Having meeting minutes recorded along the way can help serve as documentation of underperformance or wrongdoing. Additionally, we suggest providing employees with a written notice regarding their performance on a quarterly or biannual basis which they should sign as further tracking of performance.
By Anthony Goh and Matthew Sullivan. Mr. Goh is President and Mr. Sullivan is Director of Business Development and Communications at US-Pacific Rim International, Inc. (USPRI, www.us-pacific-rim.net). If you have questions, comments, or would like to learn more about USPRI you can contact Mr. Sullivan at [email protected]
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