Human Resource Issues for an Expatriate Posting to China - Tenore Presentium Solutions - Case Study Example

Human Resource Issues for an Expatriate Posting to China Tenore Presentium Solutions (TPS) is an Australian engineering solutions company. It is a Multinational Enterprise (MNE) that has its headquarters in Sydney, Australia, and runs a global operation with a presence in three European countries; the United Kingdom, Belgium and Austria, in addition to Shanghai, China. It has a total workforce of about 2,500 people across the continents, with only 900 of them in Australia. The company is intending to send a new Human Resource Manager to the Shanghai office on a three year expatriate assignment, after which he will serve in one other offshore subsidiary before being repatriated. In China, he will play a senior operational role that carries personnel management and budgetary responsibilities. He is supposed to move with his wife and three children, all aged 18 and below. The Problem In the recent past China has become one of the economic superpowers of the world, and an attractive destination for multinationals due to its investment policies that are generally low-cost and markets that are broad (Yaghi et al.2012). There was therefore the move by TPS to set up a subsidiary in China in 2008, and this was intended to take advantage of the opportunities offered by China’s rapid economic growth and massive infrastructural projects. However, a majority of expatriate managers that have been sent to help in the running of operations there have either performed badly or returned before the end of their tours of duty. The top management attributes this trend to ineffective international HRM practices and lack of preparedness for the assignment. The specific areas of HRM failure were noted to be Performance Management, Recruitment & Selection and Training & Development. It is worth noting that the challenges have not been noted in the other TPS firms based in western countries, as a result of which it was concluded that the problems are related mainly to the cultural adjustment issues that normally face new postings to China. This report examines the issues surrounding the HR function in China, pointing out the aspects that the new manager has to be prepared for, and the best ways of managing the issues within the Chinese context. Contributing Factors There may be the stress of responsibility overload. According to Harris, the manager’s responsibilities are in most instances likely to be far more than at home, with one overseeing up to 5 or 10 times more employees than before. This, coupled with expectations from the headquarters which may also not be aware of the challenges can make life difficult during the posting. There is also family stress. The manager may be excited and challenged by the posting. However, they will need to work more as they have to adapt to the cultural setting and larger scope of responsibilities. There is however, the cutting off from spouses and friends that results, and the spouse may be experiencing the challenges of adjusting too. Such features can strain marriages or simply impair a manager’s focus and effectiveness (Yaghi et al.2012)..  The Challenge of Cultural Adaptivity   The main cause of failure for TPS managers is cultural inflexibility, and this may be conscious or unconscious. An inexperienced manager may be caught off guard by the Chinese cultural context (Boncori , 2013). According to Warner, in China, almost the entire population is either of Han or ethnic Chinese descent. The language used is Chinese that draws from the Mandarin dialect. While there are several dialects, only one kind of written language is used. In Australia, most people are Caucasian and English speakers, with less than 10% being people of Asian descent (220). This implies that the manager is very unlikely to have got adequate exposure to Chinese ways of doing things prior to going for the assignment. Impact on Recruitment and Selection One of the most serious challenges that should be expected is getting the right people for TPS operations in China (Pageup People, 2012). The recruitment and selection strategies in Australian are generally created with the consideration of integrating its multicultural labour-force. In China however, there is a considerable challenge that the manager should expect because the circumstances are different. According to Tian, one of the most noticeable differences with western contexts is that the kinds of applicants are generally grouped into four; the Chinese returnees, local Chinese, Overseas Chinese and Chinese repatriates. The manager will have to be aware of the advantages and disadvantages of sourcing workers from every category (Pageup People, 2012). In China, advertisements are often placed in the media, especially newspapers. However, unlike in the west, they are not supposed to be published without getting approval from the local social security and labour department. There can also be the placing of signs for instance at the gate. The other option is use of industry publications. The origin and names of companies are listed as the reputation of the company is helpful in attracting job applicants and the ability of the firm to get the best potential workers (Warner, 2013). A common avenue for recruitment is what is referred as the free labour market. According to Tian, these are exchange seminars sponsored by the National Labour Bureau. They host very many companies and even more job seekers. The scale and frequency of such fairs is growing all over China. In addition, campus recruitments are often used in recruitment. The company may go to a university or college campus to get students who will be interviewed. It is possible to directly negotiate the terms of the job with students and if agreeable, students are given the offer upon graduation. Such recruitments take place between October and December (Warner, 2013). Simulation exercises, Leaderless Group Discussions and Interactive role play are also gaining popularity in selection processes. The emphasis is on identification of experience and values as companies seek excellent working relationships within their workforces, and such is expected to come from employees who share norms, education and culture. The manager should in this regard avoid emphasis on diversity, as this has less value when compared with back in Australia (Boncori, 2013). Interviews are advisable in China as they are the most popular approach to selection. Punctuality is however emphasized. The interviewer is however not expected to look at the interviewee directly as lowering of eyes indicate respect. The manager should therefore not be frustrated or read lack of interest when many employees avoid eye contact, which in the west is associated with sincerity, interest and confidence. In interviewing the candidates, the manager should expect much modesty. This is because unlike in the west where one will focus on displaying their individual achievements in the past, such achievement is considered by the Chinese to be elitist and a cause of disharmony within groups. A manager who is not prepared may find it difficult to find the right people for jobs if they wait for such traits to come up in a candidate (Pageup People, 2012). Recruitment and selection in China and Australia has similarities. This is because they both have adopted imported procedures, strategies and policies that have been tested in global, multinational companies. However, cultural differences and organisational culture bring in obligations and limitations upon job applicants, leading to differences that the HR manager should always keep in mind. In China for instance, rote learning is common, and is due to teacher-centred approaches to education and family enculturation. It is further reinforced by means of group harmony and repetition of knowledge. This is unlike Australia where there is emphasis on deep or conceptual learning that arises from student-centred educational approaches that are supported by the school and family and reinforced by means of building of knowledge, model formulation and individual differences. There is much competition for the best talent, and this has destabilized the market and led to creation of a job-hopping culture among some categories of workers. While in the past local firms were seeking to attract good employees away from multinationals and into their service, the situation is fast changing, with the best mostly heading to local firms and being enticed by the multinationals (Pageup People 2012). As a sought after feature in recruitment and selection, approaches and understandings of leadership are usually inconspicuous and low key, unlike the decisive and courageous features that are called for among leaders in western organizations. In recruitment and selection also, the idea of employee empowerment should not be emphasized. This is because within the Chinese context, such empowerment can only end up contravening the held respect for hierarchy, leading to confusion and disorder (Pageup People, 2012). Although the collectivist culture in the country favours loyalty above the western emphasis on competencies, the focus of recruitment processes is often seeking objective and transparent practices that are guided by the requirements of the job. However, some nepotism still exists in the processes, so the manager should neither be shocked nor be extreme in seeking to change it suddenly as this is one of the issues that he will need to adjust to (Warner, 2013). Luckily, common practice is nowadays towards avoidance of recruiting one’s relatives, use of criteria that is entirely job-based for vetting candidates, integration of career development in recruitment and selection and provision of appropriate and western informed training to the managers who are doing hiring (Pageup People, 2012). Recruitment is among the HR functions in China which are not too culturally-sensitive, so that a MNE like TPS can at least afford to apply its global processes and systems in the task. However, some of the selection practices for instance psychometric evaluations and assessment centres are not very universally applicable in the country. Companies are less rigorous in selection processes and this is why in some cases they can opt to take in acquaintances or relatives (Warner, 2013). Performance Management Managing performance requires that the manager be aware of the role of Confucianism. Its teachings are strongly embraced in Chinese behavior and values. In it, there is an emphasis on self-discipline, order, obedience, compassion, loyalty, morality and giving up of self-interest for the sake of group interest. There is also an explicit respect of hierarchy. This is in contrast to the west where high achievers are idolized and merit is valued most. Although there is a continuous change in values, the basics are still worth remembering if one is to success in the HR assignment. This implies that workers will be looking up to the leaders to be told what they should do and even how to do them. Introducing the idea of autonomy that would have been celebrated in Australia might give rise to suspicion and therefore negative effects on productivity. Performance management in China has to adhere to four main cultural features which according to Tian (2007 ) are: a) Personal Relations. There is a common practice of mutual favours between authorities and MNEs. Wu explains that within the organization, there is also a significant amount of it, as it is only through having good personal relationships that the manager can ensure frank and open communications with other managers and even subordinates (Tian 2007). b) A lot of respect for hierarchy and age. The Confucian beliefs that are predominant among the Chinese call for respect of all seniors or superiors. It is a basic requirement at the workplace and inevitably results in a centralized and unquestioned kind of decision-making c) Promotion of harmony and upholding of pride face. The two are essential aspects in Chinese social life. In seeking consensus within any group, there is often the attempt at saving face. For instance, if a superior criticises his junior in the other people’s presence, the employee may be excessively affected due to extreme feelings of humiliation d) Emphasis on groups. In China, individuals will tend to identify with some unit, team or group in which they are members. As a result, they quickly distinguish between outsiders and insiders as a result of their collectivist orientation In the typical Chinese setting many employees will tend to have a mentality of entitlement, for instance if they are well qualified. This is even if they do not display the high standards of performance necessary for meeting their expectations. Employees expect job security whether they are performing or not. The HR manager should therefore be ready for a greater challenge of inspiring workers to drive innovation, accept accountability and seek excellence in performance (Pageup People, 2012). In the Chinese system, employment of surplus workers is normal and even given financial incentives. In addition, HR management is mostly founded on relationships. While there is a rising trend in short-term job contracts, most people still expect long-term work (Boncori, 2013). Another significant aspect of Confucian teachings is what is referred to as the Doctrine of the mean. According to Harris, this requires that everything has to be done in moderation and never in the extremes. This can be a cause of frustration for the manager who if not culturally sensitive, will be disappointed by the fact that no one wants to stand out. At the Chinese workplace, trying to be a high-achieving individual is considered a contravention of the teaching. The collectivist cultural character requires that all rewards have to be shared (Boncori, 2013). If the western approach to rewards where the best person is recognized and praised is applied, it will only be destructive because the individual will be isolated by the group as a traitor. Individual achievement leads to ostracization, and in many instances the person will opt to deliberately lower their own performance as a way of correcting the mistake they have committed. For performance management, immediate feedback on individual performance is never applicable in the Chinese context. If a manager notices that correction has to be done immediately, they are not supposed to reprimand or give the order to the person as it would make them lose face. Even when constructive, valid or well-intentioned, the action is likely to give an opposite effect of what it would have done for instance in Australia. The effect is demoralizing the employee. Employees typically want to be treated equally within an organization and with others who work elsewhere but do the same jobs and will expect some kind of rewards for their work. For instance, there are some who will want to be promoted after receiving training (Warner 2013). In global performance management the factors will impact on the effort put into the task, and the Chinese are no exception. The reaction of people to managerial authority also varies depending on culture. Australia and china are different because for instance Australia has for long been characterized by openness, democracy and free markets, unlike China which was run as a closed communist society for many years. Considering the background, China’s managerial approaches are more autocratic when compared to Australia where management is mostly consultative and everyone participates fully. These are expectations which the manager on assignment is supposed to remember, so as to be within the employees’ expectations (Tian., 2007). Aspects of Caution for the Expatriate Manager The successful management of people in the Chinese context will require a thorough understanding of the cultural environment, and the new manager will need to be trained in this, both before the assignment and continuously in the course of working in China (Wu, 2008). He will need to understand the cultural elements then use the information in daily decision-making, rather than attempting to impose what has been learnt or experienced back home in Australia. He will need to take note of some traditional values especially; a. On personal relationships. He must remember to uphold these as a way of enhancing management development at TPS and boosting loyalty and ties with the employees. It should also be remembered that companies are generally expected to feel obligated to provide or create jobs for the people while also retraining excess staff so that they may be given other roles b. On respect for hierarchy. The HR manager should not go expecting input from juniors at all times as this might lead to frustration during the assignment. Showing any kind of disrespect to elders or superiors should also be avoided as it will cause displeasure among employees and erode the manager’s authority thereby making his work difficult c. On upholding of pride. Losing face breaks personal relations and can diminish communication with employees completely. It is a factor in ensuring an effective internal management. The manager should be aware that unlike in Australia, communication in China needs to be indirect, with the intention of minimising loss of face while facilitating harmonious relationships d. On groups. The manager should seek to exploit this element of group working and not be disappointed when something that he expects to be an individual task draws input from multiple sources. Conclusion A successful posting for the new manager will need him to be culturally sensitive and appropriately adjust to the Chinese setting, which is unique in its ways. In order to succeed and not end up returning or being ineffective, the Australian HR manager will have to realize that it takes more than their current experience, leadership or functional expertise to thrive in China. They will have to be in touch with the cultural features and set their mind to adapt to the necessary approaches and thoughts in a different nation foreign world. The manager will need to programme himself to be more open-minded, patient and willing to learn. Otherwise, the assignment is unlikely to be worth the posting. Works Cited Boncori, I. (2013). Expatriates in China: Experiences, Opportunities and Challenges. Basingstoke: Palgrave Macmillan, Harris, M. (2012). Handbook of Research in International Human Resource Management. Hove: Psychology Press, Pageup People. (2012). Into China. Melbourne: Pageup People, Tian, X. (2007). Managing International Business in China. Cambridge: Cambridge University Press, Warner, M. (2013). Making Sense' of Human Resource Management in China: Economy, Enterprises and Workers. London: Routledge, Wu, J (2008). An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market. International Journal of Business and Management,. Vol. 3 (12): 169-174 Yaghi, B Wang, Z and Youell, N. (2012). Enterprise Performance Management: The Chinese State of the Art. 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