Strategic human resource management, firm performance, and employee relations climate in China

Abstract

We examined strategic human resource management (SHRM) and human resource practices in the People's Republic of China to assess the impact of these practices on firm performance and the employee relations climate. We also tested whether firm ownership moderates the above relationships. Empirical results from a sample of Chinese firms from various industries and regions showed that the levels of adoption of SHRM and HR practices were lower in state‐owned enterprises (SOEs) than in foreign‐invested enterprises (FIEs) and privately owned enterprises (POEs). Both SHRM and HR practices were found to have direct and positive effects on financial performance, operational performance, and the employee relations climate. However, the moderating effect of ownership type was significant for financial performance only. © 2008 Wiley Periodicals, Inc.

Challenged and satisfied: the role of organisational ownership and employee involvement

“…We consider this is significant given that different organisational ownerships' embedded institutional elements influence organisational strategies and practices, which might affect the type of stressors to which an individual is exposed, and in turn lead to different individual outcomes. Existing studies have demonstrated the moderating effect of ownership on the HRM-firm performance relationship in the Chinese context (Law et al, 2003;Ng & Siu, 2004;Ngo et al, 2008;Wei & Lau, 2008).Providing further support to the importance of ownership, we found that organisational ownership can significantly impact on the stress-job satisfaction relationship. This dimension requires consideration both as a potentially important variable in research on HR practices; it also needs to be disaggregated and its key components distinguished and analysed separately.…”

“…We consider this is significant given that different organisational ownerships' embedded institutional elements influence organisational strategies and practices, which might affect the type of stressors to which an individual is exposed, and in turn lead to different individual outcomes. Existing studies have demonstrated the moderating effect of ownership on the HRM-firm performance relationship in the Chinese context (Law et al, 2003;Ng & Siu, 2004;Ngo et al, 2008;Wei & Lau, 2008).…”

“…Political interference and SOEs' bureaucratic structure reduces their flexibility in managing people. In contrast, FIEs generally face fewer institutional constraints, adopt a more market-oriented approach to managing their employees and enjoy greater autonomy and flexibility in employment than SOEs (Law, Tse, & Zhou, 2003;Ngo, Lau, & Foley, 2008;Wei & Lau, 2008). Although China's SOEs have gradually adopted more Western style HRM practices, they are still less market-oriented than FIEs (Zhu et al, 2005).…”

Performance appraisal in Western and local banks in China: the influence of firm ownership on the perceived importance ofguanxi

“…As such they suggest that further convergence in HRM practices between the west and China is likely over the coming years. However, other authors note that SOEs tend to face significant constraints in the implementation of results-8 based performance appraisal because of long-standing institutional factors, such as the conflicting policy pressures from local government, central government and trade unions (Ngo, Lau and Foley 2008). Moreover, the skills and experiences of managers in SOEs tend to be somewhat limited and initiating change can be difficult when many employees continue to identify with pre-reform norms and values (Warner, Goodall and Ding 1999;Ngo, Lau and Foley 2008).…”

“…However, other authors note that SOEs tend to face significant constraints in the implementation of results-8 based performance appraisal because of long-standing institutional factors, such as the conflicting policy pressures from local government, central government and trade unions (Ngo, Lau and Foley 2008). Moreover, the skills and experiences of managers in SOEs tend to be somewhat limited and initiating change can be difficult when many employees continue to identify with pre-reform norms and values (Warner, Goodall and Ding 1999;Ngo, Lau and Foley 2008). In comparison to SOEs, FIEs face fewer institutional constraints and have greater flexibility and autonomy in how they implement and manage their HRM systems, including performance appraisal (Chow, 1992;Warner, Goodall and Ding, 1999).…”