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Presented by:Presented by:

Tat on LoTat on Lo

Caroline WongCaroline Wong

Ki Ming ChanKi Ming Chan

Victor LeVictor Le

Byron MaldonadoByron Maldonado

Performance Appraisal ofPerformance Appraisal ofInternational EmployeesInternational Employees

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TodayTodays Contents Content

Tat OnTat On ---- Introduce the topic and explain the importance of the topic toIntroduce the topic and explain the importance of the topic toIHRM.IHRM.

CarolineCaroline ---- Present the theoretical framework and existing HRM andPresent the theoretical framework and existing HRM andIHRM concepts and systems.IHRM concepts and systems.

Ki MingKi Ming ---- Present a full profile of the target country and show howPresent a full profile of the target country and show howdifferent the cultures are between U.S. and China.different the cultures are between U.S. and China.

VictorVictor ---- Present on the practical issues and IHRM questions dealing withPresent on the practical issues and IHRM questions dealing withChina and U.S.China and U.S.

ByronByron ---- Present the research findings and results of data analysis andPresent the research findings and results of data analysis andexplain how it is linked to what we have studied through the course andexplain how it is linked to what we have studied through the course andconclude our presentation and provide suggestions for the class.conclude our presentation and provide suggestions for the class.

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What is Performance AppraisalWhat is Performance Appraisal

A communication tool to measure eachA communication tool to measure eachindividual's contributionindividual's contribution

To evaluate talent and achievement with sensibleTo evaluate talent and achievement with sensibleconsistency and accuracyconsistency and accuracy

To help distinguish barriers to top performanceTo help distinguish barriers to top performance

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Why Appraise PerformanceWhy Appraise Performance

PeriodicPeriodic evaluationevaluation helpshelps mangersmangers toto havehave aa betterbetter understandingunderstandingofof eacheach employee'semployee's skillsskills withwith thethe goalgoal toto facilitate,facilitate, traintrain andanddevelopdevelop abilitiesabilities andand powerpower toto theirtheir employeesemployees

AA chasechase toto assessassess jobjob development,development, encourageencourage interestinterest andandenhanceenhance jobjob performanceperformance byby pointingpointing outout thethe developmentdevelopment andandrecognizingrecognizing productiveproductive workwork

AA feedbackfeedback systemsystem thatthat mightmight otherwiseotherwise bebe overlookedoverlooked

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Importance of IHRMImportance of IHRM

Increased focus on internationalIncreased focus on internationalcompanies and on the human resourcecompanies and on the human resourceissues, functions, policies and practicesissues, functions, policies and practices

that result from the strategic activitiesthat result from the strategic activitiesof theseof these

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HRM in ChinaHRM in China

HRM not considered strategicallyHRM not considered strategicallyimportant in their globalization process.important in their globalization process.

Globalization increasing more attentionGlobalization increasing more attentiongiven towards subject.given towards subject.

Shortage of experienced HRManagers inShortage of experienced HRManagers inChina orHRM materials in Chinese.China orHRM materials in Chinese.

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Performance AppraisalPerformance Appraisal

performance appraisal, if it is to succeed,performance appraisal, if it is to succeed,required listening, giving and receivingrequired listening, giving and receivingfeedback, and counseling and dealing withfeedback, and counseling and dealing withemotions. Ironically, although smoothemotions. Ironically, although smoothinterpersonal relations are emphasized ininterpersonal relations are emphasized inthe Chinese culture they tend to bethe Chinese culture they tend to be

reluctant to pursue tworeluctant to pursue two--waywaycommunications or provide counseling.communications or provide counseling.

(International Journal ofManpower)(International Journal ofManpower)

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Cultural IssuesCultural Issues

HofstedeHofstede Power DistancePower Distance

HarmonyHarmony

Saving FaceSaving Face

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ComparisonComparison

Reward systemReward system USA: A wide variety of rewards are used in theUSA: A wide variety of rewards are used in the

incentive system.incentive system.

PR

CR

ange of wage and salary is narrow; bonus isPR

CR

ange of wage and salary is narrow; bonus isnot based on individual performance; pay is morenot based on individual performance; pay is moremotivating than in the USA.motivating than in the USA.

Performance appraisalPerformance appraisal USA: TwoUSA: Two--way communication and counseling areway communication and counseling are

widely used in the performance appraisal process.widely used in the performance appraisal process. PRC: Superiors have absolute authority to evaluatePRC: Superiors have absolute authority to evaluate

subordinates; standards of performance are vaguesubordinates; standards of performance are vagueand generic.and generic.

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Participative managementParticipative management

USA: Participative management is welcome andUSA: Participative management is welcome andencouraged, even if it is not prevalent yet.encouraged, even if it is not prevalent yet.

PRC: Collective leadership is widely used but thePRC: Collective leadership is widely used but theparticipation of workers in major decisions isparticipation of workers in major decisions issuperficial and symbolic.superficial and symbolic.

(International Journal ofManpower)(International Journal ofManpower)

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Employee CharacteristicsEmployee Characteristics in Chinain China

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ChinaChina GeographicGeographic LocationLocation

Eastern Asia,Eastern Asia,

bordering the Eastbordering the East

China Sea, KoreaChina Sea, KoreaBay, Yellow Sea,Bay, Yellow Sea,

and South Chinaand South China

Sea, betweenSea, betweenNorth Korea andNorth Korea and

Vietnam.Vietnam.

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Overview of Chinese LaborOverview of Chinese Labor

About 800 million LaborAbout 800 million Labor

Force (2004)Force (2004)

Agriculture 50%Agriculture 50%

Industry 22%Industry 22%

Ser vices 28%Services 28%

Unemployment rate: 12%Unemployment rate: 12%

(2004)(2004)

Average working hoursAverage working hours 1010--12 hours/day12 hours/day

6 days/week6 days/week

50%

22%

28%

Agriculture Industry Services

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Chinese workers CharacteristicsChinese workers Characteristics

Focus on moralistic dutyFocus on moralistic duty

Maslows Hierarchy of Needs:Maslows Hierarchy of Needs:

External RewardsExternal RewardsPhysiological NeedsPhysiological Needs

Internalized MotivationInternalized Motivation

SelfSelf--actualization needsactualization needs

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Example of External RewardsExample of External Rewards

Material: incentives use to stimulate performanceMaterial: incentives use to stimulate performance

Money: a motivator for employeesMoney: a motivator for employees

Bonuses: exist in China since 1978Bonuses: exist in China since 1978

Pay system: indi

vidual performance

Pay system: indi

vidual performance

Culture: strongly collectivist cultureCulture: strongly collectivist culture

Pay differentials: based in length of servicePay differentials: based in length of service

Wage structures: subsidies, bonuses & allowancesWage structures: subsidies, bonuses & allowances

Performance: shortPerformance: short--term, loyaltyterm, loyalty

Belongingness: longBelongingness: long--termterm

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Example of Internalized motivationExample of Internalized motivation

Political CampaigningPolitical Campaigning

emulation campaignsemulation campaigns

in communist Chinain communist China

labor heroes: Tiananmen Squarelabor heroes: Tiananmen SquareJapanese Companies in ChinaJapanese Companies in China

Chinese employees: send to JapanChinese employees: send to Japan

learn and expose a foreign culture.learn and expose a foreign culture.

Build on a sense of belongingness & loyaltyBuild on a sense of belongingness & loyalty

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Practical Issues In IHRMPractical Issues In IHRM

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East Meets WestEast Meets West

Different does not equal wrongDifferent does not equal wrong

Must adapt to culture changeMust adapt to culture change

FlagFlag--planting does not always workplanting does not always work

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U.S. ManagementU.S. Management

IndividualismIndividualism

Low power distanceLow power distance

SelfSelf--actualization needsactualization needsShortShort--term viewterm view

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Chinese ManagementChinese Management

CollectivismCollectivism

Silent AchieversSilent Achievers

Need for AffiliationNeed for AffiliationNeed for StatusNeed for Status

High power distanceHigh power distance

LongLong--term viewterm view

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ExampleExample

Less motivated when IndividualLess motivated when Individualperformance and shortperformance and short--term goal isterm goal isemphasized.emphasized.

Would actually purposely slide back intoWould actually purposely slide back intothe group where he/she feels comfortablethe group where he/she feels comfortable

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Chinese Motivation HierarchyChinese Motivation Hierarchy

Social acceptanceSocial acceptance

Work ethics and life goal priorityWork ethics and life goal priority

Safety within group harmony and family supportSafety within group harmony and family support

Social awarenessSocial awarenessSelf actualization to the service of collectivitySelf actualization to the service of collectivity

Social altruismSocial altruism

Leader fitness for multiLeader fitness for multi--dimensional developmentdimensional development

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Future OutlookFuture Outlook

South China Morning Post (Hong Kong)South China Morning Post (Hong Kong)

And the survey says: The long term outlook for ChinasAnd the survey says: The long term outlook for ChinasHR problem is bright but the short term is pessimistic.HR problem is bright but the short term is pessimistic.

I have come the the conclusion that you can becomeI have come the the conclusion that you can becomerapidly obsolete as a China expert.rapidly obsolete as a China expert.

-- Rick A. SwaakRick A. Swaak

Senior ConsultantSenior ConsultantFrank E. Allen & AssociatesFrank E. Allen & Associates

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ProblemsProblems

State owned industries took in losses of 43.6%State owned industries took in losses of 43.6% USD$6.4 billionUSD$6.4 billion

Multinational unrestMultinational unrest

Intellectual property rights have been an ongoingIntellectual property rights have been an ongoingstruggle between China and U.S.struggle between China and U.S.

Chinese leadership is concentrated in the hands of a fewChinese leadership is concentrated in the hands of a fewaging Communist Party men.aging Communist Party men.

Corruption and bribery is on the riseCorruption and bribery is on the rise

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GuanxiGuanxi

RelationshipsRelationships Chinese practice of developing and nurturing intricateChinese practice of developing and nurturing intricate

networks of personal relationships, sometimes givingnetworks of personal relationships, sometimes givingthem priority over bottomthem priority over bottom--line performance.line performance.

M

akes hiring of Chinese nationals difficultM

akes hiring of Chinese nationals difficult

Struggle with Western PracticesStruggle with Western Practices Instead of an emphasis on process and integrationInstead of an emphasis on process and integration

across the business, for example, they are moreacross the business, for example, they are moreaccustomed to compartmentalization and diligentaccustomed to compartmentalization and diligentadherence to taking orders from aboveadherence to taking orders from above

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Steps Toward a SolutionSteps Toward a Solution

Whilst the local manager is more cost effective thanWhilst the local manager is more cost effective thanan expatriate, the western manager is perceived toan expatriate, the western manager is perceived tobe a more sophisticated and efficient businessmanbe a more sophisticated and efficient businessmanwith solid proven international business knowwith solid proven international business know--

howhow..Fiducia Management ConsultingFiducia Management Consulting

Beijing, Shanghai, Hong KongBeijing, Shanghai, Hong Kong

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Steps Toward a SolutionSteps Toward a Solution

China adopts IPMAChina adopts IPMA--HR certificationHR certificationprogramprogram IPMAIPMA--HR: International Public ManagersHR: International Public Managers

Association forHuman Recourses.Association forHuman Recourses.

Chinese Training CenterChinese Training CenterSAFEA: State Administration of Foreign ExpertSAFEA: State Administration of Foreign Expert

AffairsAffairs

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MotorolaMotorola

In the early 1980In the early 1980s Motorola was askeds Motorola was asked Will you provide us with a place to live?Will you provide us with a place to live?

Apartments were built and loans offeredApartments were built and loans offered Free multiFree multi--course lunchescourse lunches

Free transportation to workFree transportation to work

Special training for new hiresSpecial training for new hires

37% of Chinese students earn engineering37% of Chinese students earn engineeringdegrees compared to 6% in the U.S.degrees compared to 6% in the U.S. Lack of emphasis on ManagementLack of emphasis on Management

Motorola University in BeijingMotorola University in Beijing

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MotorolaMotorola

When I was there(in the late 1990When I was there(in the late 1990s) I hired a guys) I hired a guyfrom a Chinese university and I tripled the pay hefrom a Chinese university and I tripled the pay hewas gettingwas gettingnow that made him very happy.now that made him very happy.

Greg WangGreg Wang-- formerHuman RecoursesformerHuman RecoursesManager, Associate Director of the WorkforceManager, Associate Director of the WorkforceDevelopment Campus, James Madison UniversityDevelopment Campus, James Madison University