ORGANIZATIONAL EFFECTIVENESS

HR and Organizational Effectiveness in Chinese SMEs

HR and Organizational Effectiveness in Chinese SMEs

Introduction

This paper will present a discussion on the implementation of human resource management practices with regard to the application of HR practices in Small to Medium Manufacturing enterprises. This discussion will be followed by an elaboration on literature that pertains specifically to the link between HR and the development of modern day organizational strategies. In this regard, the paper will give special attention to the manner in which incentive pay is used in SMEs in China in an attempt to develop and implement effective organizational strategies.

Discussion

HR practices in China have developed significantly over the last few decades. As the Chinese economy has continued to develop at a steady pace, the need for effective HR practices has become all the more undeniable. According to Kotey & Sheridan (2004) SMEs in China have begun to adopt an approach in which HR practices are designed to address strategic goals (Rosner, Halcrow & Levins, 2001). In this regard, compensation systems have seen a trend in which they are being aligned with strategic objectives as well. As a result, organizations are beginning to address compensation management in a perspective that was previously relatively unpopular in SMEs in China. As results of this perspective, strategic decisions in SMEs are now being finalized on the basis of the degree to which the projects will have to remunerate the human capital used (Phillips & Stone, 2002). Furthermore, the approach demands that employees are encouraged to become a part of projects so that they can find the motivation that is needed to execute tasks effectively (Wilson, 2003). Incentive pay is one such instrument - used for the purpose of motivation development amongst employees - it invites managers to construct projects so that employees achieve personal fulfillment through the tasks that they accomplish.

From Western and other Asian countries' point of view, growing engagement of China establishes competition; competition for markets, competitions for resources and competition for military and political influence on the continent. Moreover, international aid organizations are suspicious about the promise of Chinese leaders for the provision of development aid “without strings attached” because of the fear that this weaken the efforts of international organizations to encourage sustainable development, accountability and environmentally sensible projects. Western governments suppose that by providing political, economic and military support, Beijing is supporting those governments who are known for their terrible ...