China and the art of staff maintenance

The experience of many foreign companies in China shows how important an intercultural approach to the management of human resources is. Western firms that decide to invest in the country have to deal with people from a different cultural background (based above all on the values of Confucian philosophy), who have lived and worked in a centralized society.

They should know that while in Western society the individual precedes the group, in the Confucian tradition it is more important to promote the collective interest, and people have more responsibility toward the family and society.

This collectivist culture helps a managerial style that is based on teamwork. But it has also made some Chinese employees avoid taking individual initiative and personal responsibility.

Thus it is not advisable for foreign firms to reproduce in China the flat organization structure that is typical in the West. The reason for that is a reduction of middle management, and the consequent reduction of supervision at the bottom line, creates a less motivating environment for employees, who are used to getting constant directives and checks that do not give them a chance to manage their tasks autonomously.

In order to guarantee proper functioning of an organization, it is important that the management inform the employees about their different roles in the organization, giving clear messages of impartiality and discipline.

In fact, in a society where personal relations are more important than in the West, to assert impartial rules in a company management will help avoid Chinese colleagues from taking important decisions (like selection of employees or suppliers) on the basis of personal or family ties rather than on the criteria of efficiency and meritocracy.

Interpersonal relations

Chinese are used to building a personal network of relations (guanxi), which is strengthened by reciprocal exchange of favors.

Many Western people consider guanxi as "using" others that, according to Western morality, is unethical. But for Chinese people "using" a relationship creates an obligation to do something and, as long as you eventually fulfill that obligation, you are considered ethical.

A critical aspect of intercultural relation inside a company is communication. Instructions by Western managers must be as clear and complete as possible because cultural and linguistic differences can easily create misunderstandings that are difficult to overcome because of the low propensity of Chinese to ask for clarifications for fear of appearing ignorant or unskilled.

Effective communication is important for developing a stimulating workplace. For example, giving positive feedbacks for a job well done will improve the self-esteem of Chinese personnel (often limited by a hyper-corrective educational system) and will encourage the employees to freely express their opinions in front of the manager.

In case it becomes necessary to point out problems and deficiencies, it is important that the manager not only has an authoritative, but also constructive attitude. He or she should criticize an employee in a private context and show confidence in his or her capability to improve.

In fact, Chinese pay a lot of attention to improving their personal standing within group dynamics (mianzi, which means "face" in Chinese). Hence, it is important for a manager to avoid creating situations in which any of the staff could "lose face". It is also important that he tries to create suitable opportunities for them to be appreciated in public that can increase their mianzi.

Job-hopping problem

One of the main problems in the management of human resources in China is job-hopping. A research tracking 150 Chinese MBA graduates notes interestingly that 24 percent of them resigned their jobs within six years over cultural conflicts with their foreign managers (China Daily, 2004-09-23).

At present, foreign companies in China try to solve the job-hopping problem mainly by offering economic incentives, but they underestimate other benefits related to professional improvement and the quality of life.

It is true that economics has great relevance in China, partly because individual salary is not considered a private affair like in the West. It can easily become the subject of conversation between friends and colleagues with unavoidable comparisons and consequences on personal prestige. But using only economic incentives to retain employees can increase the amount paid as salaries. Besides, it can be a strategy with only short-term results because there will always be more attractive offers from other companies.

That's why it is important to rely on long-term incentive systems that invest in human capital, too. Companies seeking to maintain a high retention rate should clarify their training programs, and systematically award employees in order of seniority.

In China, knowledge is traditionally associated with power, and social mobility has always been linked to a person's level of education. For this reason, it could be a strong incentive for employees to have the opportunity to enroll in an MBA course or other study programs (especially abroad) that can benefit their careers.

In general, companies that have training programs are more attractive for candidates and report greater employee fidelity. In fact, vocational training can be useful not only for transference of skills, but also for the cultivation of corporate culture, and dissemination of a company's mission, objectives and strategies.

Another effective strategy against job-hopping would be to offer preferential career paths for employees with longer years of service in the company. For example, L'Oreal's top management in China comprises employees who have built their careers inside the company. This corporate policy has allowed the French company to reduce the turnover of employees in Shanghai and Suzhou to less than 5 percent.

The author is associated with Asia Business Group (Beijing) Consultancy Co.

(China Daily 05/27/2009 page9)