Understanding Western Human Resource Management Style

Multinational corporations that employ Western style of human resource management strategies are perceived by Chinese workers as a significantly more perspective path for carrier development. The top five methods that can be used successfully to attract and retain Chinese staff and in such way decrease labor turnover rates include: attractive salary and benefits packages, about 23 per cent, opportunities for future carrier development, about 19 per cent, creative work that creates meaning to workers, 7 percent, and company location, 3 per cent.

There are considerable differences between Western human resource management style and Chinese human resource strategies: while Chinese HR practices tend to be more autocratic as compared with similar strategies in the West. Despite the fact that multiple studies report high degree of effectiveness of human resource strategies used in Chinese companies, there is some controversy surrounding the issue fur to methodology employed. As such, there is a distinct need to take an insight into the management practices employed by Western companies and Chinese enterprises in order to estimate existence of the correlation between management strategies and labor turnover.

This paper analyses the relationship between human relation management incentives in Chinese companies and the level of turnover. We present a case study of Ping An Insurance (Group) Company, Ltd., the country’s first joint-stock insurance company that integrate securities, trusts, banking, asset management and annuity services. Analyzing human relations incentives and labor turnover from years 1999 to 2005, we estimate existence of correlation between job level and time employed in the company, and salary and time employed of company employees. We subdivide the sample period into five sub periods: from 1999 to 2001, 2000 to 2002, 2001 to 2003, 2002 to 2004, and 2003 to 2005 in order to analyze the influence of specific human relations incentives on the labor turnover rates. The paper is organized as follows. In the next section, we present a literature review of the recent studies on the differences between human resource management strategies in the Western countries and China; we also provide a theoretical background on the issue of labor turnover. Next, we discuss the method used for assessment of the risk of portfolios and present information about the source of data used, longevity of the period, and frequency of the data.