Hrm In Australia, India And China

HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 1 Curtin Business School School of Management

CONVENER : Dr. VO VAN HUY

STUDENT NAME : PHAN CAM TU

ID NUMBER : 13785882

UNIT TITLE : HUMAN RESOURCE MANAGEMENT

DUE DATE : 2 May 2007

NAME : HRM IN AUSTRALIA, INDIA, AND CHINA HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 2

The definitions, theories and models of Human Resource Management (HRM) are similar or the same in almost countries. However, their applications, implications and interpretations are slightly or even quite distinctive depending on the different context, history, politics, economy, socio-cultural regions, national and local legacies, human, bureaucracy and norms of each nation (Nankervis, Chatterjee & Coffey, 2006, p.2). In this assignment, we will examine and elaborate the HRM in Australia, India, and China, their practices and analyze the rise of knowledge work affecting HRM in these nations as well.

GENERAL VIEW OF HRM IN AUSTRALIA

Before penetrating into specific nations, we should pay attention to the notions and derivations of HRM to have the general views and acquire the concrete foundation to understand it deeply and thoroughly. At the beginning stage in the process of establishing the formal notion, it is simply called as the people management. It means the management or control a group of people that have common purposes and gather under one roof. Gradually the United Kingdom, the United States, and Australia develop and replace it by the name of personnel management, personnel administration, manpower management or industrial management (Nankervis, Compton & Baird, 2005, p.4). There are around six weak points of this description. Firstly, it just mentions the process of managing people in organization to satisfy the need of “mass production work process” only (Wikipedia, Human Resource Management). Secondly, it usually occurs in the short-term plans and is reactive actions. Thirdly, it requires the compliant psychology from the employees in the company. Fourthly, it exposes the untrustworthiness and unreliability of the management levels to their employees. Fifthly, it relies on the top-down management style with the focus on the power of the highest management ranks in the bureaucracy. Sixthly, it requests the employees with the specialized skills. Seventhly, its effectiveness evaluation criteria bases on the cost minimization (Nankervis, Compton & Baird, 2005, p.8). Due to these negative effects, nowadays, these expressions are rarely used. The term “Human Resource Management” (HRM) or “Human Resources” (HR) is implemented universally and commonly, instead. The fresh one not only can fix the weaknesses of the previous but also open a brand new style of management. For example, it is used in long-term plans, is proactive actions, is the commitments of making HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 3 decisions to the employees, expresses the high trust of managers to employees, is flexible roles, and pays more attention to maximum utilization. The HRM is involved in “the activities undertaken by an organization to utilize its human resources effectively” (Dowling, & Welch, 2005, p.4) is the strategic approach to make use of the company’s assets and is the direction, orientation and promotion of its employees to achieve the objectives that the company set up. It is including such the following activities: human resource planning, staffing, performance management, training and development, compensation and benefits, and industrial relations. When these things surpass the borders of the nations and the companies have to deal with the multinational workforce, we will call it is the International Human Resource Management (IHRM). Morgan suggested the typical model through three important dimensions. Firstly, “the broad human resource activities” are consisting of procurement, allocation and utilization. Secondly, the national categories refer to the host country, the home country and other countries. Thirdly, the categories of the employees include the host-country nationals (HCNs), the parent- country nationals (PCNs) and the third-country nationals (TCNs).

The development of Personnel management in Australia is later than in United Kingdom and United States, it whereby inherits the progress and advances from the pioneers and has some similarities. It also contains two features of US model such as the senior management totally directs administrative activities in advance and then step-by-step emphasizes on the confident, business-oriented and professional approach (Nankervis, Compton & Baird, 2005, p.5). It also acquires the elements of the United Kingdom pattern embodying the centering on “welfare role of the personnel practitioners because of the excesses of early capitalist industry”, the humanitarian tendency and the trade union growth. Nevertheless, because of the “influences of social, economic, political and industrial relations factors”, it discloses or reveals some differences. The evolution of HRM in Australia happens through four stages. Stage one from 1900 to 1940s is the period of the welfare and administration. During this first period, the untrained personnel management officers such as supervisors, line managers and early specialists have responsibility to control personnel functions; instead, these jobs must be done by the professional associations. The scientific management affects the manners that they recruit, administrate and place the employees, the Fordist theory influences the way of designing jobs to satisfy the requirement of mass production and the behavioral science impacts on the employee HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 4 motivation. Stage two from 1940s to in the middle of 1970s is the time of welfare, administration, staffing and training personnel management and industrial relations (IR). Due to the need of mass recruitment to fill up the gap positions in manufacturing and public sector organization and reconstruct the country after war, it leads to the more emphasis on the attraction of scarce labor, especially female workers; and the techniques of selection and recruitment, the skill training activities and the welfare are also paid attention carefully. Stage three from in the middle of 1970s to in late 1990s is the duration of human resource management and strategic human resource management (SHRM). Australia found that it is standing in the difficult position because it must endure the pressure from many competitive forces consisting of the forces coming from USA, Euro and the emerging Asia. It is a right time to modify and adjust the way of its employee management. Australia nowadays has to combine both the micro approach of the personnel activities, functions and processes and the macro perspective including human resource strategies and policies. Stage four from 2000 to onwards is called as the new millennium (Nankervis, Compton & Baird, 2005, p.93:95). No one can predict the development of the nature of HRM; however, we are aware that the progress and advance of communication and information technology will increase the demands of international HRM (IHRM) models. We realize that the traditional HRM functions, for example the “recruitment and selection, the training and performance appraisal”, will be transferred to the line managers and other ones such as the “payroll administration, HR information systems, human resource development, employee assistance programs, occupational health and safety” will be devolved to “external service providers” or outsourcing. During a last century, Australia followed the centralized system in which the federal as well as the state levels directly intervene in IR embodying “the employers and management, employees and their trade union, and government including government department and agencies” (Nankervis, Compton & Baird, 2005, p.98). In order to alleviate, reduce and relieve the debates and conflicts between the employers and employees, the Australian Industrial Relations Commission (AIRC) became an “interventionist” or a mediator by “setting the minimum wages, establishing the pay and conditions of employment”, and holding the negotiation role. Nevertheless, whilst the world has changed and the competitiveness and productivity have a tendency towards decline, the amendment of the obsolete system is unavoidable and necessary. The appearance of the formal concept of “enterprise bargaining” in 1991 opens the surpassing and absconding of previous severe and rigid restriction. It HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 5 decentralizes the right of deciding to the relevant parties in the company. In order to provide a clear and precise “framework for cooperative workplace relations” and “promotes the economic prosperity and welfare of the people of Australia” (Baird, Ellem, & Page, 2006, p.29), the Workplace Relations Amendment (WorkChoices) Act 2005 was given birth to replace the previous Workplace Relations Act 1996.

“ In the past, Australia’s agricultural sector was the most dominant sector of the economy” (Nankervis, Chatterjee & Coffey, 2006, p.48:50); however, in the middle of twentieth century Australian economic system has changed. It focuses more on the technology, “retail, trade, property and business services, health and community services and education” sectors. The economy of Australia nowadays centers on the “knowledge and information”. The demands of occupations involved in innovation, technique, flexibility and mobility increase sharply. We can realize this tendency via the pie chart below.

Source: National Institute of Labor Studies data published in WA Business News, 30 January 2003, p.12 HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 6 The changes of the kinds of jobs also lead to the adjustment of the human resource planners and managers. They need to modify the obsolete previous management system in accordance with the new situation.

Knowledge based economy, according to the speech of Mark Vaile-the Economist Intelligence Unit, depends on “the production, distribution and use of knowledge and information. It encompasses the exploitation and use of knowledge in all production and service activities; not just those sometimes classified as high-tech or knowledge-intensive” (Speech of Australian Minister for Trade, Mark Vaile). “The Organization for Economic Cooperation and Development (OECD) has developed a set of indicators of a country’s readiness to move towards a knowledge-based economy. There are business environment, information and communication technology, innovation system and human resource development”. “Knowledge-based industries include a range of services such as education, financial and other business services and communications. They also include high-tech manufacturing and emerging industries such as biotechnology”. In fact, Australia “is already doing well” all of them. The innovation and new technology make the impact on the marketing, market and even HRM. HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 7

Australian economy agriculture, 3.4 mining, 4.6 manufacturing, 13.3

services, 70

THE SIMILARITIES OF INDIA AND CHINA

The developing countries-the ones with “high or low per capita national incomes”-rely almost on the “primary production” and usually are through lack of “advanced industrialized infrastructure embracing “education, health, communications and transport facilities”-cover eighty percent of HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 8 the globe, hence its contribution to the advance in worldwide HRM is remarkable and significant. These nations are comprised of “the continent of Africa, Latin America, South Asia, South East Asia and Polynesia, and Central Asia. The most similar points of them are the transformation from “the economies of the former Soviet bloc” or the planned economic model to “the market-oriented economy” and the “post colonial’ reformation. (Harzing & Ruysseveldt, 2003, p.221:238)

Whilst we mention the Asian region, we ought to refer to two “emerging” economies-China and India. Many interesting features can be figured out when we analyze these countries. Both are neighbors, have impressing broad area-India with 3.28 million square kilometers (India Area and Population) and China with 9.6 million square kilometers (EducationSeries: About China), have dense and crowed population-India with nearly one billion citizens (India, 1997-2005) and China with 400 million people (Xinhuanet, China to Keep Population Below 1.37b). Although these nations used to endure the invasion, control, exploitation and domination of Western powerful hands at one time; nevertheless, they presently open harbors to welcome and cooperate with the investors in over the world, especially the Western ones. They try to become members of financial associations and organizations such as World Bank (WB), World Trade Organization (WTO) and International Monetary Fund (IMF).

Although India’s economy suffered from the big loss of talent and well-qualified citizens because of the “brain-drain” leakage over the 1960s and 1980s, it nowadays has recovered. From the 1990s, the flow of capital and returning home has begun and continuously poured into India. They come back home and enrich India with abundant global knowledge and experience accumulated from the most developed nations in the world (Nankervis, Chatterjee & Coffey, 2006, p.53). Moreover, the Lady Luck smiles on India when it can purchase the fiber-optic with the lowest price and be recognized and remembered by the world after “remediating” successfully the Y2K computer crisis (Friedman, The World is Flat, p.108). India today is not only the place that attracts the outsourced jobs-“help-desk”, “providing the basic software services”, “handling customers’ tax returns and any other accounting needs” and so on, but also the hot spot that seduces the skilled and intelligent “job seekers” around the world, especially HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 9 from “United States, United Kingdom, France and Russia”. We will surprise when knowing that there is a Bangalore-the India’s Silicon Valley-where was equipped by the most modern facilities and designed and created the latest technology for the world. The patents that Bangalore possesses mounting to 1,000, the Intel team in Bangalore also promises to launch “microprocessor chips for high-speed broadband wireless technology”, and the new ideas of developing the “aircraft engines, transport systems and plastics” are embryonated (Friedman, The World is Flat, p.30). The Human Resource Development (HRM) in India follows the template of hybrid system. It is the combination between the Western management style with the “indigenous thought systems and practices” (Harzing & Ruysseveldt, 2003, p.223).

China is a nation located in East Asia. Despite the fact that it inherits the “similar traditional philosophical roots” like Japan, Taiwan and Vietnam; nevertheless, due to the differences in “political, economic and historical factors” it contains many unique features. Like Vietnam, it follows the “socialist market economy” (Harzing & Ruysseveldt, 2003, p.196). China is the cradle and the origin of “traditional thinking in East Asia”. Reopening the thick historical book of China, we can find out “the period of Spring Autumn Warring States (770-221 BC)” when the blossom of six main philosophical schools are derived consisting of the Naturalists, the Confucianists, the Moists, the Logicians, the Legalists, and the Taoists. It is the era of constant chaos, wars and the scramble for power and land of the stronger influences and kingdoms including the Chu, Qi, Han, Yan, Wei, Zhao and Qin (Asian Studies presents Windows on Asia, Chinese History). Its residents at that time lived with the scare, anxiety, and poverty. These schools emerged because of the desire of the contemporary philosophers wanting to reestablish the order in that society.

“Confucius believed that Ren, heartedness or benevolence is the highest virtue, is the most required morality of a king and can be accumulated and shaped by education process” (Harzing & Ruysseveldt, 2003, p.197). Li is the practice or performance of Ren. It is symbolized by the “rituals, rites and proprieties” and the HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 10 accepted behaviors of society. Li is the chain to force the educated people into the social order and hierarchy. Li compels human into the mould and designs them as the models that society expects. In order to expose Li on the surface, the Jun zi, “superior or perfect” men are coerced to comprehend righteousness. It is “the regulation of the heart and the appropriateness of activities” (Analects of Kongzi with Zhu Xi’s Commentary). Yi is the devotion to someone else and ignorance of profit, status and fame. Unless man has these characteristics, he is a “Xiaoren, or a petty man” indeed. Confucius did not attach special importance to the “legislation and law enforcement”, he highly appreciated the moral education of each man especially the leaders, instead. He announced that just only the implementation of morality will make all men follow faithfully and voluntarily. The attraction of talent and intelligent people must derive from the winning of their heart in advance. Until now the HRM in Chinese company still is affected by the thoughts of Laozi. The Chinese managers always have the appropriate behaviors to their employees and the employees also are required to respect their managers. The salutation in Chinese companies is very important and highly conscious. The hierarchy is venerated and honored. In the selection candidates for vacancies process, the authorized recruitment managers usually base on the morality, education background and family relations are the standards to choose the suitable ones. The Chinese people usually regard their company as their home and their bosses and fellows as their family members. The success is the outcome of the team-work and the talent leaders. The managers in the companies also pay more attention to the family of the employees such as the job of the spouse and the health and education of their children. The visits to the house and family of the employees from the managers are so popular in China. The bosses and his employees can go out for drink. The companies can pay for the expense of the informal appointments and their employees’ entertainment. In the special events such as Lunar New Year, the offering and receiving presents are unavoidable. They all become the culture of Chinese for more than 2,000 years. Although the foreign investment inflow has poured into China drastically, Chinese people work in the Joint Stock Companies or totally invested by foreigners firms, they always still remain these traditional characters. HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 11 So far there is no reliable proof of the origin and biography of Lao zi-the founder of Daoism. However, its influence to human life and HRM is incontrovertible. According to the conception of Laozi, every tangible or intangible material in the world has its own rule and law of rotation. It does not need the hand and manipulation of human beings and man also should obey and follow that flow. It is called Dao or “the Way” and this significant word runs throughout his dogmas. So as to reach to the threshold of Dao, man should “act and think” as WuWei-“effortless activity”. It means people should do nothing or do not need to compete, fight or pillage with others. What belongs to us will finally return beside us and what does not if we try to spoliate, it will leave us at last. Life, property, fame and status are nothing because what we can bring with us to the life beyond the grave? Human are born with nothing and will pass away with nothing. Besides, De or “virtue” is also the pivotal and decisive word. According to Laozi, De will “emerge naturally” in every human. Dao and De are combined and analyzed carefully in his work Dao De Jing-“the classic of the Way and Its Power”. The remarkable element of Daoism is the “Oneness and YinYang”. It means the balance, harmony and concord between Yin and Yang, male and female, tian and di, dark and light, recession and dominant, soft and hard, feminine and masculine, low and high, contractive and expansive, short and long, hollow and full, empty and full, and so on (Harzing & Ruysseveldt, 2003, p.198). One embodies and contains the other one. In male’s body also has feminine characters and vice versa. If one side is so dominant, it will break the balance and so cause the chaos. It is easy to be recognized in Chinese companies, the industrial relations among the triangle sides such as bosses, employees and union, and government always are kept in equilibrium. If one party is so strain, the others will concede. The win or lose is not so treasured because the win can lead to lose and risk and vice versa. It helps the companies and the staff in these ones have capability to cope with the instability of environment (Harzing & Ruysseveldt, 2003, p.200).

So far the War Strategy or Bing Fa that is compiled by Sun Zi the fourth century B.C. still has its own value. At that time, it is considered as the book for military purpose only, nevertheless HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 12 nowadays it is used in common such as for daily life and HRM as well. In his book Sun zi Bing Fa, he discussed five elements that frames a strategy including the moral cause, the temporal conditions, the geographical conditions, the leadership and the organization and disciplines (Harzing & Ruysseveldt, 2003, p.199). If we can assemble or gather them at the same, the successfulness is close at hand. The internal and external factors are flexible and instable, hence the adaptation to the new and changes of the companies, managers and employees is unavoidable (Harzing & Ruysseveldt, 2003, p.200).

China today is the combination between the old and the new. It is still affected by the traditional philosophies but it also learns from the western templates. After the Liberation in 1949, the People’s Republic of China (PRC) was established with the leader party is the Chinese Communist Party (CCP). 1976 is the golden age of China. Under the leadership of Deng Xiao Ping, China opens its economy to welcome the foreign investment. China gradually overcomes the disadvantages of the previous “socialist superiority” system such as the central control from the unique party, the “window-dressing” role of the trade unions, the egalitarianism because of the narrow wage differentials, the “life-time employment with a seniority-based wage system, the traditional kinship”, the requirement of devotion to the unit and nation, the dominance of political interests and the lost of the workers’ motivation. After the reform period from 1979 until now, China changes its “wage, employment, welfare and management”. This reformation breaks its “three irons” including “iron rice-bowl, iron wage and iron chair” (Harzing & Ruysseveldt, 2003, p.209:210). The new wage systems such as the “piece wage system, bonus system, structural wage system, floating wage system and post plus skills wage system” create the motivation for the employees and boost the higher production. China nowadays transfers from the foci on the cheap labor and outsourcing contracts to the high technology, quality and hyper efficient economy (Friedman, The World is Flat, p.119). The leaders of China confirm that in the near future China will have a Banglore like India.

In order to “seize the 21st century” and aim to the knowledge economy, World Banks Institute has some advices to China. China should “improve its productivity, must shift away from resource-intensive development and more efficiently into service and knowledge-base development, has to open more and harness the forces shaping the global economy, leapfrogging to take advantage of rapidly evolving technologies, improve education is perhaps the most HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 13 critical reform for the medium and long runs, promote greater use of information and communication technologies throughout the economy, need to dramatically improve dissemination and use of technology and related knowledge, and the government must move farther from controller and producer to becoming the architect of a new socialist market and knowledge-base economy” (China and the Knowledge Economy, Seizing the 21st Century)

In conclusion, due to the differences in geography, culture, politic and history, each nation has its own unique features. Nonetheless, according to the trend of globalization, all of countries try their best to raise its employees’ knowledge base and modify its management of human resource. All gained good outcomes but the difficulties and challenges still are waiting for them. HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 14

Analects of Kongzi with Zhu Xi’s Commentary. Retrieved 28 March 2007 from

http://faculty.vassar.edu/brvannor/Phil210/Translations/ZhuXiCommentary.pdf

Asian Studies presents Windows on Asia, Chinese History. Retrieved 28 March 2007 from

http://asia.msu.edu/eastasia/China/History/Zhou%20Dynasty.html

Baird, M. , Ellem, B. , & Page, A. ,(2006). Human Resource Management, Strategies and Processes, Workchoices Update. Nelson Australia Pty Limited

China and the Knowledge Economy, Seizing the 21st Century. Retrieved 28 March 2007 from

http://info.worldbank.org/etools/docs/library/137742/ChinaKE.pdf

Dowling, P. J., & Welch, D. E., (2005). International Human Resource Management, Thomson Learning

EducationSeries: About China. Retrieved 28 March 2007 from

http://www.china-inc.com/education/geography/

Friedman, L.Thomas, (2001). The World is Flat. Farrar, Straus and Giroux

Harzing, Anne-wil & Ruysseveldt, J. V., (2003). International Human Resource Management, Sage Publications Ltd.

India Area and Population. Retrieved 28 March 2007 from

http://www.worldwide-tax.com/india/indpopulation.asp

India, 1997-2005. Retrieved 28 March 2007 from

http://www.geographia.com/india/ HRM IN AUSTRALIA, INDIA AND CHINA

P a g e | 15 Nankervis, A., Compton, R., & Baird, M., (2005). Human Resource Management, Nelson Australia Pty Limited

Nankervis, R. A., Chatterjee, S.R & Coffey, J., (2006). Perspectives Of Human Resource Management In The Asia Pacific, Pearson Education Australia

Speech of Australian Minister for Trade, Mark Vaile. Retrieved 28 March 2007 from

http://www.dfat.gov.au/media/speeches/trade/2000/001031_eiu.html

Wikipedia, Human Resource Management. Retrieved 28 March 2007 from

http://en.wikipedia.org/wiki/Human_resource_management

Xinhuanet, China to Keep Population Below 1.37b. Retrieved 28 March 2007 from

http://www.cpirc.org.cn/en/enews20060107.htm