TM - August 2007 - (Page 34) recruitment & retention assessment & evaluation compensation & benefits performance management learning & development succession planning FOCUS ON CHINA Kellye Whitney Productivity, engagement and motivation are all key performance management considerations. But when performance management activities happen internationally, how do those considerations differ among countries? Jihong Sanderson, founder and executive director of the Center for Research on Chinese & American Strategic Cooperation at the University of California, Berkeley, said the definition of performance management can have different meanings in different countries. Performance management is well-received in the United States, but in China, performance management in particular (and human resources management in general) is not as well-developed because China has been an open market to the rest of the world for only the last 25 years or so. “In the United States, it’s more about processes, creating a work environment or seeing which people are able to perform to the best of their ability,” Sanderson said. “You would include lots of elements, like developing a clear job description, selecting the best people. But in China, it’s very dependent on the company.” For example, a small to midsized company might not fully understand the American definition of performance management, Sanderson said. Thus, a small company won’t provide effective employee orientation and training or design effective compensation systems. A large company, on the other hand, might have a more indepth understanding of performance management and have already brought in different events and management systems. Further, Sanderson said China is still a hierarchical and collective culture with a mindset based on long-term relationships, familiarity and trust — not necessarily rules or management procedures. Multinational companies looking to institute performance management practices in China often already have procedural and systemic ideas related to employee behavior because the talent management or HR management space at home is well-established. “It’s like an orderly trimmed garden, whereas in the China market, if you drop anything on the ground, it will grow into a tree. Grass is not allowed in the well-trimmed garden. What that means is, in the China market, things are quicker, shortterm and low-price,” Sanderson explained. “That means the employee mentality is very opportunistic. In the U.S., it’s more about long-term strategy and stable behavior. Because of those differences, people behave very differently. “If an American company wants to really develop in-depth performance management in China, they have to change the incentive system. You can’t just apply it directly. How are you going to capture people with that quick, short-term mentality and make sure you retain them?” In the course of her work, Sanderson said HR and talent management professionals often ask her how much should they pay. Her response: Don’t just think about competing companies’ compensation practices — focus on what Chinese employees really want. said. “As each of these countries industrialized, their birth rates dropped, their labor markets tightened up, labor became more expensive and firms had to look at either finding ways to make labor more productive or moving on to the next market. Many of them did move on to the next market.” In his presentation, Baxter also addressed what can be done as the labor market tightens up, as well as what strategies firms should adopt. “My answer, essentially, is talent management,” he said. “We call them the three R’s: recruitment, retention and retraining. Asia is transforming, and it’s transforming its opportunity to transform.” Some countries already have begun to use talent management, Baxter said, and those that do not must begin, lest they are left out of the global economy. In Europe, the shift from manufacturing to a service-based economy, as well as the tight labor market, have forced organizations to think critically about performance management and how it is connected to employee development, said Luk Vervenne, CEO and founder of Belgium-based HR research and solutions firm Synergetics. August 2007 one side of the equation,” he said. “The other side is personal development. I really think that it makes sense to tackle both sides if you want to promote competencies. It’s kind of like one plus one equals three.” The need for a European-wide system to manage worker development and performance stems from a combination of looming demographic challenges and shifting economic priorities, Vervenne said. “We have a structural reform in Europe, going from a ‘make’ industry to service- and knowledge-oriented economies. We have huge layoffs in traditional industry, so people need to be reassigned and retrained to do other jobs. “The constant hiring and firing has two effects. One is for companies that want to be able to hire and fire more freely but need to prepare their current workers for the fact that they might not need them in a few years. They should help them become employable so that finding a new job isn’t too hard for them.” Obviously, this upheaval has more than a few people feeling unsettled. “We’re coming out of a situation where jobs were for life,” Vervenne said. “Motivation is obviously a big issue. In Europe, government has a serious task to “Here in Europe, performance management is only 34 talent management magazine www.TalentMgt.com http://www.TalentMgt.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.