HRM dilemmas in China: the case of foreign-invested enterprises in Shanghai

Abstract

How can we best understand how people are managed in the new kinds of Western-influenced enterprises currently emerging in the People's Republic of China? In this article, we look in depth at 20 Shanghai-based, foreign-invested enterprises (FIEs) in order to analyse their human resource dilemmas as well as related issues facing them in the Chinese market. We have, in this context, examined key HRM (human resource management) problem areas, such as recruitment and compensation, using semi-structured interviews and questionnaires and have used this data to begin to build conceptual models which can be further tested in future investigations. The main conclusions we present are that current discussions around the ‘localization’ of HRM practices often fail to deal adequately with the complexities of the Chinese environment, and that FIE responses to these environmental complexities appear to have been characterized in the literature as far more planned and rational than appears to be the case from our fieldwork. The current investigation also reinforces our previous view that overly neat generalisations about HRM practices in this context are unsustainable. The debate should rather be re-framed to take into account critical differences between individual strands of HR policy and practice.

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