Paper Sample on Improving Human Resource Management in China's SMEs: A Market-Oriented Approach

Introduction

China has been shifting its economy to be a market-oriented one as it centralizes all operations. The market-oriented economy has led to a change in how small and medium-sized enterprise arranges their organization management (Zhai et al., 2018). It has led to a massive improvement in human resource management in small and medium-sized enterprises. The Chinese economy is unique, and it is essential to choose suitable methods of human resource management in small and medium-sized enterprises. More people in China are getting employment as a result of small and medium-sized enterprises and holds the most significant share in the economy in terms of growth (Psychogios & Prouska, 2019). The Chinese small and medium-sized enterprises have continued to adopt western approaches to manage the growing human resource more than ever before.

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Human resource management in China has led to improved performance of small and medium-sized enterprises as a result of various practices, including the following. The enterprises allow the staff to select their markets independently (Zhang et al., 2019). They offer rewards to workers to go with performance to improve the financial incentives that they get from their jobs. The enterprises strive to retain workers by providing them with welfare and social security schemes. They also aim to continually improve the skills of their workers to make them as competitive as possible. Enterprises use performance gauge to make promotions instead of opinions and views of supervisors and managers (Zhang, 2016). Workers are more involved in decision-making processes so that they can feel like part of the project and improving their performance. Workers are enrolled in unions that protect their interests. The Chinese small and medium-sized enterprises, therefore, use strategic human resource management.

Research Objectives

The study aims to show the outcome indicators and results of strategic human resource management in Chinese small and medium-sized enterprises.

The research aims to reveal the human resource management problems that the Chinese small and medium-sized enterprises face.

The study aims to give solutions to the problem of Chinese small and medium-sized enterprises using the same human resource management strategies.

Literature Review

Indicators of top human resource management include low staff turnover, staff commitment, staff congruence, and staff competitiveness, and the results of proper human resource management include an increase in production and sales and improvement in market position and competition. The lack of vocational training and overstaffing are some of the issues in Chinese small and medium-sized enterprises. The possible solutions include giving education and diversifying talent recruitment.

Indicators and Results

The Chinese small and medium-sized enterprises use the following indicators to predict the outcomes of the business operations. The first one is a low turnover of staff, which means that it becomes cost-effective for the organization if it remains at that level (Chen et al., 2016). Staff commitment is another indicator as the goals of the organization are only achieved if they are focused on the project. Staff congruence is an indicator showing that the purposes of the organization match with the goals of every worker (Chen et al., 2017). The competence of staff means that they possess the right skills to perform in the competitive market.

The results of proper human resource management in Chinese small and medium-sized enterprises are as follows. The production and sales increase and develop consistency over a couple of years. It improves an enterprise's position in the market and the percentage share making it more competitive than before (Chen, 2018). It enables an enterprise to expand its operations and plan for the future in terms of goals, production, and staffing.

Human Resource Management Problems

Despite the rapid rise of small and medium-sized enterprises in China, there are still problems limiting their potential. One is the lack of vocational training. It is a strategy that is necessary for the excellent performance of an enterprise (Li et al., 2019). The challenge runs deep, especially in small enterprises that have a reluctance to invest in human resource management (Hsiao et al., 2015). They mostly fear that they might lose their employees and lose out on many incentives in having a highly and diversely skilled human resource system.

As the small and medium-sized enterprises grow exponentially, overstaffing leads recruitment of lowly qualified workers. It creates a massive gap in the potential of the company against its strength in human resources. It puts an enterprise at risk of failing as the markets are highly competitive, and they can be exposed as there is also a considerable threat of new entrants (Hitka et al., 2018). Even as having a vast human resource in a company is advantageous, it is also a problem on its own. As the demand for human resources increases, it becomes difficult to retain talent in an enterprise (Li & Rees, 2020). It is because some enterprises are selective and offer better incentives for highly talented individuals. With more expertise in an enterprise, they can compete better in the market.

Solutions to Similar Human Resource Management Strategies

The majority of the small and medium-sized enterprises use the same old strategies of human resource management despite the growth they are experiencing. To solve this problem, they can reformulate their strategies by introducing vocational training to improve the skill set of their employees (Liu, 2019). The main issue in professional training is other enterprises easily poach the highly skilled employees. However, the benefits are enormous as it improves the enterprise's performance in the market, and they can provide more financial incentives to their employees (Lv et al., 2018).

Human resource management strategies in Chinese small and medium-sized enterprises suffer because of problems in talent recruitment. The enterprises can diversify the ways that they recruit their talents. After hiring, it does not end there as they have to manage these talents appropriately (Lorincová et al., 2018). They should maintain the careers of their skills by providing them with training and other forms of education. It involves making decisions with the right timing while involving each and everyone in the organization (Ouyang et al., 2019).

Significance of the Study

The study is essential to understand the strategies that Chinese small and medium-sized enterprises in their human resource management. The research is vital to understand the outcome indicators in human resource management that are crucial in determining the results of and enterprise's efforts. It is also essential in understanding the issues and finding solutions to problems in human resource management.

Research Methodology

The research methodology in the study is meta-analysis. It is a form of qualitative research, and it involves the collection and analysis of peer-reviewed articles to establish themes and patterns in information. It is a cost-effective method as it only requires one researcher, and journals are easily accessible in online libraries.

References

Chen, S., Chuang, C., & Chen, S. (2017). A conceptual review of human resource management research and practice in Taiwan with comparison to select economies in East Asia. Asia Pacific Journal of Management, 35(1), 213-239. https://doi.org/10.1007/s10490-017-9516-1

CHEN, X. (2018). Research on problems and solutions of human resource management in small and medium-sized enterprises—A case study of B company. DEStech Transactions on Economics, Business and Management, (eced). https://doi.org/10.12783/dtem/eced2018/24007

Chen, Y., Tang, G., Lee Cooke, F., & Jin, J. (2016). How does executive strategic human resource management link to organizational ambidexterity? An empirical examination of manufacturing firms in China. Human Resource Management, 55(5), 919-943. https://doi.org/10.1002/hrm.21797

Hitka, M., Lorincová, S., Pajtinková Bartáková, G., Lizbetinová, L., Štarchon, P., Li, C., Zaborova, E., Markova, T., Schmidtová, J., & Mura, L. (2018). Strategic tool of human resource management for operation of SMEs in the wood-processing industry. BioResources, 13(2). https://doi.org/10.15376/biores.13.2.2759-2774

Hsiao, C., Lee, Y., & Chen, H. (2015). The effects of internal locus of control on entrepreneurship: The mediating mechanisms of social capital and human capital. The International Journal of Human Resource Management, 27(11), 1158-1172. https://doi.org/10.1080/09585192.2015.1060511

Li, S., Rees, C. J., & Branine, M. (2019). Employees’ perceptions of human resource management practices and employee outcomes. Employee Relations: The International Journal, ahead-of-print(ahead-of-print). https://doi.org/10.1108/er-01-2019-0065

Li, S., & Rees, C. J. (2020). Determinants of the formalization of human resource management practices: An empirical study in SMEs in eastern and western China. Journal of Small Business Management, 1-21. https://doi.org/10.1080/00472778.2019.1705663

Liu, W. (2019). Difficulties and countermeasures of personnel selection in small and micro enterprises. Proceedings of the 2019 International Conference on Economic Management and Cultural Industry (ICEMCI 2019). https://doi.org/10.2991/aebmr.k.191217.123

Lorincová, S., Hitka, M., Štarchon, P., & Stachová, K. (2018). Strategic instrument for sustainability of human resource management in small and medium-sized enterprises using management data. Sustainability, 10(10), 3687. https://doi.org/10.3390/su10103687

Lv, Z., Tan, Z., Wang, Q., & Yang, Y. (2018). Cloud computing management platform of human resource based on mobile communication technology. Wireless Personal Communications, 102(2), 1293-1306. https://doi.org/10.1007/s11277-017-5195-y

Ouyang, C., Liu, M., Chen, Y., Li, J., & Qin, W. (2019). Overcoming liabilities of origin: Human resource management localization of Chinese multinational corporations in developed markets. Human Resource Management, 58(5), 543-561. https://doi.org/10.1002/hrm.21984

Psychogios, A., & Prouska, R. (2019). undefined. Managing People in Small and Medium Enterprises in Turbulent Contexts, 10-26. https://doi.org/10.4324/9781315102610-2

Zhai, M., Li, P., & Li, C. (2018). Status analysis and countermeasures of human resource panning in small and medium-sized enterprises. Proceedings of the 2018 4th International Conference on Education Technology, Management and Humanities Science (ETMHS 2018). https://doi.org/10.2991/etmhs-18.2018.93

Zhang, M. (2016). Research on human resource management of small and medium sized enterprises in the perspective of cross culture. Proceedings of 2016 5th International Conference on Social Science, Education and Humanities Research. https://doi.org/10.2991/ssehr-16.2016.99

Zhang, Y., Luo, Y., Zhang, X., & Zhao, J. (2019). How green human resource management can promote green employee behavior in China: A technology acceptance model perspective. Sustainability, 11(19), 5408. https://doi.org/10.3390/su11195408