The fact that Chinese SMEs, by and large, are facing increasing competition, have poor recording systems, inadequate data and inexperienced owner managers who work constantly on reducing production costs can also make the introduction of performance incentives a long drawn affair.
SMEs are responsible for creating most new urban jobs, and they are the main destination for workers laid-off from state-owned enterprises SOEs that re-enter the workforce. While economic reforms have aimed to change the rigid provision of social welfare system and to replace it with Human resource practices in sme sector incentive performance-driven pay system, staff and workers, particularly in the state-owned or affiliated state-owned enterprises, are still entitled to obtain social welfare benefits bestowed by the state.
Considering the transitionary stage and dynamic condition of the SME sector, as well as its largely state owned antecedents, the introduction of performance incentives will involve not just the agreement of factory owners, but also the need to overcome traditional mindsets, remuneration practices and working habits.
This flexibility might extend to work-from-home arrangements or the ability to work a slightly different schedule to accommodate childcare or medical appointments.
Spend the first week regularly checking in with both the employee and the manager to ensure that expectations are clearly set and everyone is on the same page. Owners need to realize that payments must be made on time and in public if enthusiasm is to be maintained and other workers are to be motivated.
Exclusions, exceptions, conditions and other tricky rules should be minimized. Many SMEs were previously state owned, where the concept of pay differentiation was virtually unthinkable. People have to trust that managements are not using variable compensation plans to cheat them. Even as ownership has changed, much of the old traditions still remain and SMEs think of low labor cost to be their chief competitive strength.
Following habits and policies that are considered in the industry to be best practices can ensure that the HR department is doing its part to create a successful organization. Smaller organizations, on the other hand, tend to be less bureaucratic, more profit oriented and faster in decision making.
Be Consistent Consistency is an HR best practice mainstay — and for good reason. Preparing incentivization programs for manufacturing SMEs in China will need to take account of a number of specific variables that include country culture, organizational culture, the size of organizations, the profitability and performance of individual firms, the nature of the industry, existing remuneration mechanisms and performance appraisal systems, and the likely effect of various levels of performance incentives.
Zheng, With studies conducted in Vietnam indicating the effectiveness of performance incentives in increasing production, King-Kuanei, Ngoc, and Ashley-Cotleur, 81 it would be logical to expect that they should, because of broadly similar cultural influences, also be applicable in China.
They save both time and money, and they make it less likely that someone will make a mistake, as they might when filing paperwork. Considering that the concept is still in its infancy HR consultants will need to convince Chinese SME managers of the effectiveness of performance incentives, using the results obtained in nearby countries, including Vietnam.
Small companies tend to be less hierarchical than larger organizations, with decision making being dependent upon the individual judgment of owner mangers. Ask managers to sit down with their employees at least once a quarter, if not once a month, to discuss performance.
A survey from the Society for Human Resource Management found that 89 percent of HR professionals who implemented flexible work arrangements reported an increase in employee retention.
The schemes will need to build credibility and need to be consistent and applied for a specific period. Staffing is influenced by individual likes rather than employee capability.
Conclusion The Chinese SME sector, while growing with enormous speed is beset with a host of problems, which hurt its efficiencies and retard the development of competitive advantage. It would also be advisable to pay attention to three tenets while preparing performance incentives in different organisations.
Flexible Work Arrangements Gone are the days where employees expect to sit at a desk in an office all day. This not only allows managers to be more connected to their employees, it also lets employees feel more engaged in their work.
Impact of Human Resource Management Impact of Human Resource Management While these significant cultural differences should prima facie require different approaches towards financial incentivization, independent research reveals that organizational competitiveness is also closely related to organizational type rather than cultural background and is evinced by private sector companies being far more competitive than their public sector counterparts across a broad spectrum of countries with different cultures.
A recent HR study on Chinese industry reveals the effectiveness of four HRM practices, namely performance-based pay, participatory decision-making, free market selection, and performance evaluation in performance.
These SMEs will gain enormously if they can imbibe and implement modern day management and HR practices, and the introduction of performance incentives would truly be a step in the right direction. Early Expectations A large part of working in human resources is getting new hires on board and ready to succeed.
It is essential that the assignment be approached with caution, patience and a deep understanding of the environment.HUMAN RESOURCE MANAGEMENT AND PRACTICES IN SMES IN DEVELOPING COUNTRIES: PRACTICES IN KOSOVO Faruk Ahmeti, PhD presenting the overview of the human resource practices in SMEs in general, an in specific description in Kosovo SME sector.
The economic and politic. Jun 29, · 1 Functions & Practices of Human Resource Management 2 What Is the Difference Between HR Activities vs. HR Practices? 3 Six Main Functions of a Human Resource Department. Conclusion The Chinese SME sector, while growing with enormous speed is beset with a host of problems, which hurt its efficiencies and retard the development of competitive advantage.
These SMEs will gain enormously if they can imbibe and implement modern day management and HR practices, and the introduction of performance incentives would.
HRM in Small and Medium-Sized Firms (SMEs) the indigenous SME sector. Do Human Resource Practices Enhance Organizational Commitment in SMEs with Low Employee Satisfaction?
Human Resource Practices in SME Sector: An Exploratory Case Study of Pakistan.
13 Pages. Human Resource Practices in SME Sector: An Exploratory Case Study of Pakistan Human resource working in SME sector plays a vital role in economic growth without any space for their personal growth. It is therefore observed that retention is one of.
The International Journal of Human Resource Management Volume 16, - Issue Submit an article Journal International Journal of Human Resource Management, while case study analysis has been successful in identifying potential influences on the adoption of.Download