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Foreign companies and Chinese workers: employee motivation in the People’s Republic of China
Terence Jackson
Centre for Cross Cultural Management Research, EAP European School of Management, Oxford, UK and

Mette Bak
BASF, Shanghai, China
Introduction: the challenge of motivating Chinese employees At the end of 1978, during its “third plenum”, the Chinese Communist Part Central Committee gave economic reform top-level priority. Following the Second Session of the Fifth National People’s Congress on 1 July 1979, foreigners were permitted by law “to establish equity joint ventures together with Chinese companies, enterprises or other economic organizations … within the territory of the People’s Republic of China, on the principle of equity and mutual benefit” (PRC, 1987). Since the beginning of these economic reforms in 1979 the Chinese economy has exploded, with an average annual growth rate in GNP of 10 per cent over the last decade, with the attainment of 20 per cent in the coastal areas designated “special economic zones” (EIU, 1994). Foreign direct investment more than doubled between 1987 and 1990 (Kelley and Shenkar, 1993), despite a slow-down after the Tiananmen Square incident, with an estimate of more than 150,000 joint ventures in China. Much of this investment comes from Hong Kong (68.2 per cent in 1992) and other countries of Eastern Asia, with European countries, and even the USA (with 4.6 per cent in 1992) badly represented. Despite this economic growth, there are indications that productivity has been a problem. This may have implications for the attractiveness of China to foreign investors, despite low labour costs. A study undertaken in the mid1980s indicated that productivity levels were 60-70 per cent of those in Hong Kong (Locket, 1987). A recent study (Turcq, 1995) indicates a steady rise in productivity relative to wage increases over the ten years from 1980 to 1990. But many of the problems and failures of international joint ventures in China have been associated with problems in the area of human resources management, and particularly in performance motivation and staff retention (Child, 1994; Child et al., 1990; Henley and Nyaw, 1990; Kelley and Shenkar, 1993; Wang, 1992; Wang and Satow, 1994).

Journal of Organizational Change Management, Vol. 11 No. 4, 1998, pp. 282-300, © MCB University Press, 0953-4814

Bjoerkman and Lu (1997) report that at a recent round table discussion with Foreign the government of the PRC, 59 per cent of participants from foreign invested companies and enterprises (FIE) concluded that recruiting and retaining managers (a Chinese workers significant input into human resource management) was the most significant problem facing FIEs in China. This represented twice the number who considered Chinese bureaucracy to be the major issue. Findings drawn from a 283 study of 67 Sino-foreign international joint ventures by Lu et al. (1997) show the highest cause of perceived difficulties occurring because of differences in management styles (according to 26 of the 51 foreign managers surveyed), and the second highest perceived cause of difficulties being human resource management in areas such as pay, welfare and arrangements of accommodation (18 out of 51 foreign managers). In this study, Chinese managers saw the highest cause of difficulties being expatriate managers without knowledge of the Chinese environment (29 out of the 56 Chinese managers surveyed), and the second highest cause being different management styles (18 out of 56 Chinese managers). In both sets of accounts within the 67 international joint ventures, human resource management and related issues such as management styles were seen as the main causes of difficulties within the general management of such enterprises. These issues have major implications for the way Chinese workers are motivated within the enterprise, and the motivation of workers has an important impact on the success of the enterprise within China. It may be that Western concepts of motivation are not relevant in a socialist China where people have been motivated perhaps only to do what was best for the country, with little overlap in practice to industrial productivity. Over the last two decades Chinese state enterprises have gone through a number of market related reforms, in order to develop institutions pursuing profit and productivity rather than ideological, political or specifically social goals (Boisot and Child, 1988; Chen, 1995a; Jackson, 1992; Walder, 1986). With the changing face of China’s social and economic infrastructure, motivational patterns may be changing. Perhaps they must change in order to facilitate additional increases in productivity, which will encourage further investment from the West. But it may be naïve nonetheless to think that Western managers can enter China with an armoury of motivational techniques which have proved useful back home. This article sets out to look at Western approaches to motivating employees and to show why these approaches may not work in a Chinese context. Chinese work values and motivation are compared to these approaches and propositions advanced to indicate how Chinese employees may be motivated by Western MNCs, and then to compare these with current practices and attitudes within foreign firms and joint ventures in China. For the latter, a study carried out in Beijing by one of the authors (Bak, 1995) among 13 foreign enterprises is drawn on. Evidence seems to indicate, from these results, that some Western practices may be inadequate. We then offer some practical suggestions for structural changes which may help in addressing these issues on motivating Chinese employees with the hope that this will provide useful input into foreign managers’ conceptual and strategic resources.

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Western motivational theories: are they applicable to Chinese employees? The static-content theories of motivation are standard reading in Western textbooks, and form the basis of management training programmes. They underline our assumptions about motivating employees in the Western hemisphere. The best known theories are those of Maslow (1958), Herzberg (1968), McClelland (1987) and McGregor (1960), and largely address the question “What outcomes are attractive to an individual and why?”. The development of incentive schemes within Western companies tends to focus on the satisfaction of such needs identified by Maslow and Herzberg through job design, participation in decision making, promotion opportunities, working conditions and pay. Yet Maslow’s (1958) hierarchy of needs has been criticised as reflecting a particular individualist view of the world (Hofstede, 1980b) with “selfactualisation” being at the top of the pyramid. Nevis (1983) suggests a revision of the hierarchy in the Chinese situation to reflect group loyalty and national unity which may need to be addressed even before physiological needs – where self actualisation is in the service of the community; where individual esteem (achievement, independence, reputation and prestige) may not be a relevant concept in a highly collectivist society; and, where “face” is more related to belongingness rather than to individual esteem. These comments must also have implications for Herzberg’s (1968) theory of hygiene factors where extrinsic factors, such as working conditions and money, when absent may cause demotivation. Motivators or intrinsic factors include content of the task, achievement, responsibility and growth. Belongingness may well be a “hygiene” factor in this sense, where if this is absent little else is particularly meaningful. McClelland’s (1987) motivation theory suggests that people are differently motivated towards achievement, power, affiliation and avoidance, where the achievement motive is key to McClelland’s view of economic development. Such achievement involves the creation of more efficient ways of doing things and solving problems, the preference for tasks which reveal successful performance, and the taking of personal responsibility for performance. These are concepts which may not apply to Chinese achievers. While there is some evidence to suggest that achievement is relatively important in China (Specter and Solomon, 1990; Stewart and Chong, 1990) this could be related, for example, to the need to achieve output quotas rather than reflecting any intrinsic satisfaction. When we consider, however, that in other Chinese societies outside the People’s Republic, the proportion of entrepreneurs is high, and is an explanation of their economic success, we could conclude that Chinese culture does have a tradition which allows the development of high achievers (the overseas Chinese are well documented in Chen (1995b)). Alternatively, it could be argued that those who left China, where traders were traditionally seen as being of low status, could only be successful outside of mainland China.

The power motive (McClelland, 1987) may also not be very strong in Foreign mainland China. The distance between the middle ranks and the high ranks is companies and huge, with the latter being mainly unattainable, whereas advancing to the Chinese workers middle levels does not bring increased power of any significance. There are, however, little or no specific research findings in this area. Affiliation, on the other hand, has played a key role in China through work units (in urban areas) 285 and production brigades (in rural areas). These took care of housing, children’s education, marriages and often the timing of employees’ child bearing. The social aspects of motivation within the job situation in China may therefore be significant. The avoidance motive (McClelland, 1987) may be high in China, and may be a real problem for productivity: the fear of being punished for mistakes seems to be deep rooted in the mainland Chinese. Schermerhorn and Nyaw (1990) call this “learned helplessness”. A person learns from an experience of past inadequacies to feel incapable of future success. A senior manager who is already a victim of learned helplessness does not expect initiative from middle managers. This may lead to passivity in the workplace and even a need for a high level of supervision. This is connected to a lack of achievement where taking risks is avoided, a high level of uncertainty avoidance, and in McGregor’s (1960) terms, a preponderance of management styles and techniques which favour Theory X, rather than Theory Y. The former assumes that most workers dislike work and therefore try to avoid it. They must be controlled and coerced into achieving organizational goals. The latter assumes that employees seek responsibility, can make decisions and will exercise self-control when properly motivated. Evans et al. (1989) suggest that Theory X is more applicable in this context, whereas Theory Y may be more applicable in the West. To understand more fully why Western assumptions of employee motivation may not work in China, it is important to first understand Chinese work values within the context of broader theories of cultural differences. We can then move on to propose approaches to the ways in which companies may formulate motivational policies and practices by reviewing motivational processes in the Chinese context. Chinese work values The normally cited “classic” work on cultural values (Hofstede, 1980) is silent when it comes to the People’s Republic of China. The more recent Chinese Cultural Connection (1987) brings Hofstede’s work up to date, but only by adding a fifth dimension (Hofstede, 1991), which provides limited additional information to our current knowledge of China’s work-related values. Even the more modern work of Trompenaars (1993) is surprisingly silent on such key areas as collectivism-individualism when it comes to China. Of course Hofstede (1980) draws on data from Hong Kong and Taiwan to describe Chinese characteristics. But we should be wary of generalising from these societies which have been exposed to Western ideas and practices for some time. However, it is likely that such value dimensions as collectivism-individualism,

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power distance, uncertainty avoidance, masculinity-femininity, as well long term-short term (“Confucian dynamism”), have some relevance in the mainland China context and can help us to understand those aspects of motivation which are related to work values. Power distance, for example, is high in China, with the unapproachability of the top stratum, but with distances between middle management, supervisors and workers being somewhat smaller (Locket, 1987; Warner, 1993). A person who advances through the system beginning as a worker, then up to foreman and finally middle management will gain comparatively little power influence, and this may therefore not be a motivator. Also power structures are not well installed because of a lack of managers, and may take shape as a result of necessity. The respect for hierarchy and authority may well be rooted in Confucianism, together with a regard for age as a source of authority which is largely unknown in business in the West. A view of uncertainty avoidance in China is not so clear cut. Hofstede’s (1980) work indicates a lack of need to avoid ambiguity in Chinese cultures, and this may reflect the fact that China itself (as could be argued of Hong Kong) is relatively free of a highly regulated legal code, and has traditionally been ruled by men (power distance) rather than by laws (uncertainty avoidance), but more recent work (Chimezie et al., 1993) indicates a strong avoidance of uncertainty among Chinese, with a strong desire to maintain social order with a degree of predictability. But Hofstede (1991) in his later work argues that uncertainty avoidance may be an irrelevant concept which is linked to the question of “truth”. Truth is not a relevant issue in Eastern thinking. The Chinese manager may well be motivated to save “face” and to tell the other person what they want to hear, rather than what may be regarded as the absolute truth in Western eyes. Masculinity-femininity is also a value dimension for which there is little direct information on China. Chinese cultures in Hofstede’s IBM studies had medium scores for this dimension. The concept of masculinity represents an emphasis on competition and the centrality of work in one’s life. Japanese managers, for example, score high on masculinity (Hofstede, 1991). The meaning of work study (MOW International Research Team, 1986) also indicates a high centrality of work for Japanese individuals. It is the degree of importance of working which influences employee motivation, and this is an area of information which is lacking in the context of China. As one would expect, collectivism is high in Chinese cultures, with the main group of reference being the family (collectivism is target specific: Hui (1990)). This is rooted in both Confucianism and the ancient land system which ensured the farmer and his family were immovable for economic reasons. Mao attempted to weaken this influence, but perhaps it will be the increasing economic prosperity of China which may further weaken collectivism. A different approach is worth noting here in that Chen et al. (1997) suggest that increased economic success may be paralleled to a weakening of horizontal collectivism or interpersonal cohesion, and the strengthening of horizontal collectivism or corporate loyalty and identification: an aspect which may be

important in the development of corporate identity as we discuss below. Foreign Hofstede (1991) indicates a positive correlation between individualism and per companies and capita GNP. Individualism may well be on the increase in China (Nevis, 1983) as Chinese workers no doubt it has already been in Hong Kong. The implications for this in motivational terms may be a higher emphasis on individual achievement rather than the mutual reliance of the group or collective. 287 However, rather than the short-term achievement orientation of many Western societies, China is characterised by long-term values (Hofstede, 1991) such as thrift and perseverance. This is believed to sustain steady economic growth (Hofstede and Bond, 1988) which has been borne out until recently by the “economic miracles” of some of the Asia Pacific countries. Certain “quick fix” management approaches, suggested by many Western management specialists, may therefore not provide motivators in a Chinese context. Different perspectives on time between China and the West also have implications for the perception of objectives, where the achievement of short-term objectives as an indicator of individual achievement may not be appropriate. This has implications for the introduction of individually-based reward systems founded on goal achievement. A connected factor is that of locus of control (from Rotter, 1966), where Eastern cultures have a fatalistic view of destiny, where cause and effect is more likely to be attributed to external factors than internal factors which can be controlled by the individual. With a view that the individual has little control over short-term objectives, goal-based individual reward systems may not be appropriate. As we indicated above, many researchers believe that the value system in China is changing. For example, Cyr and Frost (1991) argue that Chinese workers are shifting towards a value system which is more goal-achievement oriented rather than egalitarian. However, an empirical study of work values in eight different countries including China (Elizur et al., 1991) indicates a low importance in China of “instrumental” values, such as pay, benefits, convenient working hours and working conditions. Taiwan scores high on the same instrumental values, which may indicate that the low importance of these factors in China is resulting from several decades of socialist influence rather than any fundamental Chinese cultural characteristic (assuming it is possible to separate these). Moreover, Vertinski et al. (1990) point out the greater weight traditionally placed upon ascribed rather than achieved status in Chinese society, being a reflection of Confucian values. The limited empirical evidence of motivational indicators in the People’s Republic of China does not therefore provide unequivocal evidence that China is moving towards an achievement society. It is therefore necessary for MNCs to consider specifically Chinese approaches to motivating employees, if they are to develop adequate personnel policies and practices within China. How might Chinese workers be motivated? There is evidence from studies undertaken in China, and among Chinese cultures, that particular motivational considerations apply in the Chinese context, and that certain motivational techniques have been successfully

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developed and employed. Child (1994) believes (following Tung, 1991) that the way Chinese enterprises motivate employees can be understood within Katz and Kahn’s (1978) model of “rule enforcement”, “external rewards” and “internalised motivation”. By expanding this model slightly, we can produce at least a partial explanatory model of motivation which may be employed in the Chinese context, and from this to make certain propositions about how MNCs may better motivate their Chinese employees, as follows. Rule enforcement (acceptance of the legitimacy of role prescription and organizational directives) Rather than the use of rules and role prescriptions being seen as addressing uncertainty avoidance, it may be regarded as a form of role protection in the Chinese context. Child (1994) provides the example of job descriptions carrying little motivational content in terms of tasks or objectives to be achieved, but as an insurance against being asked to take on additional and unknown duties and against being overworked. This may also be indicative of the avoidance motive, in not wanting to take risks because of a deep seated fear of punishment. However, the reverse side of the coin is the incentive to find ways around tightly enforced regulations in state enterprises in order to facilitate their running. Therefore, in order first to provide employees with a psychologically safe foundation from which to work effectively: Proposition 1: There is a need to structure work tightly around well defined parameters which are documented, communicated and accepted by employees and supervisors, with an emphasis on role protection as well as task performance. External rewards (attaching of incentives to produce desired performance outcomes) Material incentives have been used by China’s economic reformers in order to stimulate performance (Child, 1994). In terms of reward systems there is evidence that money is important in China as a motivator for employees. Also individual bonuses have existed in China since 1978 (Locket, 1987) and performance-related bonus incentives schemes since 1983 (Cyr and Frost, 1991). Cyr and Frost (1991) report on a survey undertaken in Eastern China in 1989 which indicates that workers would rather function in a system where pay is based on individual performance. However, there has been a tendency towards low differentiation of pay in an egalitarian reward system, reflecting a need to minimise competition and foster harmony in the workplace: a reflection of a strongly collectivist culture. Where pay differentials exist they are often based on length of service, perhaps reflecting respect for old age. It is also the case that state enterprise employees’ wage structures are extremely complex and based on a whole number of different subsidies, bonuses and allowances (Henley and Nyaw, 1987; Laaksonen, 1988). Employees may be reluctant to leave this type of system in favour of a less socially supportive one. Although there is

contradictory information about the desirability of performance-related pay, we Foreign know that there is a strong tradition of status accorded by ascription rather companies and than achievement, and often based on age and length of service. Even in Chinese workers European countries which are more ascriptive than the UK or USA, Managing by Objectives (MBO) type systems have been largely unsuccessful, particularly when related to pay (for the example of France, see Barsoux and Lawrence 289 (1990)) as young, high performing new-comers to the organization may be rewarded more highly than those of a higher status in the organization. Individual performance incentives also often ignore the longer-term, groupfocused performance which may be more important in a collectivist society, and instead focus on the short-term performance of individuals in isolation. Also, within Chinese society, there is an expectation that the enterprise will take care of employees through housing and other social benefits, which must have a strong loyalty effect. On an understanding that performance is short-term, while loyalty and belongingness are long-term: Proposition 2: Systems of pay should retain a strong element of reward through loyalty and seniority, as well as “belongingness” elements such as housing allowances. Internalised motivation (the internalisation of organizational and political cultural factors) A major source of internalised motivation in China has been through political indoctrination and campaigning (Tung, 1991). For example, there have been a number of “emulation campaigns” in communist China following the Soviet pattern where workers are encouraged to strive to become “labour heroes”. Chimezie et al. (1993) describe this as an attempt to appeal to high performers who might otherwise feel inhibited to perform in an exemplary manner in an egalitarian culture. Such practices largely have been discredited since the events in Tiananmen Square in 1989. However, a modern day equivalent can be seen in Japanese companies in China which send their best workers to Japan in order to learn from example and from being exposed to a foreign culture (Ireland, 1991). Through this exposure and emulation there is more willingness to change. In addition, by building on a sense of belongingness and loyalty of Chinese workers, there is a good opportunity to develop internalised motivation from developing corporate identity through a strong organizational culture (see Child, 1994). Indeed, foreign companies may have a particular kudos for Chinese workers, and this could be built on to encourage long term loyalty. Effective supervision would involve doing by example. New patterns of behaviour (including creativity and innovation) could be encouraged by emulation, both in the workplace and on training courses in China and, where appropriate (particularly for managerial and supervisory staff who can act as role models) abroad. Hence: Proposition 3: A focus should be placed on building corporate identity through effective induction and subsequent training programmes in order to

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promote “the way we do things around here”, as well as developing supervisors who can act as role models in developing and changing workrelated behaviour towards that supported by the corporate culture. Intrinsic motivation (the intrinsic attractiveness of the job) In a study of six Chinese enterprises in 1985 and again in 1990, Child (1994) found that employees were satisfied with the intrinsic job content and challenge, and opportunities to enjoy social relationships in the workplace. However, there was dissatisfaction with the prospects for advancement and promotion. This led him to conclude that enterprises could unleash a considerable motivational potential by creating opportunities for employees to advance. This bears out the known historical problems of hierarchy and advancement which we have discussed above. If we take the total employment experience of Chinese employees, and examine how we might develop the attractiveness of this, it could well be in the formulation of a career path for those who have successfully taken on board those work behaviours which are seen as appropriate to the organisational culture, and who themselves can act as role models in supervisory and management positions. Hence: Proposition 4: In order to develop loyalty, identity with the organisation, requisite work related behaviour and intrinsic motivation for the total employment experience, a clear career path should be visible for employees who can develop effectively as future role models. We now turn to the practices operated by foreign MNCs in China, to see how they try to motivate Chinese employees, and then to evaluate these practices against their apparent successes or failures. How do foreign enterprises motivate Chinese workers? Following the above discussion on the appropriateness of motivational practices with Chinese workers, what do foreign companies in China actually do? An in-depth survey of motivational policies and methods used in 13 international enterprises in China (see Table I) was carried out by the second author in Beijing, by interviewing key managers who were most directly involved in the formulation of motivation policies and their implementation (principally human resource managers, chief executives and production managers as appropriate to the enterprise), both foreign and PRC Chinese. These key managers, who had been subjected to Western practices, had some familiarity with data collection methods and interview techniques and were familiar with the management of indigenous Chinese employees. They were seen as the best source of information. First order data collection from Chinese workers and management was felt not to be suitable. Shenkar and Glinow’s (1994) review of the literature provides almost insurmountable methodological problems, which the current authors felt were beyond the scope of this study to address. These include for questionnaires: unfamiliarity; a tendency to complete mid-range values; failure

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Company ABB AEG Coopers & Lybrand EAC ICI Jardine MathesonE-Jian Technical Services Co. Ltd Jianguo Hotel Jing Guang Centre Maersk (China) Shipping Co. Ltd (A.P. Moller Group) Northern Telecom Novo Nordisk Price Waterhouse

Type of organization Joint venture Representative office Joint venture Representative office Foreign company Joint venture

Nationality of parent company Swiss/Swedish German Chinese American Danish British Hong Kong

Sector Electrical engineering and manufacturing Electro-electronics Hotel Auditing (LOTS) graphics divisions Chemicals Building services

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Beijing Toronto Hotel Joint venture

Joint venture Joint venture Foreign company

American Danish

Hotel Hotel Shipping

Foreign company Foreign company Joint venture

Canadian Danish American

Telecommunications Pharmaceuticals/ biotechnology Auditing/taxation/ consulting Table I. Companies surveyed in Beijing

to distinguish among variables and the production of halo effects far more likely than for Western respondents; problems with answering hypothetical questions; using the group rather than self as the frame of references; and reporting a desired rather than an actual state. For interviews problems include: reserving the most important points to the end; and “face” introducing distortions (see also Adler et al., 1989; Bond and Hwang, 1986; Metzger, 1977; Young, 1982). Managers were asked to describe the type of motivational techniques and methods they actually employed, and the rationale for doing so. In order to avoid a direct examination of methods company by company, we have generalized the results from the 13 companies as far as possible, and have pointed out exceptions where appropriate. We have subsequently classified their responses in terms of the modified Katz and Kahn (1978 ) model outlined above, as follows. Rule enforcement We first look at role allocation and performance by looking at the way responsibility is given and the way performance is directed through goal

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setting and appraisal, and then enforcement through sanctions for nonperformance, and reinforcement through praise. Responsibility. Generally there is a guarded attitude towards giving too much responsibility on the available evidence that workers like guidance and there is some fear of making mistakes resulting in inaction. Particularly older workers prefer clear instructions, although it was noted that many younger workers also prefer such an approach. Motivation is also seen as rising when more responsibility is given to employees in their own area. However, this is seen to come with experience, where, depending on the individual, more responsibility may be given. There is little evidence of precise job descriptions being used, and instructions seem to relate to the job at hand. General rules of conduct exist in some companies, and in one company these are made clear in a two-day induction session: no spitting, no smoking, how to dress and cut your hair (an in-house hairdresser is employed). Goal setting and appraisal. Several companies use goal setting extensively, and see it as useful. This involves the setting of individual targets, face-to-face performance discussions, and weekly to annual appraisals, depending on the company. Pressure and punishment. Direct punishment was only found in the hotel sector where some of the companies punish their staff for bad behaviour and not working. Deductions from salary or bonuses are seen to give positive results. For some offences up to three warnings can be given before dismissal. Penalty schemes for non-attendance at training sessions are also in operation. The use of pressure and punishment of this kind was not identified in companies outside the hotel industry. Praise. Companies seem not to praise their employees very often. Individual praise in front of the group is not often used deliberately except in the hotel industry. A view elsewhere is that this may be negative or embarrassing. External rewards Incentives within the companies surveyed involve packages which include to a greater or lesser extent, money, bonus systems, and welfare benefits. Money. Generally money is seen as important for recruiting and retaining employees, but not as a real motivator. It is seen as a hygiene factor in that it keeps staff in the company. Bonus systems. By law, a large part of an employee’s salary comprises bonuses and subsidies. This overlaps to a certain extent with the welfare package. Despite this, one company pays a fixed salary only. Some companies offer performance-related bonuses. One company has established smaller units or profit centres where performance measurement is undertaken monthly, and on which basis a bonus is paid to employees within the profit centre, with an element of the bonus reflecting also the performance of the company as a whole. Generally, it is seen that bonuses relating to individual performance would improve motivation, but this is not widespread.

Welfare package. This is seen as necessary but is not believed to motivate. Foreign The provision of housing in state companies causes problems when foreign companies and companies do not provide housing. By moving to a foreign company, employees Chinese workers lose their house. There is therefore pressure on foreign companies to provide housing or an associated benefit. Company provision of local housing also may cut down on commuting time, which may benefit productivity. Some companies 293 provide housing loans. For example, one company provided a ten-year tax free loan to key staff who had been in the company for at least five years. This type of provision is not seen as so important for younger employees living with parents. As Chinese workers give up benefits when they move to a foreign company, this has implications for recruitment. Internalised motivation There is evidence that some efforts are being made by foreign companies to engender corporate loyalty and belongingness through internalising factors of motivation, which combine elements of example setting, training, and social building initiatives. However, the evidence that companies are deliberately attempting to foster identification with the company is not overwhelming. Identification with company. Managers from at least two companies thought that working for a foreign joint venture or Fortune 500 company engendered pride in its employees. One company has a desire to promote a company culture without being specific about how they should do this, although the training aspects described below can be seen to contribute to corporate identity. One company also involves employees more by use of a suggestion box, a communication letter which did not last very long due to turnover and lack of resources, service campaigns, honesty campaigns, a smiling campaign, and badges and certificates for best workers. Training. Most companies report some form of training as part of their motivational programme. Examples include lunch-time learning where the company buys lunch while courses in computing, languages or technology may be conducted. On-the-job training for one company takes place in China, while their top engineers are sent to Europe for one month a year to attend special courses. One company has set up a (transient) business school in China based at local hotels for a few days at a time, with a view to setting up a permanent classroom in the near future. This type of activity is seen as enhancing the “Western spirit”, providing better qualifications and chances of promotion, and in some cases a chance of going abroad to train. There is also a danger of losing employees when they go abroad, and one company has adopted the practice of sending only married men abroad, to try to ensure that they return home. Other companies use the incentive of promotion on their return home. However, one hotel reported having to compel staff to attend training courses. When forced to participate, employees argue that they prefer to learn the handouts by heart, although the purpose might be to teach them to work in unforeseen circumstances. Punishment is given for non-attendance at training courses in this instance.

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Setting a good example. It is generally seen as important that the supervisor or manager should set a good example to employees, although this is not viewed particularly as a general policy. It is seen more importantly as motivating employees to do the job, as often when the boss is away employees are reluctant to work. Staff outings and activities. Several companies regard staff outings as motivators. Some companies encourage employees to organise these themselves, others have an impressive list of company organised activities, including sports, dancing, birthday parties, annual staff parties, events with relatives, and seminars. Intrinsic motivation We use the term intrinsic motivation widely here to refer to the total employment experience. Under this heading the job itself, including working conditions, job design and social aspects of work, as well as career, can be identified as providing some degree of intrinsic motivation from the sample of companies examined. Working conditions. There are some differences of opinion regarding the importance of working conditions. Generally Chinese workers are used to a lower standard from state owned companies and tend to have low expectations. Therefore air conditioning, for example, is believed by one company not to be overly important. In another company, employees in the hot summer prefer to stay in the cool office rather than to go home. So environmental factors are likely to serve as an added bonus if available. There is also a view that Chinese employees expect a European working environment if working for a European company, and therefore expectations are generally high. In this vein, the availability of computers is used in one company to feed the perception by Chinese workers of computers as a status symbol. This may also be seen as a mechanism to enhance identification with a foreign company. Job rotation and enrichment. Lip service seems to be paid to job rotation and enrichment schemes, as there is little evidence of these being used, or when used being particularly effective. When managers were probed, one mentioned the possibility of sending a secretary from Beijing to work in Shanghai. In another company the human resource department recommends job rotation for its Chinese workforce. However, supervisors and managers around the company have resisted implementing such a scheme. Social l ife at work. This aspect was not spontaneously mentioned by interviewed managers. One said that he spends longer talking to workers (including small talk) than in the West. He also spends more time with his local staff on social events outside normal working hours (such social events and activities have been discussed above under internalised motivation, and overlap with this aspect). There does not seem to be any mechanism used to encourage and foster the social dimension of work at the workplace, and this aspect seems to be left to extra mural activities. Promotion and career in company. Rapid promotion through an extensive staff ranking system is seen in one company as a very important motivational

mechanism. As the company is successful in China, it can offer more opportunities with the growth of the company. All other companies were silent on the positive use of career planning and promotion as a motivational tool. How successful are Western motivational techniques in China? We now address the question of whether or not the motivational techniques used by foreign MNCs and joint ventures in China have the desired effects of motivating Chinese employees. We know that there are problems generally of productivity and retention of staff, as we noted above. Especially, some of the companies sampled report high turnover rates, and a lack of flexibility in their financial resources to be able to introduce some of the measures they would like. One of the high performers in China has a well developed career planning and promotion policy as we saw, and this seems to have positive repercussions for its ongoing success. We are largely unable to compare directly financial success with the use of specific motivational techniques. This is simply because financial information is not readily available, and because of the methodological difficulties in establishing a connection between these variables in the presence of so many other contributing factors. We therefore evaluate motivational policies both in terms of the companies’ own admissions of success or failure in the area of human resource management, and against the four propositions regarding good practice which we outlined above. Rule enforcement We first proposed (Proposition 1) that companies should structure work parameters tightly within a well communicated statement which seeks to protect the employee within the role defined. Information coming from the sample companies suggests that this is not happening. Rule enforcement relates more to instructions for individual tasks, some goal setting, and the use of punishment and praise in at least one sector. Companies report a reluctance of employees to take on responsibility or to show initiative, and to be involved in participative decision making. They also report a need to closely supervise staff in order for them to work effectively (which may also be indicative of other problems). It would seem that the issues associated with rule enforcement and role protection is not therefore being directly addressed. External rewards Proposition 2 suggests that a system of pay should retain a reward for loyalty and seniority as well as a “belongingness” element such as housing allowances. Yet companies are reporting problems associated with a lack of an effective reward systems, such as staff turnover (often directly identified with pay) a lack of productivity (sometimes associated with housing problems) and a general lack of loyalty to the company through job hopping to get more pay. We saw above that motivational practices in companies centre on pay as a hygiene or holding factor and concentrate on a fixed salary plus some element of performance bonus, and reluctantly welfare provision such as benefits for housing. This does not seem to be seen as a motivational pushing influence or incentive.

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Internalised motivation In our Proposition 3 we suggest that corporate identity should be inculcated by effective induction and training programmes, and the development of supervisors as role models. We noted above that companies in our sample were keen to promote a company culture, but this was only generally addressed through training, and to a certain extent through organising out-of-work social activities. We have already indicated that companies identify a problem of a lack of loyalty and subsequent turnover, and it may be that companies are not doing enough in this area. One company even reports that employees have to be made to go to training sessions. This may be that the training is viewed as irrelevant, or that it does not have an effect of inculcating corporate identity. The other side of the coin is that training may be effective in developing transferable skills (companies report a lack of experience and relevant skills among recruits, particularly when they come from the public sector). This can only add to employees’ subsequent attraction to other foreign companies after a couple of years’ experience and training in one foreign company, and may result in job-hopping. Intrinsic motivation Our final Proposition, 4, suggests that a clear career path should be identifiable for employees in order to encourage them to develop as future role models and to instil intrinsic motivation for the total employment experience. Yet only one company really took career development seriously, and this was one of the most successful companies in our sample. Other companies identified a lack of resources in order to accomplish this. Other indicators of a lack of intrinsic motivation reported by companies were absenteeism, particularly at busy times and false expectations of a European working environment and attractiveness of the job, causing employees to become bored and disillusioned. To summarise, the problems of motivation and performance identified by companies include high levels of turnover, absenteeism, lack of productivity and a reluctance to take on responsibility and make decisions without guidance. These seem to be ongoing issues which must reflect on the efficacy of current organisational policies on motivating Chinese employees. Recommendations It is hoped that the current study will provide a useful starting-point both for Western managers who are confronted with the issues of managing a Chinese workforce, and for researchers who wish to further examine and verify the findings within this study. It is important that the weaknesses within this study are identified. China comprises 9.6 million square kilometres with huge differences between north and south, between coastal and inland regions, between urban and country areas, between special economic zones and areas not so designated, and between Beijing and the other major cities of Shanghai, Tianjin, Shenyang, Wuhan and Guangzhou. What pertains in one area may not be the case in another. We have also obtained information from managers who are most involved in decisions regarding motivational policies and practices. A further study among Chinese employees in order to get their views on

motivational practices would be desirable in order to further validate our Foreign findings, although such a study would have to surmount the methodological companies and problems involved in collecting data which we listed above. Chinese workers We have provided a partial model for understanding motivational issues within the Chinese context by modifying that of Katz and Kahns (1978), and through this have provided suggestions for how companies may tackle the 297 problems of motivation. There are two problems with providing firm advice to managers within this context. First, China is a complex country and difficult sometimes for outsiders to comprehend; and second, China is in transition and therefore constantly changing. Bearing this in mind, and taking into account the recommendations and discussion above, we close with specific structural and policy recommendations which follow from our four propositions. We indicate how these might be reflected in specific human resource practices aimed at motivating Chinese employees in foreign joint venture companies: (1) Organisational rules and procedures should be well documented and communicated in order to reduce risk and ambiguity. This should provide a strong element of “security” for employees by informing them of rules of conduct, the parameters and scope of their jobs, and expectations in terms of performance and quality. This reflects a need to protect employees within defined roles and rules, and should be operationalised in human resource practices by: • providing clear job descriptions as well as clear instructions for specific tasks. As confidence levels grow alongside experience in a foreign company, participation in the decision-making process could produce high levels of motivation, for carefully selected employees; • experimenting with praise and goal setting in order to raise confidence levels. (2) Structural reward systems should include a “loyalty” element which inculcates “belongingness”, and reflects seniority, rather than directly addressing an achievement motive, which may not be as relevant as in a Western setting. This should include provision such as housing allowances. Additional human resource practices should include: • ensuring money is commensurate with an employee’s standing in the organisation, as this may well be seen as a measure of success for individuals and for their family. (3) A strong corporate identity should be fostered, and human resource policy should reflect a desire to inculcate both common work values, and a belongingness to the company through: • developing effective induction programmes which draw the new employee closer to the company; • developing subsequent training programmes which reflect the way things are done in the organisation, while taking care not to

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concentrate too heavily on training for skills which are easily transferable to other enterprises; • focusing on developing role models: supervisors who are trained in the way of the company, and can gain standing in the organisation by representing the values and practices of the organisation; • as a foreign manager, working hard, not coming in late, not drinking tea all day, and expecting Chinese employees to copy your positive behaviour; • not getting too hung up on job enrichment programmes: these seem to have only limited success when they focus on individualistic values. Focusing on team working may be more productive. (4) Attention should be paid to developing clear career paths as part of human resource planning as well as through a need to develop loyalty, identification with the organisation, required work related behaviour and intrinsic motivation for the total work experience. Human resource managers should therefore: • present clear options for career development: this seems to be a major motivator, although significantly lacking in current motivational design. Career paths should be particularly visible for those who can develop as effective role models. The current study therefore indicates that the human resource strategy of foreign enterprises should clearly reflect a consideration of well defined rule enforcement; external rewards which are appropriate to the Chinese situation and reflect belongingness; internalised motivation through identification with the corporation; and intrinsic motivation which focuses on the total employment situation. In addition, this and other studies discussed above have identified a lack of sensitivity by Western managers on human resources issues, and a lack of understanding of motivators in the Chinese situation. For example, the study by Lu et al. (1997) identifies differences in management style as a primary cause of problems. It would seem that those responsible for human resource management are not sufficiently aware of what may work and what may not work in a Chinese situation. Steps should therefore be taken to develop appropriate training programmes prior to expatriate assignments, and provide opportunities for Western managers to reflect on their experiences subsequently in the job with colleagues, both Western and Chinese. It is probably through these measures which companies operating in China can most effectively and directly make the necessary changes to ensure optimum motivation and performance from Chinese employees.
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