Comparative Study On HRM Effects In China And Pakistan

The study focuses on comparative human resource management practices which effect on employee job satisfaction, employee retention and financial performance in context of China and Pakistan. China and Pakistan has long history of strong and reliable relationship. Both states have strong political, defense, social and economic relations. In Pakistan, there is a huge Chinese investment which is about $46 billion that shall play pivotal role in development of infrastructure, roads, highways, port, and energy and communication sector and the companies of China and Pakistan hire the employees of each other. Many organizations of China and Pakistan face the challenge of having to address employee job satisfaction problem, employee retention problem which ultimately affects organizational productivity and financial performance.In the context of increasing competition in the global market.It is against this background that this research will look into employee job satisfaction problem, employee retention problem within the socio-economic context of China and Pakistan. This study brings the extent into focus which human resource management practices in China and Pakistan effects on employee job satisfaction, employee retention and business performance.This study attempts to draw upon a conceptual model which is called conceptual model for growth (CMG) to support my propositions. As how human resource management practices are used for employee retention, employee job satisfaction, effective performance and competitive advantage. The innovative idea is to combine together the human capital theory and human resource based view theory to make a new conceptual model through which HRM practices are used to satisfy the employee, retain the employees and ultimately get effective financial performance in companies of China and Pakistan. Before this conceptual model, there is no evidence of combination of human capital theory and human resource based view, and these theories are used alone.Therefore, through this new conceptual model (CMG), companies should attain a huge success in three areas of human resource such as in employee retention, employee satisfaction and performance.Human capital theory tell us about human capital is used for profit center point of view and Resource based view theory is used for development and cost center point of view. The resource based view thus provides a rationale for the reason why employees (labour) and human resource management should be considered when studying or pursuing competitive advantage and firm performance. The underlying assumption of human capital theory is that HR practices have a positive impact on knowledge, skills and abilities and subsequently on productivity. These theories suggest that HRM influences firm performance indirectly and uncovers the underlying HRM performance mechanism.The combination of human capital theory and resource based view theory is better suits to this research background than the other theories of HRM like equity, expectancy, social exchange and psychological contract theory. The combination of human capital theory and resource-based theory or view of the firm’s competitive advantage in particular will be the underlying theoretical foundation applied and fundamental basis of the variables and their ensuing relationships that are being studied. This is because this study will focus especially on the internal attributes (i.e. resources, capabilities and systems) of the organization towards attaining competitive advantage. Although there are also some minimal external dimension and elements being considered (i.e. interactions), these elements are mainly inherent within the organization. Hence, it justifies the adoption of the human capital theory and RBV as the main research tenet.This research is initial effort to compare the effects of HRM practices on employee job satisfaction, employee retention and business performance in three sectors of China and Pakistan. To accomplish this task, both quantitative and qualitative research approaches were employed. Kruskal-Wallis test, Sobel test, Pearson Correlation, ANOVA and regression analysis were used for comparitative analysis to check the effects of HRM practices in companies of China and Pakistan. A statistical analysis of these results indicates that some differences and some similarities. This research was able to provide some explanation for these differences and similarities. Some were cultural, other more sectors wise.First contribution of this research is Human resource practices linked to high satisfaction, high retention and high performance of companies in one country,might be useless or detrimental in another country,main reason of this the culture of country. Because national culture has high effects on employee satisfaction, retention and business performance. The findings of current study indicate that employees’ perceptions and desires of HRM practices do differ significantly across cultural boundaries of China and Pakistan. Significant differences between China and Pakistan combined practices appeared in five of six HRM areas when compared across cultural regions. Only recruitment and selection practice in China and Pakistan showed no significant differences when compared across cultural regions. In this study China and Pakistan differed significantly in training and development practice, in performance appraisal practice, compensation and reward practice. Respondents of China and Pakistan in this study demonstrated few differences within the HRM training and development area. The respondents of China gave more credibility to training as a current reward to employees but showed less desire to see this practice increase than do Pakistani participants. Respondents of Pakistan indicated both a higher perception and desire over Chinese respondents for training to increase teamwork within the company.The study also contributed that "there is no one size fits all "means all best HRM practices and policies of one country have no same results in another country. In China, Chinese respondents placed more importance to appraisals policies and practices as a current method to determine both salary and promotions but placed less desired value on these practices than do Pakistani participants. Chinese respondents were also less interested in using appraisals for goal achievement evaluation than Pakistani participants. Although Pakistan respondents saw seniority as a pay determinate, they displayed much less desired emphasis on this characteristic than do Chinese participants. Chinese respondents also saw pay as more of a current motivator but desired this practice less.The third contribution of this research is furnish a conceptual model for HRM practices called conceptual model for growth, The innovative idea is to combine together the human capital theory and human resource based view theory to make a new conceptual model through which HRM practices are used to satisfy the employee, retain the employees and ultimately get effective financial performance in companies of China and Pakistan. If companies of China and Pakistan implement this conceptual model into their companies, these companies can attain sustainable competitive advantage and increase in business performance, because this conceptual model gives same results in all systems of China and Pakistan. This study considers the problem through a direct comparison of practices in matched Chinese and Pakistani companies in order to establish where variations occur both within and between countries.In this study, it is recommended that there may be deep-seated differences between the two countries with regard to attitudes towards rewards which will limit the transfer-ability of HRM ideas in this area. These differences have been attributed to variations in culture.The findings of this research have implications for both theory and practice. The study provided some suggestions for policy makers for human resource practitioners as a guide in determining what initiatives company should adopt to increase employee satisfaction, retention and improve business performance.