The Research On The Impact Of Labor Relations On Corporate Performance In Private Enterprises

Labor relations is the most important economic relationships and social relationships in modern society, its problems and contradictions have become one of the most important factors affecting current China’s harmonious and stable development. Especially in private enterprises, workers’ rights and interests have been infringed considerably and variously. Conflicts and disputes are dominant day by day, becoming unharmonious notes in the whole process of social development. In this regard, most recent research finds solutions outside the enterprises, however, which has little effect on resolving labor relations problems. This dissertation proceeds from enterprises interior, considering enterprises as the essential power to construct harmonious labor relationships. We take "Economic Man Hypothesis" as a premise, and study the effect mechanism labor relationship on performance from the angle of helping enterprises improve competitiveness and performance, to dissolve labor relations problems inter-organizational and to promote enterprises pay great attention to and improve labor relations.Main research methods used in this dissertation include literature research, case study, questionnaire survey and so on. Exploratory factor analysis, confirmatory factor analysis, descriptive statistics, cluster analysis, T-test, one-way ANOVA, correlation analysis, structural equation modeling, et al are applied as the main statistical methods by using software SPSS13.0and AMOS7.0. This dissertation exploit labor relations scale with the characteristics of private enterprises and reveal the influence mechanism of labor relations on business performance. The main results are as follows:Firstly, we do a comprehensive exploration through the existing literature describing measurement model of labor relations, and carry out in-depth interviews of16high-level managers and ordinary employees in3private enterprises. Then, based on Maslow’s hierarchy of needs theory, we assume the measurement model of the private sector labor relations. After experts interview, pre-test of102private enterprises and a large sample survey of406private enterprises, the measurement model is confirmed through structural equation modeling analysis and reliability test and validity test of scale. We obtain a conclusion that measurement model includes3latent variables of treatment-benefit, equity-security and development-promotion. Treatment-benefit include7observed variables on income, wage distribution, overtime distribution, labor safety and protection, working environment, welfare, rest and vacation time. Equity-security include8observed variables on signing rate of labor contracts, agreed period of labor contract, signing rate of collective labor contracts, social insurance, integrity of trade unions, active degree and protection degree of trade unions, the handling of labor disputes, internal complaint channels. Development-promotion include5observed variables on the informed degree of management, participation degree of management, training, promotion, reward.Secondly, based on Resource-Based View, the harmonious labor relations are regarded as company resources that are rare, inimitable and irreplaceable and can create sustainable competitive advantage. We investigate the impact of private sector labor relations on business performance from the point of strategic resources. Based on a series of study assumptions, through qualitative methods and quantitative methods, we verify and support the view that harmonious labor relations have a significant positive impact on business performance. We can say if the private enterprises can provide good remuneration and benefits, comprehensive social insurance and labor disputes resolving process, sufficient opportunity of development and promotion, they can enhance employees well-being and satisfaction, improve productivity, product quality and service quality, and gain more customers, profits and sales revenue.Thirdly, research framework which Resource-Based View, Social Exchange Theory and Knowledge-Based View are integrated is built to explain the relationship between labor relations and corporate performance. We explore the impact mechanism of labor relations on firm performance and describe specificly the black box. By establishing mediation effect theory model through literature analysis and case interviews, and testing model goodness-of-fit using the questionaire data, we verify perceived organizational support and organizational commitment in employees level and organizational capabilities in organization level are mediators in the effect of labor relations on business performance, so as to reveal a clear picture of discribing relationship between labor relations and corporate performance.Fourthly, path analysis of latent variables concludes that in the3factors of private sector labor relations, treatment-benefit has the the most significant impact on dependent variable and mediators. This conclusion shows that in relation to equity-security and development-promotion, treatment-benefit is more important to improve business performance, which means that enterprises improving treatment benefits of employees may achieve more with same work so as to improve business performance. The conclusion also shows that if enterprises want to improve perceived organizational support, organizational commitment and organizational capabilities, they need to focus on the welfare of staff, the level of treatment, and employees’distribution of income which can reflect employees’devotion to their jobs and contribution to their organizations reasonably.Fifthly, through cluster analysis and parameters estimation of structural equation model to investigate group emotional intelligence as a moderator, we find3factors of labor relations have more significant impact on business performance in enterprises with lower group emotional intelligence than with higher one. This conclusion not only demonstrates that it is important to create harmonious labor relations to improve the businesses performance in enterprises with lower group emotional intelligence, but also proves that it is particularly necessary to improve group emotional intelligence so as to obtain stable high businesses performance.