The Diffusion of HR Practices in Chinese Workplaces and Organizational Outcomes

How relevant are human resource (HR) practices in economies undergoing significant economic transition from a command to a market-based system? Using data drawn from a large sample of Chinese establishments, the authors investigate the spread of a range of Western-style HR practices in China and estimate the relationship between the adoption of these practices and three organizational outcomes: sales per employee, total labor costs, and unit labor costs. They find a mixed result for the relationships between labor management practices and establishment productivity. While the introduction of a number of HR practices was also associated with significantly higher labor costs, the results indicate a more mixed result for the relationship between these practices and unit labor costs. Their findings further the understanding of the relationship between work practices and organizational outcomes, and they help clarify the effects of the changing economic context on HR management in China.