The Human Resource Leader and The Management of Migrant Workers in China

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review

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Original languageEnglish
Publication statusPublished - 14 Jun 2012

Conference

TitleInternational Association for Business & Society (IABS)
PlaceUnited States
CityAsheville
Period14 - 17 June 2012

Abstract

When most countries around the world were reeling from the impact of the recent global financial tsunami, bucking this global trend was the People’s Republic of China, which registered an enviable growth rate of 8.7% in its economy in 2009 (National Bureau of Statistics, 2010). China has been described as an “economic powerhouse” (Pandey and Dong, 2009), more specifically as a “manufacturing powerhouse” (Banister, 2005), and even as the “world’s manufacturing powerhouse” (Ip, 2009). The enormity of the scale of manufacturing in China is reflected in the official data showing that in 2008, there were recorded 99 million manufacturing employees (Banister, 2011). Migrant workers indisputably form the backbone of industry, accounting for about 70% of the manufacturing labour force (China Daily, 2009b). Such success has not been attained without cost, both on social and economic levels, in particular the human resource issues related to migrant workers. The challenges faced by businesses operating in a rapidly expanding and transitioning economy are epitomized by the complex labour issues arising in this sector, exemplified by the spate of Foxconn worker suicides in 2010 as well as the Honda worker strikes also in 2010 which drew much media attention globally. With labour market reforms in China following the implementation of the Open Door Policy from 1980 and the subsequent inflows of foreign direct investment, there has been the rapid transference of western human resources management (HRM) practices into these joint or wholly foreign owned companies. Scholars and researchers have been particularly active in recent years analyzing and evaluating whether and to what extent these western-style concepts of HRM have been successfully transplanted into this Chinese socio-economic context and cultural milieu (Cunningham, 2010; McKenna, Richardson, Singh and Xu, 2010; Kim, Wright and Su, 2010; Chow and Gong, 2010; Li and Sheldon, 2010; Liang, Xie and Cui, 2010). However, with the recent widespread labour unrest, clearly the western-style (strategic) HRM practices focusing on enhancing output/performance, engagement and commitment of workers, were apparently failing. In order to reconcile the needs of both business and labour within the context of shifting labour market conditions in China, arguably HRM needs to be underpinned by socially responsible philosophies and practices within the organization. However, at the executive management level there needs to be strong leadership to champion these beliefs and oversee the transference, design and implementation of these values into the basic fabric of the corporate culture and operations.This paper focuses on the case of one of the largest manufacturing companies in the world, and how one senior executive in this Fortune 500 company, brought his values and experiences to bear in his leadership position within the HRM function. By leveraging on the concept of corporate social responsibility (CSR) and integrating this within the company’s overarching HRM strategies, this individual through his personal connections, created an innovative partnership with a non-government organization (NGO), which served to meet some of the fundamental needs of a vulnerable migrant worker population in the manufacturing sector.China’s factories are renowned for hiring “a very specific type of employee: industrious, mobile, with low salary expectations, and willing to work long hours” (Jiang, Baker and Frazier, 2007:170). Over time China’s manufacturing workers have notoriously been labelled ‘cheap labour’ (Ip, 2009) and attracted other derogatory descriptions such as ‘factory fodder’ (SCMP, 2010a). Migrant workers moving from the rural to the urban centres in China in their search for employment have unquestionably been subject to occupational discrimination (Chen, 2011) and borne the brunt of the poor conditions and minimal pay in the labour market. Treated like second-class citizens (Démurger, Gurgand, Li and Yue, 2009), the differential access to housing, education, medical and other benefits in the city has ensured that migrant workers remain vulnerable and insecure. From an organizational perspective, the reliance on and issues associated with migrant workers in manufacturing have enormous economic implications and pose significant challenges for business. Operationally there are myriad human resource related problems concerning, for example, the recruitment and retention (Li et al, 2010), engagement and commitment (Chow et al, 2010), health, safety and welfare (Yu, Lee and Tsai, 2010) of these workers. Industrial disputes have been on the rise too, with the Chinese Government’s official data reporting 317,000 cases in 2009, up 10.8% on the previous year (Xinhua News, 2010), signaling the dissatisfaction and growing intolerance of workers to their conditions, and their willingness to demand better treatment and remuneration, through the judicial system if necessary. These statistics concur with findings of scholarly studies that present a picture of the “proletarianization of Chinese migrant workers” (Chan and Pun, 2009:287), echoing earlier reports which sought to dispel stereotypes of the docile Chinese workers (Pun, 2009), and instead represent them more accurately as being willing to “utilize any leverage given within organizational structures [to] bargain for not only economic gains, but also for respect and autonomy” (Zhang, 2008:7). Additionally multi-national companies operating in developing countries are increasingly confronted by “important moral issues associated with the production of low-cost goods at the expense of labour health, safety and welfare” (Jiang et al, 2007:169), and it is this emergent awareness within the manufacturing industry, triggered often by unfortunate critical incidents or external pressures, which may serve to impel both reactive and even proactive initiatives by corporations to address the absolutely imperative and pressing issues of their ethical responsibilities to their employees.Despite “labour-intensive enterprises in many developing countries [feeling] great pressure….to improve working conditions” (Jiang et al, 2007:169), the lack of change in China meant that disturbing underlying social problems created by the tough conditions of factory work and life in manufacturing plants ultimately culminated in a tragic “spate of suicides at iPad plant” (SCMP, 2010b), allegedly resulting from work stress in the factories (SCMP, 2010c; SACOM, 2010) of the largest electronics manufacturer in China and the world which employs approximately 700,000 workers in China (Foxconn CSER Report 2008). Indeed it had earlier been documented that migrant workers have suffered social and psychological problems. A study by Donald and Siu (2001) highlighted that the lack of social support impacted on employees’ mental and physical well-being. Similarly Wong and Leung (2008) investigated the functions of social support in the mental health of male and female migrant workers in China, and proposed the provision of workshops and counseling and the strengthening of informal support networks to aid the migrant workers. In this paper, the impact of one individual’s leadership within a Fortune 500 company and one of the world’s largest manufacturers will be examined. From the establishment of a Corporate Social and Environmental Responsibility (CSER) programme, designed to facilitate the organisation’s strategy to ensure sustainability and add value to the overall business, it can be observed the far-reaching effects of such initiatives not only on the workers, but other stakeholders such as the local community in which the manufacturer is based. Based on the policies and standards prescribed by the Electronics Industry Code of Conduct (EICC), of which The Company is a founding member, the CSER programme was initially launched in Asia in response to the need to establish a strong employer brand to attract and retain professional as well as production talents. An internal market survey had revealed that employees aspired to work for a caring company, and CSER was conceived as the vehicle to articulate The Company’s vision and educate internal stakeholders. In The Company’s rhetoric the CSER programme was a reflection of how seriously The Company took its responsibility towards its employees, and its simultaneous efforts to engage with the community, environment and other stakeholders through sound business practices. The inception of the CSER programme illustrated the very strategic role that HRM can play, and the immense contributions it can make to the organization in the CSR area, under the guidance of a leader imbued with a crucial mix of values and experiences. The architect of the CSER programme was the Vice-President, Human Resources (Asia). With an educational training in social work, psychology and business, The VP(HR), a seasoned HR leader with experience in various multi-national companies prior to joining The Company, had garnered the accolade “Best HR Leader” at a practitioners’ annual awards ceremony. In recognition of the importance of migrant workers to the organization, and to address their needs and aspirations specifically, The Company through the direction of the VP(HR) had elected to focus on four key areas of improvement: living standards, work environment, social and recreation, learning and development. Given that a large proportion of its workforce are migrant workers who tended to live and work at the company site, transforming its campus facilities and improving the physical living and working conditions of employees, was perceived as paramount. Apart from providing a safe and healthy work environment for its workers, the company also looked into creating a climate that fosters trust and respect among its workers and supervisors. This need was identified from an internal employee engagement survey that showed a necessity for greater transparency in communications. Social and recreation considerations are particularly important since some large campuses belonging to The Company are located away from cities, which means that employees often have little to do after work hours. Realizing that this could potentially create serious social issues, The Company responded by devising a scheme that encourages its employees to participate in voluntary and community engagement activities, in alignment with the CSER principle of building better communities. Further reinforcing some of the above initiatives, The Company entered into a partnership with a non-governmental, non-profit, charitable organization dedicated to migrant worker causes. The collaboration between The NGO and The Company resulted from VP(HR) identifying a strategic need to direct CSR resources to the growing concern about the needs and aspirations of migrant workers in China, since 90% of The Company’s employees were migrant workers. While VP(HR) recognized that the basic economic needs of migrant workers might have been met, he was conscious of the fact that many of their other needs, including emotional and developmental, had not been sufficiently addressed. The Company subsequently provided seed money to help The NGO set up a migrant worker community centre and a vocational school in the locality. The Community Centre is a pioneering project, being the first officially registered tripartite collaboration between an NGO that is sponsored by a private company, and backed by the Chinese government. The Community Centre is the first such centre to be located inside an industrial park in China, thus enabling the centre to access directly all migrant workers. The scope of CCCF’s services includes the provision of psychological counseling; emergency relief to disadvantaged people; entertainment activities; training and learning classes; conducting special surveys, seminars, forums and other education activities; volunteers capability building and community engagement development; preventing and coordinating labour disputes.While it is still too early to assess the full impact of The Company’s numerous CSER initiatives, the feedback received from employees thus far has been positive. As one of the largest manufacturers in the world, The Company has averted the high-profile negative publicity cases that have dogged Foxconn for example. More than that, 13,400 respondents from China participated in The Company’s internal employee engagement survey, which measured their attitudes and feelings towards recommending the company to friends, their sense of commitment and pride, willingness to go the extra mile, and staying with the company in the next 12 months. The results showed a highly encouraging improvement in employee engagement in China of a 12% point improvement from 53% in 2007 to 65% in 2009. Perhaps testament to the success of the programmes is The Company’s achievement as the winner of an Employees Care Award, an honour bestowed by an NGO in China.In the face of the unfortunate events at the Foxconn factory sites which glaringly focussed the spotlight on the plight of migrant workers eking out a meager living on the production lines of the world’s factory, no government can afford to be passive or indifferent, or shirk its responsibilities in protecting the rights and welfare of its workers and citizens, if it wants to ensure that the economic prosperity of the nation is sustainable. The Company model under the direction of VP(HR) exemplifies one method of harnessing the tripartite synergies of the corporation, the NGO and the government, in taking care of its people.

Citation Format(s)

The Human Resource Leader and The Management of Migrant Workers in China. / PANG, M.

2012. Paper presented at International Association for Business & Society (IABS), Asheville, United States.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review