The Impact of Human Resource Management Practices on Labour Turnover; a Case Study of a Insurance Company in China

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The Impact

of Human Resource Management Practices on Labor Turnover Case Study of Insurance Company in China

Abstract

With general globalization trends and blurring country bs , China becomes a target country for foreign investment . As the quality standards of goods and services produced for import in China are rising it becomes doubtful whether present human resource management strategies are efficient for retention of employees . Given the fact that employees in China prefer to work for multination corporations with foreign investment and Western human resource management styles , analysis of the impact of human resource practices on labor turnover in China becomes critical . Using data from Ping An Insurance (Group ) Company , Ltd , the Chinese insurance company covering the period from 1999 to 2005 , we analyze the influence of employee empowerment and compensation on labor turnover . Analysis confirms that employee empowerment and job level is negatively correlated with labor turnover similar tendency is observed for compensation . As we subdivide the sample period into 5 sub periods lasting for 2 years and consider the effect of human resource practices used in the company , the possibility of bias is minimized . The received results have direct implications for adjustment of the current human resource strategies

Outline

Introduction

Literature Review

Labor Turnover and HRM

B . Human Resource Strategies : China and Western Countries

Employee Empowerment and Compensation

HRM Programs Overview

Data and Methodology

Company Pro : Ping An Insurance (Group ) Company of China , Ltd

Organizational Structure

Organizational Culture

Human Resource Management Practiced

Data Covered

Methodology

Independent Variable

Dependent Variable

Results and Analysis

Conclusion

I . Introduction

Since 1979 , China has undertaken a strategy of economic reform that is essentially based on the Open Door Policy ' being followed by the Four Modernizations ' of the most perspective industries : agriculture manufacturing , defense , and science and technology (Bruton , Ahlstrom Chan 2000 . Consequently , there was a shift from command economy to the one mostly driven by market forces . China 's entry into the World Trade Organization , social and economic reforms , industrial consolidation have made it a highly perspective country for foreign investment . Within the past 5 years , Shanghai General Motors and Shanghai Volkswagen more then doubled output - from 280 ,000 to 600 ,000 units . Going even further country reached the largest output of steel in excess of Japan and United States together (Buck , Filatotchev Wright 2003

Table 1 : Per Unit Margins and Costs : Can of Soda

China is able to produce goods and services twice cheaper as that of in the United States . The major reason...