July 26, 2016 East Meets West

Volume 9 | Issue 5

China manufacturing plants adopting western policies.

China’s rapid transformation into a dominant international business marketplace has compelled many manufacturing facilities to pursue higher standards. As a result, China manufacturers are making a significant investment in their employees, adopting more Western human resource practices. In the race for superior productivity, China plants can see the pay-off in investing in people, according to a recent report by the Manufacturing Performance Institute (MPI) and Development Dimensions International (DDI). Specifically, initiatives that help select, develop and retain people have proven to have a real impact on plant performance.

“Super Human Resources in China: Practices, Performances and Opportunities Among China’s Manufacturers” examined how manufacturing plants in China are adopting human resource programs and how those practices are contributing to the bottom line.

China plants, especially multinationals, are aggressive with employee and leader training and development, performance management and teaming, but were behind in the use of empowerment as a means to motivate and keep employees.

There is also a greater emphasis on building superior human resources programs, which has manifested itself in the rapid adoption of a full range of HR practices by manufacturing facilities throughout China. More than 90 percent of all surveyed plants in China use recruiting and hiring programs, performance management, employee development/training, teaming and safety and health programs.

This serious adoption is also proven by the number of plants that are classified as Super HR plants – those that indicate that six HR programs are rated as highly effective. Super HR Plants see significant benefits for their use of HR programs and when studied over three years, saw results that include greater improvement to ROIC, improvement to on-time delivery rates, increased production and better production output.

While many HR practices are still in their early stages of execution, plants will have to be patient and consistent to see real results that result from these practices. China’s dominance in global manufacturing is imminent, but for these facilities to experience superior productivity, they need to make a commitment to organizational transformation to focus more on their people assets.

Rich Wellins is Senior Vice President, Development Dimensions International (DDI). Ronnie Tan is Vice President/ Managing Director, DDI Asia. DDI is a global human resource consulting firm specializing in leadership and selection with 75 offices in 26 countries around the world. Visit: www.ddiworld.com

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