China Employment System Reform and Faultlines, an Empiricial Testing in China

Topics: Nationalization, Employment, Government-owned corporation Pages: 16 (4968 words) Published: September 13, 2009
CHINA EMPLOYMENT SYSTEM REFORM AND FAULTLINES, AN EMPIRICIAL TESTING IN CHINA

April 2006

Table of content
Acknowledgement
Abstract
1.Introduction………………………………………………………………………01 2. Literature Review…………………………………………………………..........02 2.1 Research on organizational faultline and performance
2.11 Definition of faultline………………………………………………………02 2.12 Tenure diversity……………………………………………………………02 2.13 Positive effect on diversity……………………………………….. ………..03 2.14 Negative effect on diversity…………………………………………………03 2.2 China’s reform of employment system………………………………………..06 3. Research Methodologies…………………………………………………………15 3.1 Sources of Data………………………………………………………………15 3.2 Measures………………………………………………………………………16 4. Result…………………………………………………………………………….. 18 4.1 Descriptive Statistics……………………………………………………...........18 4.2 Cox Regression…………………………………………………………………19 4.21 Relationship between faultline and organization productivity………………20 4.22 Relationship between faultline and employee turnover……………………..21 4.23 Relationship between faultline and organization creativity………………….21 5. Dicussion and Implication…………………………………………………………23 5.1Effect of faultline on organization productivity…………………………………23 5.2 Effect of faultline on employee turnover………………………………………..25 5.3 Effect of faultline on organization creativity……………………………………25 6. Conclusion………………………………………………………………………27 7. Limitation and Future Research ………………………………………………..28 References…………………………………………………………………………30 Appendices…………………………………………………………………………35 Appendix I:List of Tables

Table 1: Descriptive statistics of the data……………………………………………36 Table 2: Cox regression on the effect of faultline on productivity in 1991-2004……37 Table 3: Cox regression on the effect of faultline on turnover in 1991-2004………..39 Table 4: Cox regression on the effect of faultline on creativity in 1991-2004……….41 Appendix II:List of Figures

Data of the Sampling Units…………………………………………………………..44

Acknowledgement
I would like to show my sincere appreciation to my brilliant supervisor of this Honors Project, Dr.Ji Li for his invaluable advice and guidance for my honor project. With his opinions, this has improved my quality of this project. Also,I could feel consideration and warmhearted regards from him. Therefore, I would like to take this opportunity to Dr Li. Moreover, I want to give thanks to Stacy Liao who is an assistant of Dr Li and a master degree student. With her honorable help and opinions, I can do better on this project. Furthermore, I wish to thank my family and all my friends for their encouragement and support.

Abstract
This article studies the China’s employment system reform and the effect of faulines caused by this reform. It focuses on the proportion of new contract employees and tests how this proportion may influence employee turnover and productivity through processes of faultlines. It also studies the effect of this proportion and its related faultlines on organizational creativity. The results suggested that tenure diversity may not lead to a high level of turnover and may affect employee performance.

1. Introduction
People’ Republic of China was found in 1949, started form that time, a planned- economy system was used. Chinese state-owned enterprise employ permanent employee, which we called “steel bowl rice”. However, as to keep pace with the market, a new type of labor relations reform that is contract workers was employed. This study tests the effects of employment reform on enterprise performance in China because china is stepped onto the road of socialist market economy system. “Iron bowl system” is no longer suitable in the market and a new labor relation has established. Such a study will be of interest to both academic researchers and practitioners. There are little literatures on the tenure diversity and related research in China is very rare. This paper aims to identify the faultline between permanent workers and contract...

References: 2.13 Positive effect on diversity
On the positive side, diversity brings more perspectives and ideas to groups and is a source of innovation and creativity (Watson et al, 1993: Wiersema &Bantel, 1992)
284-85). As a result, the reform of employment system was slow-downed in 1990-1991.((Li, Jane Moy, Ben LY Sun, 2004).
After 1992, as the political environment became stable, the reform of the employment system was speeded up again. As Rawski (1995) observed, in 1991, nobody knew what to do about redundant workers in state factories.
In 1997, about 12 million urban workers in state firms, amounting to about 10 percent of state employees and 7 percent of China’s urban employment (Meng, 1999).
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