Labour flexibility and related HRM practices: A study of large Taiwanese manufacturers

Canadian Journal of Administrative Sciences, Mar 2001 by Heh Jason Huang, John B Cullen

Regression Analysis

Table 3 presents the results of multiple regression analysis on encouraging employee participation, with the factor scores of the five factors as the independent variables, controlling for the effects of size and firm age. There are no significant findings for effects from size and firm age. Both HRM paradigm and credentialism had significant effects on encouraging employee participation, while training had a marginal effect.

Discussion

HRM Paradigm

A major finding of this study is the significantly positive relationship between a set of HRM policies (job descriptions, job specifications, goal-oriented appraisals, grievance and appeal procedures, and job rotation) that encourage internal flexibility and encouraging employee participation. The companies that make use of these paradigmatic HRM practices also reported that they are more likely to encourage participation by their employees.

However, the negative correlations between firm age and these practices (cf. Table 1) point to the fact that these paradigmatic features are not quite compatible with the Taiwanese cultural tradition. For example, it is well known that Japanese firms usually express broad direction to their employees who accept ambiguity as a given in organizational life (Kagono, Nonaka, Sakakibara, & Okumura, 1985; Pascale & Athos, 1981). This should also be the case for Taiwan as its HRM practices are influenced more profoundly by Japan than by Western management thought (Farh, 1995). Also, in a Confucian value system that emphasizes obedience and loyalty, there is no clear line between in-role behaviour and extra-role behaviour for employees. Therefore, job descriptions in Taiwan companies are usually vague and job specification tends to be far from exact. Another important reason why job specification is difficult is familism (or quan-xi in a broader sense). The influence of familism in HRM practices within large Taiwanese companies is pervasive (Farh, 1995) so that selection of new employees, especially for important positions, is more or less related to quan-xi, and that job specification is rarely clear so as to allow some extent of managerial discretion. Therefore, it is not surprising that 1991 statistics showed that 58% of employed persons in Taiwan found their present jobs through referrals by relatives or friends (Farh, 1995).

For the determination of compensation, the Western practice of performance appraisal is usually goal oriented so that management sets specific measurable goals with each employee and then periodically reviews the progress made (Carroll & Tosi, 1973). However, the cultural trait of collectivism in Taiwan and other traditional Chinese societies is not compatible with a system of payfor-performance. Warner (1993) pointed out that collectivism is one of the major barriers preventing the development of Western-style HRM in a Chinese society. This is also the case for grievance and appeals procedures that constitute challenges to authority. Although Taiwanese firms today, as Western democratic values grow, may have established some kinds of grievance procedure, fair treatment for individuals is still a difficult concept within a system that emphasizes collectivism and quan-xi.