An investigation on the attitudes of Chinese workers towards individually based performance-related reward systems

Abstract

The study investigated the attitudes of Chinese workers towards individually based performance-related reward systems (IBPRRS). Participants were 106 white-collar workers employed in a Chinese new state-owned enterprise. In line with hypotheses, attitudes towards equality and equity-based rewarding were negatively and positively related, respectively, with attitudes towards IBPRRS. Also in line with expectations, both concern for loosing face (‘Mianzi’) and the belief that performance evaluations are affected by interpersonal relationships (‘Guanxi’) were negatively related to the attitude towards IBPRRS. However, in contrast to hypotheses, participants reported a more positive attitude towards equity than towards equality-based rewarding. Furthermore, in sharp contrast to the relevant hypothesis, the attitude of participants towards IBPRRS was positive. Ad hoc interviews with middle managers corroborated these findings and, furthermore, suggested that Guanxi and Mianzi were indeed impacting evaluations of performance, especially where there was an absence of objective performance criteria. The implication of the study is that although the views of Chinese employees towards IBPRRS are in principle positive, the cultural characteristics of China, and in particular Guanxi and Mianzi, must be taken into account for the successful design and functioning of such systems in the Chinese organizational context.

Keywords:

• Performance-related pay
• reward systems
• distributive justice
• China
• Mianzi
• Guanxi

Notes

1 It is appropriate to note that the findings of Giacobbe-Miller et al.'s (2003) study provide strong evidence for the pivotal role that culture can play in the acceptance and success of IBPRRSs, and by extrapolation, of any human resource management system. Their study, apart from the Chinese and American participants, employed Russian participants as well. Russia was under strict communist rule for longer than China (i.e. from 1922 until 1991) and human resource systems in Russia were similar or identical to those utilized in China before the economic reforms. However, in contrast to China, Russia is a country with an individualistic culture that has apparently persisted during the communist era (see Trompenaars, 1994). Russian participants in Giacobbe-Miller et al.'s (2003) study did not differ from their, presumably individualistic, American counterparts in the way they allocated rewards. And both these groups of participants were less likely than the Chinese group to allocate rewards according to the principles of equality (Giaccobe-Miller et al., 2003).

2 It should be noted that ‘face’ is a concept that exists in all cultures, including the Anglo-Saxon one, and not only in the Chinese culture (e.g. see Hwang et al., 2003: 74). However, the importance of gaining, and especially maintaining and not losing face, appears especially pronounced in the Chinese culture (e.g. see Bond and Hwang, 1986; Gabrenya and Hwang, 1996: 313; Hwang et al., 2003: 75), where it constitutes a strong motivating force for individual behaviour.

3 Although the magnitude of the relationship was rather low, and certainly much below what is considered as alerting for the possibility of multicollinearity effects (e.g. Berry and Feldman, 1985), experience suggests that even correlations of this strength can cause multicollinearity phenomena.