In Japan, companies are revamping their HRM policies to compete in a global world, in response to a decade-long economic slump. The traditional lifetime employment and a guaranteed tidy pension is giving way to the more Western practices of competing for jobs, of basing pay on performance, rather than seniority, and of making people responsible for their own retirement fund decisions.49
In China, too, change is under way. University graduates may now seek their own jobs, rather than being assigned to state-owned companies, though nepotism is still common. In a study of HRM practices in China, Bookman and Lu found that a key concern of Western managers in China was the compensation of the HCNs. In Beijing and Shanghai, top Chinese managers have seen their salaries increase by 30 to 50 percent in the last few years. They also received considerable fringe benefits such as housing, company cars, pensions, and overseas training.
The difficulty, too, was that in Western - Chinese joint ventures, the Chinese partner opposed pay increases. Yet when trying to introduce performance-based pay, the Western companies ran into considerable opposition and usually gave up, using salary increases instead. Setting up some kind of housing scheme, such as investing in apartments, seemed to be one way that foreign-owned firms were able to compete for good managers. Those managers were, understandably, maximizing their job opportunities now that they do not have to get permission to leave the Chinese state-owned companies.
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