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Nielsen, Ingrid; Smyth, Russell --- "Hi-ho, hi-ho, it's off to work we go" [2006] MonashBusRw 4; (2006) 2(1) Monash Business Review 8

Hi-ho, hi-ho, it’s off to work we go

Ingrid Nielsen, Russell Smyth

Much has been written about workplace incentives and employee satisfaction, but few surveys have addressed the needs and desires of workers in China. This study by Ingrid Nielsen and Russell Smyth answers those questions.

Research shows that employees who are dissatisfied with their jobs are more likely to resign and/or be absent from work. Many employees spend more than half their waking hours on the job, so it’s not surprising that an unhappy employee may try to avoid, or change, their workplace. This job dissatisfaction which manifests as absenteeism or high rates of turnover can impact significantly on an organisation’s performance.

Thus, identifying and understanding the factors that make for a happy employee is pivotal to developing recruitment and retention strategies and incentives that organisations offer in order to attract and retain staff. Different people respond to different incentives in the workplace: some look for a good salary, others for job security. For many employees, the provision of opportunities for professional growth and development is important. Yet for others, an attractive job must come up-front with an attractive status. Increasingly, work and family life balance is on the agenda and workplace flexibility for employees with family responsibilities is fundamental to recruitment and retention of quality staff.

Many studies have investigated the dynamic interplay of workplace incentive structures and employee satisfaction, but few have addressed this relationship in a non-Western context. However as Australian companies increase their interests in overseas ventures – and particularly in Asia – understanding cultural differences in these areas must take an increasingly important position, as cultural values invariably influence what people want.

This study looks at the types of incentives that are important to workers in urban centres in Mainland China. China is a key destination for a wide range of Australian businesses. In 2004, Australia’s investment in China reached A$1.2 billion. According to the Australian Department of Foreign Affairs and Trade, a 2000 survey suggested that the estimated 300 to 400 Australian businesses operating in China were split evenly across manufacturing, property and business services, education, finance and mining. Australia’s business presence in China will be further facilitated by the implementation of the Trade and Economic Framework (TEF) signed in October 2003. The TEF provides a blueprint for the development of investment and trade links between Australia and China including, as its centerpiece, the proposed Australia China Free Trade Agreement, negotiations for which commenced between the two countries in March, 2005.

In November 2003, the China Mainland Marketing Research Company (CMMRC) asked more than 10,000 employees a series of questions from which this data is derived. CMMRC employs multistage stratified random sampling to ensure a representative sample in terms of age, gender and income. The characteristics of the survey respondents can be seen on Page 10. Employed respondents were asked about their current level of job satisfaction on a five point scale from 1 (extremely satisfied) to 5 (extremely dissatisfied). More than 40 per cent of the employed sample indicated that they were at least ‘quite satisfied’ with their job. Nearly 20 per cent indicated they were at least ‘quite dissatisfied’.

It’s not surprising that the respondents’ assessments of their current job satisfaction were skewed towards more favourable assessments as it is a widely recognised phenomenon that people tend to bias their self-assessments of all components of life satisfaction towards more favourable assessments. Nevertheless, the large percentage of the sample that indicated they were at least dissatisfied with their current job pointed to a need to further investigate the types of incentives that might increase worker satisfaction among this sample. Thus, employed respondents were asked to identify the two things they considered of major importance when choosing a job. Percentages of respondents who ranked each criterion in their top two considerations are reported for the whole employed sample and also broken down according to the respondent characteristics (see over page).

The three top criteria that employees considered when choosing a job were job stability, a high income and possibilities for professional development. More than 40 per cent of the sample considered job stability to be in the top two considerations, while close to a third considered a high income (36.1 per cent) and professional development possibilities (28.4 per cent) in the top two considerations. Collegiality and immediate professional status were the least important, with each being ranked as important considerations by less than 5 per cent of the sample.

Job security number 1

The need for job stability ranking No 1 is not surprising. China’s transformation to a socialist market economy has seen a vast change in employment stability. Before the economic reforms introduced in the late 1970s, which saw China transform its economy from a command to a market-oriented model, employment was guaranteed for all urban residents in China. As well as guaranteed employment, the danwei-based welfare system ensured most workers in the public sector were covered for industrial injury, maternity, medical and pension insurance as well as a range of other entitlements associated with ‘cradle to grave welfare’ such as free health care, free schooling for the children of employees and even death and funeral subsidies for the dependents of employees.

In this sense, work units acted as mini welfare states, providing subsidised housing as well as cultural and recreational facilities for their employees. China’s marketisation process and its opening up to the outside world have seen both winners and losers in the major urban centres. While most observers would agree that the market reforms have had an overall positive effect on the living standards of the urban populace, it has also had its casualties. Among these are those workers who suddenly find themselves either unemployed or in precarious employment after the relative ‘luxury’ of guaranteed employment. According to official figures there were 26 million workers laid off from state-owned enterprises alone in urban China between 1998 and 2002. Given this enormous change, it is not surprising that Chinese urban residents would seek to reclaim a sense of job stability and hence rank this consideration as, overall, their most important when choosing a job.

It is also not surprising that urban Chinese workers might rank a high income among their top two considerations when choosing a job. While money has the potential to satisfy a variety of needs, it definitely supplies the basics: food, clothing and housing. Perhaps for this reason, a high income has frequently been shown to be of particular importance in low-income countries. Given that the average annual income in China’s urban centres is very low relative to developed countries (according to the World Bank figures from 2004 on global GDP, China ranked 105 compared with Australia at 21 and the US at four), the importance placed on a high income in our Chinese sample is expected.

Gender results

A higher percentage of male respondents nominated income and professional development opportunities among the top two considerations, while a higher percentage of females nominated job stability. While work/family balance was considered important by only 12.6 per cent, a higher percentage of females placed work/family balance among the top two considerations. Work/family balance is more important to female employees in urban China because they are the primary caregiver for children and the elderly in Chinese society.

These results show that when employing incentives in the workplace to attract or retain staff in urban China, it may be useful to consider different approaches for males and females. Males may respond more to monetary and development incentives and females may be more attracted to companies that recognise their concomitant familial responsibilities while guaranteeing their employment longevity.

Marital status also made a difference. A greater percentage of unmarried respondents ranked both high income and the possibility of professional development among their top two criteria when choosing a job. On the other hand, a greater percentage of married respondents nominated job stability among the top two considerations. Married respondents also endorsed the importance of work/family balance more frequently than unmarried respondents (14.9% married to 7.2% unmarried).

Marital status was also a factor in considering social insurance as a workplace incentive. In urban areas, changes to the danwei-based social security system that have accompanied market reforms have placed social protection in the forefront of the Chinese urban worker’s mind. Before these reforms, urban workers in the public sector enjoyed automatic and comprehensive coverage under the Labour Insurance Regulations of the People’s Republic of China. Since the reforms however, China does not have a national social insurance law and as such, provincial and local governments have their own rules in accordance with national guidelines. For many workers, social insurance payments are inadequate and for others, despite the obligation on employers, non-existent. It is not unusual for organisations to underpay – or neglect to pay – their social insurance obligations, and such practice is not discouraged by the fact that government surveillance and enforcement mechanisms are weak.

Age was also a consideration as older respondents, like married respondents, ranked job stability, work/family balance and the provision of social insurance in the top two considerations more frequently than did younger respondents. But younger respondents, like unmarried respondents, considered high income and the possibility of professional development more important than did older employees. This result paints a picture of two very different types of Chinese workers: on the one hand, those young and unmarried workers who are more career-oriented, and those older and married workers with ongoing family responsibilities.

Coastal versus non-coastal residency (one quarter of the sample came from seven coastal cities. For further details, contact the authors) also made a difference to the considerations of income, work/family balance and social insurance, with coastal residents nominating high income as important more frequently and non-coastal residents nominating both work/family balance and social insurance more frequently. Again this result was expected. China’s coastal provinces are more developed and marketised and, as such, more consumer-oriented relative to the non-coastal provinces. Individuals in the coastal provinces are more career-focused at the expense of traditional Chinese family values.

Implications for management

While monetary incentives and job stability ranked highest in workplace incentives to both attract and retain valuable employees, the group differences observed have important implications for management. This report found two rather contrasting employee types:

The younger and unmarried coastal residents who appear to have embraced the potential that marketisation may have for their careers. They want money and a job with prospects. They are less interested in job stability, perhaps because they are not from a generation where guaranteed employment was a right. They are likely to respond to a combination of income and job design incentives, which together progressively increase salary and organisational responsibilities.

The older and married employees who desire job stability and social protection, perhaps as they are from the pre-reform era when such benefits were not benefits but rights. They desire jobs where there is a balance between work responsibilities and family commitments. As they are an older generation, it may be that these workers – and particularly the females among them – have responsibilities for both dependent children and ageing parents. They are likely to respond to incentives offering security and flexibility that in terms of the former, are symbolic of pre-reform China, and in terms of the latter, reflect traditional Chinese family values.

Cite this article as

Nielsen, Ingrid; Smyth, Russell. 'Hi-ho, hi-ho, it’s off to work we go'. Monash Business Review. 2006.; Monash University ePress: Victoria, Australia. http://www.epress.monash.edu.au/. : 8–11. DOI:10.2104/mbr06004

About the authors

Ingrid Nielsen

Ingrid.Nielsen@buseco.monash.edu.au

Ingrid Nielsen is a Lecturer in Organisational Behaviour in the Department of Management at Monash University, and a member of the Asian Business and Economics Research Unit in the Faculty of Business and Economics, Monash University.

Russell Smyth

Russell.Smyth@buseco.monash.edu.au

Russell Smyth is a Professor and Deputy Head of the Department of Economics, and Director of the Asian Business and Economics Research Unit in the Faculty of Business and Economics, Monash University.


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