China Business

How to Treat Your China Employees

China employee retention tactics

Interesting article by James Hudson over at China Success Stories. Article is entitled, Want Committed Employees? Learn to Trust Them. [link no longer exists] Its thesis is that if you want your Chinese employee to work hard for your company your company must show real faith in them and this faith includes trusting them to handle responsibilities and to have the freedom they need to succeed.

In the US law firm context, I 100% agree and this encapsulates my management philosophy, which is essentially that the key is hiring good people and then letting them thrive. The employee I have to monitor is an employee I do not want. Just get the job done.

But, is this the right employer philosophy for China? For all businesses in China? For some businesses in China? I do not know the answers to these questions because the closest I have come to managing Chinese employees is managing Chinese lawyers who we hire to work with us on China legal matters.

What do you think?

14 responses to “How to Treat Your China Employees”

  1. Hi Dan,
    It is a really interesting topic, lack of trust is a major source of problems in foreign companies operating in China, I am seeing this every day. And for some reasons most expat managers here don’t seem to notice.
    In my industry IP protection is essential, to the point that it has become an obsession. The problem is many managers use it as an excuse to keep info among themselves and not invite Chinese to some meetings because “who knows where they will go after with the story”.
    Local staff are not stupid and they obviously feel this distrust. As a result, that company has one of the highest staff turnovers in the industry.
    Ps. I am jotting this down as a draft and when I have some time I’ll develop a bit more on my Blog.

  2. The author of this story seems like a tool and his advice is bad as well. Leaving your employees unsupervised in China before they can be properly trained and vetted for trustworthiness sounds like a suicide mission.

  3. Dan,
    I agree with the philosophy as well — hire good people and let them run! The practical application of that ideal assumes the employee is of some skill level, a journeyman, and appropriately oriented to the company’s structure, management, etc.
    My experience with building two organizations in China is that most Chinese companies are still build around a more hierarchical structure than we are used to. My Chinese engineers weren’t “ready to run,” and needed my input more frequently than did my Western-trained engineers. That said, after a year or so of mentoring and orientation, they were ready for decision-making responsibility. At that point, I would agree completely that mutual trust makes better employees.

  4. Mutual trust is necessary for a successful business operation. It begins with getting trustworthy staff. Trusting any untrustworthy staff will kill the business, fast. Be careful about staff that will abuse, and exploit, your trust.
    The most difficult problem with trust is that you cannot train and educate them after they are hired. Trustworthiness must be developed very early on, before schooling starts.

  5. My company’s experience is that it is hard to find people who are willing to take responsibility for solving even basic problems. It’s harder to trust employees when they think that flailing vigorously is an appropriate substitute for good work.

  6. I agree with several of the comments above. Bad foreign managers come into China and think that Chinese can’t run anything–and that they don’t notice condescension. It’s much smarter to incorporate all employees, engage them and make sure that they know there is room for career development inside the company.
    This isn’t brain surgery, but people show up in China and throw all logic out the window.

  7. Some commonsensical means to avoid misunderstandings and conflict with the Chinese staff immediately come to mind:
    1) Always explain your reasoning behind any decision; fail to do so and the lowest possible motives will be ascribed to your decision.
    2) Do not allow authority to aggregate to the most competent English speakers nor allow those persons to “interpret” events or your intentions. Too often the most competent English speaker, sometimes a secretary, becomes the medium between the foreign manager and the employees.
    3) Measure performance by the same indices you would anywhere; stop making excuses for the culture. Yes, managing a situation, addressing an employee, all need an understanding of the culture to do it well, but that is not to be misconstrued as suspending common sense and commercial experience in dealing with persons and situations.
    4) Do not assume Chinese are strictly hierarchical; being privy to any discussion in Mandarin with a group shows a seeming chaos of opinion and interjections. Chinese are sensitive to position and stature in a company (as are Americans for example) but when encouraged to express individual opinion will do so if convinced that opinion will be welcomed. I’ll also add Chinese are no more political than the Americans of whom I have experience.
    5) Reward performance, and do so handsomely. If you employ a staff accountant the rest of the staff well knows the remuneration of everyone else, and the disparity between the remueration of foreign staff – most often illiterate in the language and totally dependent on local “gofer’s” for information and execution – and local staff is a sore point. Nothing says “second class” more eloquently than low pay at local standards.
    6) Avoid hiring local managers who excel at aggregating direct reports; their organizational chart is usually a flat line with all reporting to that one person. This manager is building up a resume for future employment and most often becomes “the foreigner handler” with foreign management out of the loop (see 2). The rest of the local staff resents this aggregation of influence.

  8. @ Cup of cha
    I don’t know about European managers, never having worked in Europe, but American management (mostly in large and medium sized companies) as a rule treats employees like children. Management/HR in the US consider it beneath them to explain the logic behind a rule or why decisions were made the way they were. And yet it has been my experience as an employee and a manager that a little education behind most decisions goes along way towards getting cooperation from the rank and file.
    Additionally, when employees feel they have an ownership stake (through profit sharing, honored bonus promises and actual stock offerings…not options) they perform better.
    It’s my humble opinion that “talent” coming from the management side of our business schools has completely tanked. There was a thread on one of my linkedin groups discussing this and the overall flavor of the thread was coming to the conclusion that if you graduated from certain schools, you could be 23-24 with no real working experience and get a management position (which results in arrogant, young pricks who act like school yard bullies) but if you graduated from “other schools” even with a much higher GPA and real working experience, you grabbed a rifle and got back into the trenches.
    Probably yet another reason behind the current debacle in the financial, real estate and management industry.

  9. There is a lot of talk about arrogant foreign managers who come into China and try to throw their weight around. On the other hand, my experience as a teacher has been that locals are, for the most part, not interested in learning other business cultures other than their own – so what is more arrogant than looking down on your employers and customers? It is claiming a superior right of ethnicity. It accuses racism because that’s the mental framework of the perceiver.
    It’s not arrogant to espouse different cultural values in China. It’s certainly not arrogant to utilize proven modern management methods in an international company. It’s called diversity and some folks can get on board or get controlled by people who do protect the company’s best interest.
    Trust is earned.
    Trust is a privilege, not a right.
    Call it racist if you like, but this is not based on race; it’s the Chinese themselves who have created a society based on racial divides, and a culture based on being a wolf in sheep’s clothing.
    Further, a meritocratic, lateral organization requires shared responsibility, accountability, and active problem-solving. At what point does a local learn how to function in such an environment? Sadly, not in my classes, though goodness knows I have tried.
    If an employee wants to be trusted, they should first prove themselves capable and worthy of it. And even then maybe not. Still, I try to keep an open mind. Just keep in mind that theirs is not a culture based on principles of Calvinistic personal accountability, nor merit-based multi-cultural egalitarianism. If someone insists on self-service, on what basis could they insist upon trust? I’d rather be blamed for condescension than be suckered by it.
    Just my opinion.

  10. Absolutely true. I’ve turned around and grown 2 manufacturing facilities in southern China, and I can tell you that employees will not only work hard, but will get results if you:
    1. Establish trust (as mentioned)
    2. Give clear and measurable objectives
    3. Help connect the individual objectives to the organizations objectives
    4. Challenge them
    5. Expect success, tolerate failure
    6. Respond to success with reward, respond to failure with understanding, analysis, and training
    I can’t stand hearing about how Chinese can’t innovate, think on their feet, work together, etc. etc. I heard that for years when I lived in Taiwan. Then I came to China and found out the truth.
    I would also say that Scott Loar’s comment, above, is incredibly insightful and well stated.

  11. hello there.
    we like chinese people. well the nice ones anyway. in fact that was a bit of a stupid thing to say, as we like all nice people ot just chinese ones.
    so there you have it. the story of our life.

  12. Well I employ 5 people out here in the sticks and I find that not paying them well works out just fine. You pay them extra for a good months work and the next month they go back to just average working and expect what they got the last month. 1 thing you have to do, as I have seen in many Chinese Co’s, is work them hard and long hours, I don’t like doing this but if you give them short hours and light work they get very lazy. The large Co. who’s premises I use for my small Co. recently moved production but left all the offices here but with no management and they are always dissapearing, work short hours and when they are in the offices, it’s usually to play computer games. I have found as a rule they have no self motivation and are unfamiliar with constant supervision (lack of middle management and/or supervisers is a big reason for poor quality products in China)- but it’s required to keep them up to speed. I assume all these post about the trust, equality etc. are for fellow office workers or management level – it’s different on a factory floor where I mix.

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