Bulletin Number Three 1985

Labour Management and Union Development in China (in press). Part of the findings have been published in conference proceedings and in international and English, French, Swedish and Japanese journals. Value and Work Incentive in China —Irene H.S. Chow Employment, wages and personnel systems in China have been undergoing some changes in order to catch up with her economic reform and the implementation of the four modernizations. Wage system is primarily gainsharing and it is also a major component of the whole economic system. China has increased her efforts to upgrade wages and incentive systems so as to improve worker's motivation as well as efficiency and productivity. There are many forms of gainsharing: direct vs. indirect; government controlled mechanism vs. market forces; differentiated vs. egalitarian. China maintains a low wage policy. For the past few decades, basic wage and salary scales in all industries are established by the central authorities, according to the socialist principle: ‘from each according to his ability and to each according to his work'. China's wage policy is defined as (1) predominantly indirect, (2) controlled by social economic policy, and (3) egalitarian. In recent years, particularly since 1978, China's wage reform has changed her gainsharing patterns. Recent efforts have been made to raise the standard of living and improve productivity by adjusting the distribution of gain towards more direct gain- sharing. The rationale behind this reform is that the populous tends to increase its efforts and efficiency i f it can benefit directly from the results of its efforts through improved real income and standard of living. Managerial Values and Gainsharing Forms Managerial values and technical skills may affect the desired productivity results of a particular gainsharing system. Using Hofstede's methodology, it is possible to gain some insights into the Chinese managerial values. The following observation is based on preliminary data collected from several hundred cadres of different industries in different regions. The Chinese sample had a moderate degree of individualism and power distance, high uncertainty avoidance and low masculinity. What are the relationships between these value sets and the motivational power of various gainsharing systems? One way of tackling this question is to theorize the congruence between managerial values and the gainsharing forms. Clearly, the current Chinese leadership has determined to move China's gainsharing systems away from the pattern solidified over the last three decades and affectionately known as the 'iron rice bowl'. There is some concerted movement towards more direct forms. At the same time, some tentative experimentation with market mechanisms have emerged, though socio-economic ideology remains the overpowering mechanism for determining the value of contribution and related rewards. While in theory equality has prevailed in China for the last three decades, in practice wage differentials have been notable. The current policy is 'make some people rich first, then lead all the people to universal wealth'. What kind of managerial values would be congruent with these shifts? A move towards more direct gainsharing will probably require a moderate amount of masculinity among both workers and managers; and increasing individualism and managerial power distance, at least in the sense of legitimate power, will also be required. Moving towards market determination of value may call for a considerable degree of initiative, innovation, and risk-taking on the part of management. It will also be supportive of moderate individualistic or group competition. Moving away from egalitarianism would seem to require a higher degree of individualism, masculinity and risk-taking. It seems that the Chinese managerial values of high uncertainty avoidance and low masculinity may be incongruent with the gainsharing shifts underway. If managers are to actually manage Chinese industrial enterprises, then they may have to be selected and developed very carefully, both in terms of skills which determine the behaviour options potentially available to them, and values which will influence the choices they will tend to make among those options. Incentive Systems Another way of tackling the same question is to explore the kinds of incentive systems which today's Chinese managers believe would be useful in improving productivity and performance. A study was conducted in one of the China's largest cities in which forty senior managers from twenty-four Chinese organizations were interviewed. Each was asked to independently generate a list of potentially useful incentive systems and then evaluate each of these for motivational value for himself and workers under his authority. The motivational ratings were on a scale from 1-10. Twenty incentive systems were generated by them. Nine incentive schemes were mentioned five times or more, and the rank order 24 RECENT DEVELOPMENTS