tcl

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Strategic HRM in TCL

The 4th Largest Electronic Co. in China

TCL Corporation is a comprehensive, large-scale state- owned enterprise, established in 181. In. years, TCL has grown from a small audio cassette factory to an enterprise with annual sales in excess of RMB 0 billion. TCL is well known in China and abroad and has developed in many areas such as multimedia electronics, home electronics appliances, telecommunication equipment, information components, and electronics components. Moreover, TCL has undergone a period of substantial progress, and is one of the fastest-growing major industry manufactures, having racked up a compound annual growth rate of 47 % in the past decade. Today, it leads in all the four key industries. As a whole, TCL is ranked fourth in a rating China¡¦s 100 prestigious Electronics & IT enterprises and TCL brand value in 00 reached RMB18.76 billion. In 00, the TCL Group had total sales of RMB 1.billion and export revenues came to US $1.16 billion. TCL also generated a profit of RMB 1.5 billion in 00, and paid RMB1. billion in taxes.




TCL has formed its own core market concept and management mechanism by initiating new market initiatives, such as ¡§well-planned market promotion¡¨, ¡§hard-working¡¨, ¡§thousand-shop project¡¨, and ¡§service-based marketing¡¨. Through 10-year¡¦s non-stop efforts and taking the leading position in the market, TCL with 10000 professional distribution staff- who have established an extensive nationwide sales and distribution network with a computerization progress that reaches across the whole country incorporating over 0 branches, and has set up overseas sales offices or business representative offices over 10 countries. TCL is currently expanding it¡¦s brand colour TV operations in Vietnam , India and Germany and this speeds up exploration of overseas market and consolidates its corporate development,. TCL is extending his presence in multimedia TV, telecommunication , information and electric components fields. From 16, TCL successively acquired Hong Kong Luk¡¦s Enterprise in the colour television project, Henan Meile Electronics Inc, Mongolia Caihong TV Co., WuXi Yonggu TV Co., and Zhongshan Suohua air-conditioner factory which further developed and expanded TCL product scale. The objective of TCL is to become a world-class enterprise in the context of a global economy in future 10 years.

TCL corporate philosophy is to ¡§provide value for customers, opportunities for employees and benefits for society¡¨, and the enterprise principles are ¡§dedication, sincerity, teamwork, and innovation¡¨. With ¡§developing the best product, providing the best service and creating the best brand name¡¨ as the company¡¦s competition strategy, 40000 TCL people will well position for ¡§innovation & Technology¡¨ and persevere in constructing and creating management system.

How TCL grew into a big corporation from a small unit? This did not happen easily. Looking into its history and its leader, we can see its success have been woven with lots of strategic thoughts and practice. I can say that TCL is a good example to apply HRM well in reality.

What is HRM?

HRM started from 160 and from 170s and 180s, it became increasingly apparent. While UK and US¡¥s industry were failing to compete effectively at an international level, Japanese manufacturers started to penetrate the market. HRM started to cause more and more concern in the worldwide sense. Let¡¦s see how Human resource management (HRM)¡¦s definition. It is described by Beret Al (184)

Human resource management involves all management decisions and actions that affect the relationship between the organization and employees-its human resources.

A further definition is provided by Pettigrew and Whipp (11) who suggest that

HRM relates to the total set of knowledge, skills and attitudes that firms need to compete. It involves concern for and action in the management of people, including selection, training and development, employee relations and compensation. Such actions may be bound together by the creation of an HRM philosophy.

The definition was divided into by Story (187), one is ¡§hard¡¨, and another is called ¡§soft¡¨. Let¡¦s see any difference between them. It will help us understand HRM more.

The ¡§hard¡¨ version emphasized the ¡§quantitative, calculative and business strategic aspects of managing the head count resource in as ¡§natural¡¨ a way as for any other economic factor¡¨. Thus, employees are treated as just another part of the input-output equation. Hard HRM strategies are concerned with improving employee utilization (the cost effective approach) and getting them to accept that their interests coincide with those of the organization (the unitary approach). Re-sourcing strategies and practices will aim to recruit and develop employees who ¡§fit¡¨ the organization¡¦s culture. A hard HRM industrial relations strategy will develop direct links with individuals and groups of workers, and may bypass the trade unions and their representatives. In this extreme version, hard HRM will deliberately aim to marginalize trade unions (or do without them altogether). Employees will be involved in the improvement of quality and productivity, but are unlikely to participate in business decision making. This ¡§hard¡¨ version therefore stresses the management aspect of HRM.

The ¡§soft¡¨ version emphasizes communication, motivation and leader-ship. It is concerned with developing what Handy (18) call a ¡§culture of consent¡¨ and recognizes that employees cannot be treated just like any of the other resources because, unlike them, people feel and react. There is more emphasis on strategies for gaining commitment by informing employees about the company¡¦s mission, values, plan and trading conditions, involving them in how work should be organized, and grouping them in self-managing teams, A pluralist view is taken which recognizes that the needs of employees will not always coincide with those of the organization, and care is taken to balance the respective needs, so far as this possible. If there are unions, it is recognized that they have a part to play in representing the collective interests of employees, but the company maintains it s right to communicate directly to individuals.

The ¡§soft¡¨ HRM is broadly accepted and practice. And this led to a ¡§map of HRM territory¡¨, the core of which Beer et al. refer to as the ¡§four C¡¦s¡¨

„X Competence of employees

„X Commitment of employees

„X Congruence between the goals of employees and those of the organization.

„X Cost effectiveness of HRM practices.

A summary of these factors gives a good flavour of what this approach entails.

„X High commitment means that employees will be motivated to ¡§hear, understand, and respond¡¨ to management¡¦s communications relating to the organization of work. The resulting mutual trust enables managements message to be more believable to employees and to enable management to be responsive to employee¡¦s legitimate concerns as stakeholders¡¨ (Beer et al. 1846)

„X High competence creates a positive attitude towards learning and development and , thereby, gives employees the ¡§versatility in skills and the perspective to take one new roles and jobs as needed¡¨ (p.6)

„X Cost effectiveness ¡§means that the organization¡¦s human resource costs-wages, benefits and indirect costs such as strikes, turnover, and grievances have been kept equal or less than competitors¡¨¡K only a continual process of mutual influence about the realities of the business and the needs of employees can bring about this outcome¡¨(p.6)

„X Higher congruence is a reflection of polices and practices which bring about a higher coincidence of interests among management, shareholders and workers¡¨ (p.6) a situation encouraged by forms of employee influence which, in turn, reduce adversarial relations.

We should not overlook the philosophy of the HRM .Lets see how the influential Harvard School, as represented by Beer and Spector (185), express its philosophy

We believe that a set of basic assumptions can be identified that underlie the policies that we have over served to be part of the HRM transformation. The new assumptions are

Proactive system-wide interventions, with emphasis on fit, linking HRM with strategic planning and cultural change;

„� People are social capital capable of development;

„� Coincidence of interest between stakeholders can be developed;

„� Power equalization is sought for trust and collaboration;

„� Open channels of communication to build trust and commitment

„� Goal orientation; Participation and informed choice

Upon this philosophy, they treat employees as valued assets, emphasize on commitment rather than on compliance and value strategy and culture.

The aim of HRM will let us know better how to use HRM properly in an organization. The aim of HRM is

o To enable management to achieve organization objectives through its workforce

o To utilize people to their full capacity and potential;

o To foster commitment from individuals to the success of the company through a quality orientation in their performance and that of the whole organization(Guest 187);

o To integrate human resource policies with business plans and reinforce an appropriate culture or , as necessary, reshape an inappropriate culture;

o To develop a coherent set of personnel and employment policies which jointly reinforce the organization¡¦s strategies for matching resources to business needs and improving performance;

o To establish an environment in which the latent creativity and energy of employees will be unleashed;

o To create conditions in which innovation, team working and total quality can flourish.

o To encourage willingness to operate flexibly in the interests of the adaptive organization and the pursuit of excellence.

There is the nature of the linkage between HRM and business strategy . Only these two ¡¥s integration will have the deep effect in a big corporation. The following formulation will help us to understand it much thoroughly

External Environment & Internal Environment

Strategic Formulation



The organization¡¦s vision, mission and values convey to employees answers to questions such as Where are we going? Why are we going there? And how will we get there? The answers to these questions are of major importance when managing human resources. Consequently, the HR leader and staff need to be involved in the creation, maintenance and revision of the organizational vision, mission, values and general strategy. HR professionals help ensure that other managers behave in ways that are consistent with the corporate vision, mission and values. They also can facilitate their inclusion in the in definition and articulation of the strategic business issues and objectives

TCL is the example of practising the soft model HRM and they know that it is easy to say to produce the first-class world products but in reality there are so many strategies and so much various effort have to put it to materialize the goal - just as we build up a building not only with the blueprint and it needs the concrete, water, bricks ... In order to reach the goal ,the chairman MR. Li led the delegation several times to Japan, America , Europe many countries to gain others countries experience and the strategies . TCL consulted the foreign consultancy companies and experts to diagnose their company. Soon after they have got the ideas, they formed the group of experts and professors of all over the country to study how to put strategic HRM into practice and let it align with their objectives, The following strategies are part of TCL¡¦ s practice

To Build Employee Capabilities,

Competency Identification and Development

TCL recognizes the importance of developing employee competence in support of its values and the achievement of its strategies. HR has facilitated the development of a competency method for TCL top leadership which is fully supported by the senior management team and is actively used in recruitment, selection, development and performance. They set a booth in the human resource market in Guangzhou to recruit the staff according to what they need such as the graduates from university, excellent engineers from north and overseas MBA students with the new ideas and new styles. They put them in the training course for three month and let them understand the company¡¦s strategy and the process of procedures after they have been accepted. They set up an activity called ¡§To be TCL people¡¨ and let the employees feel proud of working in TCL.

TCL believes that participation decision-making is a crucial ingredient in the process of facilitating ¡§ownership¡¨ among employees provides the company with a potential source of competitive advantage and heightens the quality of decision-making. TCL gives its employee-owners significant information about the ongoing financial condition of the business .They published they own newspaper in which were financial report, latest news and the development of the company.

To Build Employee Commitment,

The vision for Corporate Community

The leader of TCL often uses the Chinese old saying that the water can carry the boat but it also can capsize the boat. He refers the water is the employees and the boat is the company. So the quality of the employees is very crucial to the success of the company. To build up the employee¡¦s loyalty and commitment to the company is the must way to retain the quality of the company. Whether HR functions well or not can be shown here. Their newspaper has one column especially for the feedback from the employees and the company encourages the free speech and the leader has a direct hot-line for the employees once a week. TCL¡¦s core values are

Making a meaningful contribution to our customers

Cultivating community, participation and people development

Creating economic value for investors and employee-owners

Responding to chance through design and innovation

Living with integrity and respecting the environment



Most of the employees are well educated and very talented and they have the strong competitive competence. It is a big issue how to let these elites to settle down in TCL to create value. To solve this problem, the TCL leaders have had several discussion meetings and set of the standards to retain the elite to serve the company¡¦s goal. TCL has built up lines of buildings and offered the new comers a set of apartment, an attractive remuneration, and practice the gain-sharing bonuses scheme giving the company share according to the different position and the years they are serving in the company. If the new comer comes from the North, he/she will be allowed their family come to live together in the same year. And these did not always happen in the big cities in china at that time because there are limit quotas to let other provinces people to enter the different city.

TCL have used their economic power to influence the government officers to uplift the limit for them and overcome this problem as to make the staff feel much secured, from here we can see that the top managers in TCL treated employees as a great value as TCL believes that every effort they have made will help to increase the sense of ownership among employees.

For TCL, these core values lead ineluctably to the conclusion that employee¡¦s ownership is crucial to the success of the firm. Employee ownership, in turn, requires significant levels of employee participation. Within this context, TCL has developed a management style and structure that excels at building employee-owner commitment and cooperation. And in treating the employees with respect, dignity and as a value resource. They use TCL uniform strengthen the employees¡¦ sense of belonging.

Improving the Professional Capability of HR

Fundamentals of HR infrastructure

TCL has also done a good job of deploying ¡§HR fundamentals¡¨ to employees. For example when recruiting, selecting and promoting employees, they looks for technical as well as non technological skills - the ability to work in teams, business acumen, initiative, leadership and conflict resolution skills. They take the external ability into consideration because they believe that it would be difficult to fit into the culture at TCL without those attributes.

To facilitate the selection process, TCL has developed a competency-based selection process based on 1) determining competencies necessary for success in a position, ) producing interview questions focusing on those competences, ) conducting behaviourally-based interviews, 4) evaluating candidate response and 5) making an integrated hiring decision. New employees are selected by the people from HR and from the area for which the candidate is being interviewed. Once a hiring decision has been made, a New Employee Orientation program and a series of related tools help acculturate new employees to TCL¡¦s mission, vision and values and integrate them into TCL¡¦s organization.

Conclusions

Through the practice of Strategic HRM in TCL, they have achieved the position of the 4th Largest electronic Co. in China. We can tell from the above analysis that TCL has successfully deployed Strategic HRM. Their way to success is the way they treat the employees as values which is totally different from the traditional working relationship in China . It has made itself famous for it¡¦s innovation in it¡¦s relationships with employees

.

Most of Chinese government owned companies¡¦ leaders have the remote relationship with the employees because they think that only keeping a solemn face can keep their dignity and authority so they promote the employees to the managers¡¦ position not depending on their competence but decided upon their good relationship with them and protect the leader¡¦s own benefits. They don¡¦t care the benefit of the company because they are promoted or not according the relationship with the top leader. This bureaucracy is a very big problem in China. Fortunately, it is gradually diminishing through the government¡¦s innovation. TCL experienced many difficulties in practising Strategic HRM during the 180s in China which was filled with the feudal hierarchical thought at that time . TCL felt confident in practicing strategic HRM. Today TCL feel very proud that their line managers have a strong education background, which is of great benefit to TCL and their staff have strong sense of belonging to TCL which creates a great value to TCL.

When asked about the critical success factors in TCL, the Chairman Mr.Wu DongSheng answered, ¡§there were three of them, one is the innovation to increase the competition of our company, the second is to populate professional education of employees and improve the employees¡¦ competence, the third is to treat them with dignity and proper remuneration and build up their sense of commitment.¡¨ From here we can see that TCL believes that its future success depends largely on the employees who serve the customers. Treating staff reasonably and involving them in the business, and they are more likely to be confident in themselves so their work will give the customers a better service. As satisfied customers will lead to a more successful and thriving business, thus completing the virtuous circle of potential business and individual success.

Through the practice of Strategic HRM, TCL has consolidated its foothold in national market and become much confident in opening up the new market in the world. In September of 00, they successfully took over Snild electronic Co.¡¦s brand in Germany and they used the Snild ¡¥s brand and some fixed assets to establish a Snild Electronic Co., This year in IFA (Berlin), they have signed the sales contract over 0 million (EURO$). With all the success, TCL believes that Strategic HRM has helped it becoming a successful international Electronic CO. and they hope that more and more countries use their products and their service. Strategic HRM is the proof of TCL¡¥s success.

Recommendations

Of course, no matter how nicely HR functions well in TCL. There are still some improvements in TCL. One aspect should be

Feedback.

The feedback in TCL was not sufficient and should be in various ways and sources 1) e.g. supervisors, direct reports, co-workers, customers. It can be also through ¡§informal discussions and surveys, aptitude tests, and performance appraisals¡¨ . ) Further they should have the questionnaires boxes set in every department which encourages and help the open speech. ) Setting up a department to specially deal with the feedback is an important step.



The reason is because TCL only uses the general manager¡¦s hotline once a week. Obviously it is not enough to solve the problem in the company in such big scale. The feedback is as a mirror to a company and it is too important to ignore. As for the general manager is always busy visiting different countries and different regions and setting up the general manager¡¦s sole hotline sounds very good but actually it is not practical. Especially in China some times the line managers can be very dominant and they will abuse their power too much which silences the employees and influence the top managers know the true feelings of the employees. There are no clear rules to monitor and discipline the line managers. This is the deterrent for the development of the company. Setting up proper feedback and monitoring system will facilitate the working relationship and create a healthy communicative atmosphere, which will improve the employee¡¦s loyalty and commitment.

Employee¡¦s improvements.

In order to sustain and improve the employees¡¦ and line managers¡¦ skill and knowledge, a Personal Development Plan (helped with a coach) will be useful. Six Items are addressed as follows

„� Development areas (What do I need to develop?)

„� Development activities (What will I do?)

„� Support (Who will help me?)

„� Progress and review (When and how will I check my progress?),

„� Application (How will my development impact my job?),

„� Measures (How do I measure my progress?)

This method will help enhance the whole employees¡¦ level and form the spirit of continuous learning, therefore it will help to improve the customer¡¦s satisfaction and reach the company¡¦s goal. If a company is to place commitment at the hearts of its people strategy then there must be a fundamental change to support, reinforce, and value these activities-with reward of managers, through the provision of training to create higher skill levels within the company, and by balancing organizational demands for delivery of the ¡§hard¡¨ financial results with the delivery of the ¡§soft¡¨ people aspects.



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