Analysis Of The Human Resource Management Business Essay

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With the accelerated pace of the global economy from the traditional economy to a knowledge-based economy, as a strategic resource the traditional financial capital has gradually been replaced by human capital; the new dynamics of global economic development of interdependence and constraints has also affected our management philosophy. With the promotion of computer network technology and the Internet, the information age has an impact on our organization management. Information is not simply to purchase a few computers, but to pay attention to the development of information resources as well as information on human resource development, and greater emphasis on the concept of the system as a whole.

1.1.2 The shock of the tendency of human resource capital

Directed towards the characteristic of the large total number of human resources but the low quality, how to effectively improve the quality and skills of workers as well as efficient allocation of human resources and preventing their loss, the theory community and the business community are in the exploration and practice. A global capitalization of human resources is a more effective measure and trends, although the practice still lacks of the corresponding basis and conditions which makes the promotion and implementation affected by some degree and obstructions. But in the view point of development, the human resources capitalization is ultimately.

1.1.3 The challenge of competency-based human resource management system

Under the knowledge economy era, an enterprise's organizational structure presents trends of networking and team-oriented; the kind of static work-based human resource management system has gradually been unable to adapt employees' versatility and flexibility, in particular, which neglect their initiative; an human resources management system of adaptation enterprise development calls begins to appear. Competency-based system is based on the competency of staff to determine the work performed; this approach itself fully embodies the management philosophy "people-oriented".

1.1.4 The challenge of the idea of vocational lifelong training

In the era of knowledge economy, people are faced with the need to constantly update their knowledge and skills in order to meet the needs of the community development, so staff lifelong training is a new concept of human resource management. This is an right impact on the past concept stage of training and seasonal training; how to change their ideas and establish lifelong training system, as much as possible to develop human potential will be that entrepreneurs need to be carefully thought problems and to reach heights in human resources management in the future period of time.

1.2 The development trends of Human Resource Management in knowledge economy Era

1.2.1 The establishment of human resources management strategy status

Today, basing on the management idea of delivering customer value maximization ask enterprises to consider problems standing on the customer perspective, and formulate the right strategies and implement firmly. Such a changing of operating environment makes those enterprises senior managers have demanded human resources management department provide additional services beyond the traditional functions, namely, changes in the roles from the enterprise as the role of an internal non-operating service providers to participate in corporate strategy formulation and assist in the implementation of the strategic business.

1.2.2 Greater emphasis on the staff of knowledge-based development and management

In the knowledge economy era, the company's core strengths depend on the advantages of human capital; the focus of human resources management is how to develop and manage knowledge workers, focusing on the potential evaluation of the staff and providing multiple forms of value distribution (Robert L. Mathis&John H. Jackson 2007). The knowledge workers create most of the value of the enterprise, while the number of proportion of enterprises may not be large. The knowledge workers, because of the existence of specific knowledge and skills, they are more focused on self-actualization, stronger autonomy at work and more loyal to their profession, In contrast, the lower of corporate loyalty, they pursuit self-realization, lifelong employability, and have a strong desire to learn and pay attention to corporate recognition of their personal values; they have a strong desire for achievement, and need challenging task, require demonstrating their knowledge.

1.2.3 The emergence of model of virtual Human Resource Management

The definition of virtual human resources of Iapak & Snell is defined as "the virtual human resource is a network structure helping to organize the acquisition, development and utilization of intellectual capital which is a partnership-based, with information technology as the carrier". In the context of virtual human resource management, the traditional method of recruitment will be gradually abandoned and the human resource management will draw support from the information technology development as well as the network popularization. Human resources information system (HRIS) enters into the company LAN, so that management and staff can directly contact with the vendor outside on the Internet, and form a virtual human resources management. Not only can complete the job, communication and other simple processing, you can complete the complex applications of self-management compensation system (John W. Jones 1998).

2. The status of Human Resource Management of traditional family business

2.1 Paternalistic and authoritarian style management

Paternalistic style management can also be called authoritarian-style management. The paternalistic style management in family business mainly refers to centralized organizational model, incentives and management practices as well as with the demonstration effect of the "parent", etc. used to complete the personnel management of enterprises (Diane Huber 2006).

In the family business, the ownership is mainly grasped and controlled by the owners and their families, and key management positions are primarily for family members; the enterprise management of group decision-making subsidiaries was mostly occupied by the family. Even though some family businesses have become a listed company issuing stock, the family is still firmly in control of a majority stake in listed companies. In particular, the decision-making in the family business operations management is generally the boss who has the final say; on the basis of sufficient information supplied by the subordinates the boss himself makes decisions and also demands absolute obedience from subordinates. Such a highly centralized decision-making mechanism in the early pioneering family business is a high-efficient, and could form a strong core of leadership and execution capabilities to adapt to the changing market and make quick response, encourage enterprises to rapid development. However, due to the rights of family businesses tend to focus too much on the hands of a family or even a parent, the family's fate hinges on a business. Especially when the size of the family business grows larger and larger and the quality of business person primarily responsible for the overall is not comprehensive, not only it is easy to cause by the decision-making mistakes, but also it lays a "crisis" for the family long-term development of enterprises.

2.2 The management model focusing on family, relationship

Most family businesses stress in the close relative use and the use of cronyism in the personnel aspect, but not in "merit-based hiring" of social talents. In the family business, the family members with blood relatives and relations are treated as one of us, but not with blood relatives and kinship ties are treated as outsiders. This corporate governance focusing on the relationship can help strengthen family ties within the family cohesion, so that members of the family for the common goal makes light of discomfort and does not count the reward diligent work.《China's private sector development report》shows that 20.9% of the private entrepreneurs are willing to let their spouses participate in corporate management, while the vast majority of bosses of private enterprises have "set aside" the succession position for their children. According to the survey, in the family business, 66% of the president and vice president come from general manager of policy matter long or relatives; other important sectors (such as procurement, finance, etc.) mostly come from the relatives and friends of the directors or general managers (Huang Mengfu 2005). Family business tries to use blood, kinship to ensure the security of enterprise funds to ensure the smooth functioning of business. All in all, family businesses rely mainly on kinship, friends, relationships and family relations management.

2.3 The personnel system of paying attention to use and underrate development

The reason why human resources in knowledge-based economy is seen as the most important resource is that only people can create knowledge, dissemination of knowledge and application of knowledge. The most effective way of human resources development is education and training. Many economists believe that intellectual capital management is the highest level of business management. However, at present most family businesses have not yet reached such a stage. There exists the "heavy use of light development" phenomenon in the family businesses, and this phenomenon mainly reflects in the training of staff on a "differentiated" situation. For the internal members of the family, especially they attach great importance to children's education and business skills development, and even do not count the input. For non-family members, they attach great importance to the use but light of training, and they are unwilling to bear the costs of investments in personnel training. The also worry that they do not attain return on investment in human resources, and lack of fully developed culture of enthusiasm. In many labor-intensive enterprises, they prefer to spend a lot of money on equipment investment, but not to increase investment in personnel training.

Writer in the Chinese Family Enterprises in Chongqing area of human resource management survey found that 51% of the surveyed enterprises did not develop training programs, 49% of the surveyed enterprises have developed a training program, but of which 71% of the enterprises is poor implementation or no implementation. The existence of such a situation will undoubtedly constraint corporate human resource capacity at the current level, once the enterprises grow greater and greater, there will lack of appropriate human resources support, and thereby it will constrain the development of enterprises.

3. The existing problems in the Human Resource Management of traditional family business

3.1 Human capital property rights are unclear

Enterprise Human Capital Property means that by virtue of their own human capital the owner gets the related rights through the game with physical capital, and the ultimate expression of this right is the right to return and part of control right(Daniel J. Gervais 2007). It consists of workers the knowledge, skills and physical and other accessories. Family members because of the special kinship, not only are unclear ownership of physical capital, the property rights of human capital are more blurred. As the family members the owner of human capital, because property rights are unclear, they do not get reflected from the family business of their human capital value gains. Mainly as follows: some family members make a contribution to the development of enterprises, but because the family's status is not high, the benefits are not many. People outside the family because they are in the "outsider" role of the family business, they may not reflect its human capital gains. This property ambiguous situation not only affects the healthy development of family business, seriously is also likely to cause family members strife, eventually leads to disintegration of family businesses.

3.2 Exclusive phenomenon of staff who are responsible for recruiting highlights

Family business model of the human resources is not conducive to absorb more human capital value. As the recruitment of relatively narrow scope, when family businesses need people, the first thought is to use internal staff or the staff who are introduced by family and friends. However, internal staff of the family and the staff introduced may not necessarily fully understand the business expertise and the corresponding management capacity (Ernesto J.Poza 2004). In addition, the family business the method of recruiters is relatively simple. They are only generally with general understanding of resume and do not to conduct a comprehensive evaluation Jibei employed, so that people and things there do not match, eventually leading to the recruitment of staff to the endless a considerate person. When people in the appointment is often only from the trust and the interests of the shallow point of view, so that external staff can not melt well in the enterprise, their capabilities can not be fully realized.

3.3 Incentive mechanism is not sound

An effective incentive mechanism could stimulate the potential of employees. However, in family enterprises, between employees and enterprises is essentially a relationship between employments and be employed, business owners is very simple understanding of the incentives that motivate is to "reward and punishment." From the theoretical analysis, when the employee reaches a certain amount of money income after the incentives do not always able to play its expected role. At the same time, the family management of the enterprise, due to the special relationships within the pattern, making the "insiders" and "outsider" divide clearly between the lack of a sense of intimacy and trust, outsiders lack of a sense of security for enterprises, ownership of sense(Suzanne Scotchmer 2004). In particular, some family businesses are still cherished the "not-family groups, whose heart must also think differently," the idea that they may not be reliable. This concept would not only undermine the unity of enterprise, but also the positive impact of non-family employees, reduce staff of the business sense of togetherness. Therefore, the family business a high-level employees need to be respected, as well as the need for self-realization is difficult work to achieve a result, they lack a certain degree of spiritual motivation.

3.4The weak sense of Human Resource Management

Many family businesses the weak concept of human resource management, resulting in family businesses humanistic concern for employees is not enough to make the development of family businesses lack a strong human resource support. Family businesses and equity capital primarily in the hands of a family, the heart of business leadership by the same family, membership in business operations primarily through blood or friendship ties maintained, although in this way can enhance the sense of collaboration among members of lower management Because information asymmetry and monitoring costs paid. However, weak internal organizational structure, management, talent and technology-based shortage, which is present, many family business can not be achieved sustained development and growth of the main reasons for (Mick Marchington & Adrian Wilkinson 2005).

Especially in human resource development, training in such areas as family businesses reluctant to invest in their own culture, unwilling to bear the cost of investment in human resources and human resources investment risks, always wanted to stand to other business people digging foot of a wall; or wait until the vacancies affect the normal operation of the recruitment to the outside world until a hurry, because when asked to rush, it is difficult to ensure the quality of recruits.

3.5 Human resources system construction is not standardized

Family enterprise human resources system construction is not standardized, mainly leaders in the family decision-making arbitrary large, and the normative and the operability is not strong. In a market economy, family businesses or pan-family enterprises more autonomy and flexibility of large, sensitive to market signals reflecting the decision-making fast, you can speed up the adjustment direction of operations and production (Jean Lee & Hong Li 2008). However, in the human resources system construction and implementation, but showed a lot of irregularities in the office.

4 The countermeasures of Human Resource Management innovation of traditional family business in knowledge economy Era

4.1 Establish a people-oriented human resource management concept

If family businesses conduct human resource management innovation, we must first establish a people-oriented management philosophy to improve the management of people from a simple stage to strategic human resource management level, as well as change the errors of personnel and human resources' management understanding, in fact, they have so many differences (Jon Clark 2004).

Table 1: the main differences

Table 1 the differences between personnel management and human resources management

Personnel Management

Human Resources Management

Management centre



Management focus

To establish compliance

To establish loyalty

The goal In order to achieve

Mainly organizational goals

Both organizational goals and personal goals

Control Point

External part

Internal part

Talent ideas

Static state

Dynamic state

Constraints a principled way

Using Centralized top-down approach

Bottom-up democratic ways


Mainly based on economic incentives

Assist in the planning and realization of their staff's personal goal post standard

The importance attached investment in people

Do not pay attention to it,

considered it as a cost

To a strategic height, considered it as a capital investment

Management results

The pursuit of cost minimization and standardization of performance

The pursuit of continuous improvement of performance and the creation of adaptable \ innovative large staff

Also we must correct a static concept of talent, not make everything from the "tube" on the start, and introduce and cultivate talent unable to be seasonal needs, but should be a long-term perspective. To be a dynamic look at talent, we cannot take establishing a department or finding a few people into doing the grading plan and salary that is the talent management. For talent management should be standardized, there must be continuity. Do not just see the current but neglect of long-term investment returns, we must have long-term and strategic vision for company grow.

Modern human resource management is based on the concept of competency-based. Human resources management is to turn human potential capacity into actual job performance. With the rapid development of science and technology, Human resources management through use technology and disciplines of other subjects, it can use quantitative targets to identify and measure human capacity. After all, the people management is different with machine, because the machine is a constant capacity but people are not. Ability of human potential is hardly to be shown with targets, and effectively transform the ability into productive forces must rely on an effective incentive. Is only aware of these, can we truly forming ability-oriented concept.

4.2 Establish scientific and standardized human resources management system

Family businesses must establish awareness of rules, establish and improve human resources management system, including recruitment hiring, training, development, pay and benefits, performance management, employee relations, and so on. First, we must introduce human resource management system, establish a professional, scientific and efficient human resource management sectors; and re-establish the company's organizational structure, establish a clear powers and responsibilities, mutual supervision and constraints, effective communication, a high degree of coordination mechanisms within the enterprise, different departments exercise different important officers functions, as well as clarify objects, powers and duties of the positions to promote the various functional departments and manager to correctly exercise their powers in their own areas .Second, procedural recruitment can maintain human resource requirements be dynamic stability, in order to maintain and guarantee the survival and development of enterprises, which enable staff do appropriate competency and gain satisfaction from work, reducing turnover and improve staff's stability. Third, establish an objective and fair performance appraisal system and these results will be applied to human resource planning, recruitment, remuneration, promotion, deployment, dismissal and so on, which will help companies make the right human resource management decision-making; besides, applying the results to human resources development can provide information on employee strengths and weaknesses to help staff in existing posts to create a better performance, also enhance staff targeted training and make staff career planning advice. Fourth, establish a rational pay system, make the pay and employee performance well together. The fifth is to establish employee training system to help staff carry out career planning.

4.3 Establish a scientific and fair employment mechanism

The innovation of family enterprise human resource management must establish a scientific and fair employment mechanism to widely attract external human capital.

First is necessary to improve the introduction system of human resources, according to professionals needs of enterprise development in different fields, recruit qualified personnel in market-oriented recruitment;

The second is to improve the performance appraisal system, and establish impartial selection mechanism for all employees have equal opportunities for development. The difficulty here is how to make proper arrangements for those family members and business veterans who are not qualified for the core job responsibilities. One approach is to clarify property rights within the family, so family members can receive benefits by virtue of their ownership stake and minimize their competition for business in important positions; method two is to make entrepreneurial veterans those cannot suit to the new competitive situation to have supervisory work, giving them a higher treatment;

The third is to arrange inefficient young family members to pursue advanced studies, or go to other companies work to improve the personal qualities and practical ability;

Fourthly, for those with strong capacity and entrepreneurial impulse, but the companies cannot possibly provide their positions, the company can give them a separate sum of money to make their own investment and operation.

4.4 Improve the incentive pay

Motivation is a complex science-intensive work, family enterprises have to combine actual of the businesses to implement scientific and rational incentives. Available from family members, non-family members, business in three areas to improve and optimize the human resources incentives mechanism of family business, in order to stimulate employees' greatest potential, improve employee motivation, maximize the benefits of enterprises so that enterprises can stand in the market with brutal competition always.

For family members, through construct a reasonable intergenerational transmission mechanism, exit mechanism and performance evaluation mechanisms to inspirit family members, also maximize the advantages of family members in the family business (Alnoor Bhimani 2006). A constructional of scientific and rational intergenerational transmission mechanism not only has played a decisive role the family business' stability and sustainable development, but also improve the family members' work enthusiasm, inspired motivation of business owners, directors, related interest groups, and non-family members' work enthusiasm; scientific and reasonable exit mechanism, so that family members in accordance with their capabilities and expertise are fit on the appropriate location at the right time, being an appropriate manner, which can prevent family from triggering because of wrong members flow, and also prevent business decisions are not adverse effects; scientific and reasonable performance evaluation mechanism to be able to adhere to the principles of fairness and justice, and thus stimulate the motivation and momentum of employees.

For the non-family members, through construct a reasonable authorization mechanism, stock options mechanism in two aspects to inspirit or non-family members, in order to enhance the non-family members a sense of belonging and ownership status of enterprises, and improve their working enthusiasm and passion to help family enterprise development and growth (Craig E. Aronoff & John L. Ward 2000). Implementing authorization within mechanisms family enterprise appropriately to grant certain powers under the employee, which can reduce the work pressure of business owners and improve decision-making efficiency of business owners, as well as fully mobilize employees. Equity incentive mainly aimed at business management is conducive to the interests of managers and shareholders, the convergence of long-term incentives; it will help to improve employee sense of ownership, enhance their sense of belonging and conducive to attracting talent, stable workforce and enhance the competitiveness of enterprises.

Corporate culture has a guiding function, normative function, unifying function and encouraging function. Excellent corporate culture that inspires employees' enthusiasm to form a kind of spirit inspired, vibrant, pioneering atmosphere, nurturing staff 's identity and tie their selves to the fate of cooperates, play incentives force unmatched by other management, resulting in extraordinary incentive efficiency (Peter Sedguick 1992). Inside, corporate culture can infect staff, improve staff's enthusiasm and passion; outside, companies can establish a good social image and create business opportunities for enterprises.

4.5 Do a good job of strategic human resources management

Strategic Human Resource Management regards human resources as the primary resource to gain a competitive advantage which emphasizes the human resources planning and management practices. Do as that, it can achieve corporate strategic objectives and form the core competitiveness (Paul Kearns 2003). First, according to enterprise's development strategy and the status of human resources, scientifically predict enterprise future supply and demand trends of the human resources to develop long-term human resource planning, in order to achieve the forward-looking human resources management; second is to improve and implement staff training system, strengthen the overall quality of employees, business knowledge and job skills training, particularly to strengthen the senior manager staffs' training, staff training to achieve the institutionalization of efforts to create learning-oriented enterprises; third is to help employees to develop and implement career planning, make the enterprise's development strategy and employee self-actualization together; fourth is to strengthen the building of enterprise culture to form a relationship based on kinship among family members of the loyalty, trust, cooperation, dedication, extend to all employees, emphasize fairness and openness in rule-making , people who are used reasonably, fair distribution of income and job security guarantees, interjecting corporate culture into the daily management activities of enterprises to construct a harmonious labor relationships.

4.6 Give fully plays to the government and the community role, improving the institutional environment

First, play the role of government. Government in promoting institutional innovation to make up for market failures and improve human capital making for family businesses play a role in the institutional environment have be important role. First, government departments should be fully aware of the private family business professionals working has being the great important position in the whole of human resources work in the society, and attach the importance human capital constraint factors in the process of human resources development research. Second, the government should be through the provision of efficient public services for providing a relaxed environment for enterprise human resources development. To private family business is concerned, they often do not dream of the Government to give special care, just want to get a fair "national treatment." The Government should not only get relaxation in the external environment to the enterprise personnel policy but also should be further personnel exchanges at the market, providing companies the necessary human resources information services, creating loose conditions conducive to the development of private family business for the growth of talent. Government departments should establish and improve relevant laws, regulations and systems so as to provide a good legal environment for the development of private family business.

Second, break through human capital constraints of the family businesses by virtue of the advantages of community organizations. Industry associations, chambers of commerce and other industries community organizations in the enterprise human resources management play an important role. Industrial society organizations can use their social network advantage, professionalism and reciprocity norms to provide professional services to enterprises and personnel information services, using its self-regulatory mechanisms and trust mechanisms to facilitate the establishment and improvement of professional managers market, professional labor market. Contact the authorities and league fully by virtue of community organizations and industry as a bridge for enterprise connect to the external labor market. Play the role of community organizations to enhance corporate human capital value, through the creation of relevant training institutions to provide professional services to effectively improve the quality of corporate human resources. Play the role of community organizations to resolve the problem about lacking of human resources and account for the difficult problem about employee's children nursery school and other issues, while providing other housekeeping services, achieve the harmonious development of communities and businesses.

Third, accelerate institutional development, promoting institutional innovation and inter-generational turn smoothly. In order to fundamentally improve the management of enterprise human resources, enterprises also need to resolve the internal ownership, organization structure, which is required to the sustainable development of family business, but also is needed to transform a modern enterprise and achieve a smooth transmission of intergenerational imperative. First of all, entrepreneurs who do not belong the family and investors, as well as core staffs that have some special contribution to company development have enterprise property by clearing company property and achieving diversification of company property, so that family business ultimately lay the foundation for the establishment of joint-stock public company. Secondly, although financial capital can bring benefits for enterprise, the senior management staff of company must see that the core human capital is a more proactive capital to company, financial capital can be preserved and increased the value by them. Family business recognizes the human capital that is a crucial step to creating modern enterprise system, and is underlying institutional basis to maintain the sustainable development of the private family business. Finally, the Government and social organizations should speed up the building of professional managers though creating advantage conditions. In order to build a excellent Professional manager team, on the one hand, the family business must overcome "family culture" concept; on the other hand, the family business also need to prevent "adverse selection" and the "moral hazard" in condition of the information asymmetry (Wen Li 2002)

5 Conclusions

With the advent of knowledge economy era, the main factors of the socio-economic patterns have been a fundamental change. Economic development has less dependence on labor, capital resources; however, knowledge has played an increasingly prominent role which instead of capital and resources to become the leading role in the production. The external environment and internal management of business organizations have being also changed silently. The status of physical capital in the enterprise decline compared to human capital, the business management is from physical management as the core of the production into knowledge management as the core of human management. Family businesses are also facing a huge new opportunities for development. Meanwhile, with the economic openness, they are facing rapidly increased competition.

On the family business itself, owners should improve the quality, jump out of the family circle, and see it as an enterprise to run, subordinate the interests of the family to business interests. In human resources development and management, try the best to get rid of the negative effects of traditional "family culture", use the modern science and human resource development and management methods, to be sure family members and outsiders have equal treatment.

In addition, the government should create an institutional environment of family business for human resources development. Specifically, the following aspects can be carried out: first, pay close attention to the construction of professional managers and stock markets; secondly, improve the laws and regulations which are related to; thirdly, oversee the establishment of independent, neutral and impartial intermediaries.