The changing role of HRM in transitional economies: evidence from China

China's progressive integration into the global economy has strengthened its position as a 'magnet' for foreign direct investment. The inevitably increased competition in the Chinese economy has led firms to adopt more market-oriented approaches to human resource management (HRM). Based on a survey conducted in 2005 of 813 respondents (mainly HR personnel) in industrial firms in China, this paper examines the impact of vertical integration of the human resource function, measured by the strategic integration and devolvement of HRM practices, on the performance of industrial firms in China. The results of this preliminary research found some evidence for a positive relationship between the degree of strategic integration of HRM with business strategies and firm performance. Although more analyses need to be conducted on the data collected by this study, our findings provide some signals that the HR function is emerging as a strategic player in Chinese enterprises.

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