Gu, Fan
(2013)
A comparative study of rerformance appraisal system in three banks in contemporary China: the role of guanxi in appraisals.
PhD thesis, London School of Economics and Political Science.
Abstract
Performance appraisal is one of the most popular and widely studied areas in human
resource management, industrial relations and organizational psychology. However,
most research in this area has been conducted in the USA or UK and reflects a
Western context. Some studies on performance appraisal in Chinese organizations
have been carried out, but, in the main, these concentrated on the periods of command
economy (1949-1984) and transitional economy (1985-1997). In recent years, more
and more Chinese state-owned companies and private companies have started to
reform their performance appraisal system, by adopting Western style performance
appraisal systems. However, there has to date been no academic research on
performance appraisal system in Chinese companies with different types of ownership
in a market context.
The Chinese cultural factor “guanxi” has been found to be one of the most important
cultural factors which influences performance appraisal in Chinese organizations.
Nonetheless, no study has clearly analysed how guanxi influences performance
appraisal in Chinese companies, leaving a significant research gap in our
understanding of the impact of guanxi on appraisal and its outcomes. Therefore, this
thesis conducted in-depth case studies, consisting of both quantitative (employee
survey) and qualitative research (interviews) methodology, on the performance
appraisal system in three banks with different ownerships in China, exploring a range
of research objectives drawing on performance appraisal theories, justice theories, and
guanxi and guanxi practices theories.
Based on the results of the pilot study, a scale, which includes two factors “guanxi’s
impact on outcome” and “guanxi’s impact on communication”, was developed to
measure the impact of guanxi on performance appraisal in Chinese organizations.
The statistical analysis of the employee survey indicated that guanxi’s impact on
appraisal outcome was negatively related to employees’ perceptions of distributive
justice, procedural justice, satisfaction with performance ratings and trust in
supervisors; while no significant relationship has been found in this study between
guanxi’s impact on communication and employees’ attitudes and behaviour.
According to the comparative study of the appraisal system in the state-owned bank,
foreign bank and city bank, significant differences of employees’ reactions to guanxi
in appraisal, appraisal fairness and appraisal itself were found among these three
banks. The employees in state-owned banks perceive less fairness and satisfaction
with appraisal, but greater and stronger guanxi impact on appraisal, compared to
employees in the foreign and city banks.
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