A Study Of Human Resource Management Outsourcing In Corporation

With the development of information industry, knowledge-based economy and economic globalization, great changes have taken place in the patterns of operation and management in corporation since the 1990s. The sustainable, rapid development of the outsourcing industry, in a time of global disequilibrium of economic development, has drawn wide attention not only from the business circle, but also from various researchers. Human Resource Management Outsourcing (HRO), as a fast-developing field in the outsourcing industry, China is one of the most developed area in Outsourcing.Corporation of differing types differ in their motivation and purpose of HRO. Even within the same corporation, its purposes vary in its choice of outsourcing of various Human Resource Management functions. Up till now quite a number of theories have been put forward to analyze and interpret Business Process Outsourcing (BPO), such as the theory of Social Division of Labor, Trade Cost Theory, Comparative Advantage Theory, Wooden Barrel Theory, Resources Superiority Theory, Supply Chain Theory, and Strategic Management Theory. These theories may explain, to a greater or lesser extent, the HRO phenomenon, but are constrained, each in its own way, in that every theory, whichever it is, may analyze and explain the phenomenon only from a certain perspective, and that the explanatory power of these theories varies with market environment. So far none of the theories may fully explain the HRO phenomenon and its development from a holistic viewpoint; for an overall and complete view of the phenomenon, various theories are needed to analyze it from various angles.The motivation for HRO comes from both within and outside of a corporation. The major external driving force is global economic integration, while the internal one is the need to improve the core competitive power of the corporation. Meanwhile, the trade cost is lowered to a certain degree with the standardization of human resources management activities and the development of information technology, both of which serve as the technological force for its development.HRO, as an innovation in the internal management pattern, inevitably exerts some influence over the operation and management of the corporation, which may be seen in two aspects: corporate performance and internal management. Human resources management influences the corporation through influencing the management efficiency, thus improving its corporate performance. The influence of human resources management over corporate performance (non-financial performance) is direct and distinct, whereas that over financial performance is indirect and, more often than not, not so distinct. Similarly, HRO differs in its influence over financial and non-financial performance. That is, HRO influences non-financial performance distinctly but financial performance not as distinctly. The influence over the former is chiefly seen in the changes in management efficiency, and that over the latter chiefly in the changes in management cost and efficiency.Human resources management has important influence over the internal management of a corporation, especially in the management of human resources departments. As some business-like management tasks are fulfilled by HRO, the internal human resources management turns gradually from business-like management to strategic management. At the same time, the decrease in business volume reduces the demand for professional human resources management personnel, whose way out is one of the problems the corporation has to solve. In accordance with the development of external market and the changes in the need for internal management, the present dissertation has attempted a model to find a way out for those professionals.The decision making in HRO is a prerequisite for its successful implementation. The decisions chiefly concern outsourcing object selection and application service provider (ASP) selection. The selection of an outsourcing object need to take into consideration two major factors: the motivation and need for HRO, and should observe such principles as improving competitive power, reducing cost, raising management efficiency, reducing risks, etc. The selection of an ASP usually requires the use of AHP, which is a multi-level analytic model that integrates both qualitative and quantitative analysis. As to the question of how to turn from qualitative to quantitative analysis, i.e. how to turn the language of the decision-maker into statistics, AHP is not very scientific or accurate. However, the Fuzzy AHP may be an obvious improvement in this respect for it is a semi-qualitative analytical method which, when used in the selection of an outsourcing object from many candidates, will be more scientific and ensure lower rates in wrong decisions.In the past few years, HRO has been developing very rapidly in China, but in a way widely different from foreign countries in terms of status quo and development models. Even in the same area HRO in foreign-funded Corporation, especially multi-national companies, differs greatly from that in state-owned or private Corporation. To have a clear understanding of the differences, questionnaires were distributed and interviews conducted in Corporation in such relatively developed coastal regions as Shanghai, Jiangsu, Zhejiang, Fujian and Guangdong. This thesis makes a comparative analysis of the statistics obtained from questionnaire survey with the statistics of HRO survey by American Human Resource Management Association as well as statistics of HRO survey by Chinese Human Resource Outsourcing net.. Through the comparative studies, we have revealed that, compared with other developed nations, China is significantly different in many respects. China will have a good future in of HRO,but the way of HRO development maybe different from Western nation's.