1. Introduction
1.1Research background
In recent years, with the opening of the market economy process, Chinese enterpriseshave made great progress in making excellent and stronger strategy, especially intransformation and innovation, optimizing structural adjustment is achievedremarkable results. Although the pace of growth rate has slowed since 2014, however,the scale and efficiency remain stable. But behind this development, on the one handis Alibaba, Huawei, Jingdong, Tencent, and Baidu as the representative of the newgeneration of private enterprises which strongly grow up, and on the other hand suchas distribution, manufacturing, communications and other areas of traditionalstate-owned enterprises are declining.
The development of enterprises, the improvement of competitiveness, theconsolidation of market position, talent is the key. Talent is the inexhaustible powersource of enterprise innovation and development. Whether Alibaba, Huawei orTencent, which behind its brilliant development, largely benefited from talent, toattract talent, retain talent, so that talent can maximize their effectiveness. However,compared to China's traditional state-owned enterprises, especially small andmedium-sized one, it appears to be weak in innovation and transformation. Theformer "iron bowl" halo gradually decline, and the lack of competitive incentives,resulting in a large number of brain drain, that makes the traditional small andmedium-sized state-owned enterprises worse.
This paper mainly base on the theory of "human capital" and "incentive theory" ofinternal labor market theory, and analyses the problems that existed in the internallabor resource management of G Company. And then based on salary incentive,internal promotion and stable labor relationship those three aspects propose furtheroptimization strategy.
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1.2Research significance
1.2.1 Theoretical significance
Traditional labor economics tend to pay more attention and emphasize therelationship between supply and demand of external labor market, but to a certainextent, ignores the internal labor market in the role of human resources allocation,however the internal labor market theory is precisely provides a new perspective forthe labor market, they’re not only limited to the external macro market, but focusedon the micro-market within the enterprise. To some certain extent, we can say internallabor market theory make up the gaps in labor economics. Compared to the externallabor market, the internal labor market has a different operating characteristics andadvantages, and they emphasis on long-term labor contracts, internal promotion, andremuneration and so on. Generally speaking, the internal labor market originated inthe United States, but matured in Japan’s large enterprises after World War II, sinceit’s the most significant features in Japanese business management, the internal labormarket played a very important role in Japan's rapid economic development. Thestudy of the internal labor market will help to further absorb the experience ofadvanced management, and provide an important theoretical reference in traditionalstate-owned enterprise reform.
1.2.2 Practical significance
Internal labor market theory emphasize the allocation of internal labor resource,which provides a newly theoretical framework and analytical ideas to solve theproblems of unemployment, labor shortage and insufficient human capital investment,while it is difficult for traditional supply and demand theory. Internal labor markettheory has the three distinct features which are long-term employment, internalpromotion and payment post. It is proved that long-term employment is an effectiveincentive for human capital, it can not only reduce the turnover rate for the company.
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2. Literature Review
2.1 Definition of related concepts
2.1.1 External labor market and internal labor market
The "external labor market" and "internal labor market" are two relative concepts. Theexternal labor market usually refers to the market-oriented, marketed by the market toallocate labor resources market, the core is the use of market regulation mechanism toadjust the supply and demand of labor resources to promote the rational flow of laborto achieve the effective allocation of labor resources.The Internal Labor Market Theory (ILMT) refers to the labor mark
within the enterprise. It is the sum of various labor contracts and employmentarrangements within the enterprise, which is formed between employers andemployees in the enterprise a stable, long-term employment contract-based laboremployment relationship. The concept of the internal labor market was first proposedby Kell (1954) and Dunlophe (1957), and was fully discussed by Doeringer and M. J.Piore (1971). Derek and Pierre's definition of the internal labor market is: "Amanagement unit, such as a factory, within this unit, labor price and distribution isdetermined by a series of management rules and procedures, it is with the traditionaleconomic theory, The price, distribution and training are directly determined byeconomic variables in the external labor market of traditional economic theory(Doeringer and M. J. Piore, 1971) "in the external labor market.
As we can see here, the internal labor market and external labor markets both haveclear distinction and connection. First, the external labor market is usually based onprice or economic leverage to configure labor resources, and the internal labor marketis mainly to management and practice as a means of regulation; Second, the externallabor market supply and demand by economic fluctuations and other factors oftenoccur Changes in the employment relationship formed by the short-term, and theinternal labor market there is the long-term employment and stability, enterprises areoften through tacit understanding and commitment to maintain the stability of theemployment relationship; In addition, the external labor market wage in theshort-term labor supply and demand balance, therefore, the wage rate is equal to themarginal productivity of workers, and the internal labor market wages are notconcerned about the short-term marginal productivity of labor, but with the long-termperformance of employees or long-term marginal productivity linked to employment.
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2.2 A Summary of Foreign Studies
Flickinger, Miriam (2013)said that internal labor market theory is a win-win strategyfor the companies. According to the research we find that the contribution betweenlong term relationship employees and non-stable employment staff are quite different,the former are getting job satisfaction, while the later are unable to obtain this jobsatisfaction, therefore they cannot make an equal contribution to the results of theenterprises.
Morishima(1995) stated that one of the most striking features of Japanese white-collaremployment is long-term employment.
Groshen(1994) Study from the wage policy change internal and external labor market.The study used the detailed salary data of 228 large enterprises in the United Statesfrom 1955 to 1995 for 40 years, and tested the size and duration of the change of thetwo kinds of policies. The results show that the internal labor market is still of greatimportance to large enterprises, even if some enterprises are affected by a largenumber of imports, the internal labor market has not been systematically weakened.
Yangheqing(2002) who examines the importance of the internal labor market tohuman resource management practices, which include the impact of the internal labormarket on corporate culture, employment habits, and social culture. Studies the rulesof job management, salary management, training management and labor relations inthe internal labor market, and points out that the internal labor market is only differentin the enterprises, and it is necessary to establish a better efficiency internal labormarket model and human resource system.
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3. Case description.................. 15
3.1Background Introduction ................ 15
3.2 The Current Situation of Human Resource Management in G Company.............. 16
4.Case Analysis .................. 21
4.1 Questionnaire analysis............. 21
4.2 Analysis of G Company’s compensation Mechanism................. 22
5. Optimization strategy ......................... 42
5.1 Improving the internal recruitment mechanism ............ 43
5.2 Advocating Competition...................... 45
5. Optimization strategy
5.1 Improving the internal recruitment mechanism
Which is corresponding with single promotion channel. Transaction cost theorypersists it is necessary to implement internal promotion to prevent the occurrence ofinpidual wage negotiations and the corresponding opportunistic behaviour. So fromtransaction cost theory point of view, if we want to save transaction cost and increasethe competitive of the company, internal promotion will be an ideal choice for them.Internal recruitment is one of the means of internal promotion, but different from theinternal promotion, which more emphasize a real-time, dynamic incentives, but alsoan important manifestation of the characteristics of the internal labor market. Internalrecruitment is aimed at strengthening the internal relations between enterprises andemployees. Zhang Nina (2006) who found that through the application in the internalrecruitment, which can play an important role in inspiration and guidance, which arecontributed to the common development of employees and enterprises. In general, thevacancies for internal positions can be either through the configuration of externallabor market, can also be selected through the enterprise internal promotion, so thatthey can choose the right people in the right position to play the greatest effect. Interms of enterprises, should be based on internal recruitment, supplemented byexternal recruitment, dig deep inside the excellent, the right labor resources andsuitable labor resources, giving full play to the incentive of internal recruitment, andfurther mobilize the enthusiasm of staff. In the enterprise within the premise of asuitable candidate, the internal recruitment relative to the external recruitment has anunparalleled advantage.
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6. Conclusion and prospection
6. 1 Conclusion
As Yang WeiJun(2003)said:The internal labor market has an important role in theinternal incentive. As the case of continuous loss of talent, it of great significance toestablish and improve the internal labor market for the reform and development ofstate-owned enterprises in the current situation. This paper mainly focuses on theanalysis of G Company's personnel turnover, which mainly focuses on the threeaspects: internal promotion, business stability and remuneration, which are consistentwith the three basic characteristics of the internal labor market (internal promotion,long-term labor Contract, salary post). According to the questionnaire, the directcause is due to lower remuneration, but after in-depth analysis, G company's salaryand job grade is closely linked together, and only through the promotion, improve thejob grade, it is possible to effectively improve the level of remuneration; Thepromotion of job grade is closely related to the stability of the business. If the projectitself is unstable, the project cycle will be shorter than others that will makeemployees cannot wholeheartedly concentration themselves into the works. The resultis internal promotion, improvement of job grade payment are even more out of thequestion. In other words, business stability is an important guarantee for jobpromotion and the improvement of remuneration. The brain drain for customerservice representatives in G Company is not caused by one single source, it is themutual interaction of salary, promotion and stability. If we only focus on one of them,and cannot fundamentally solve the existing problems that G company is facing, butwe should regard promotion, salary and stability as a whole, mainly concentrate onthe internal labor market itself, based on the questionnaire survey results and internallabor Market resource allocation, in-depth analysis of G company's existing problems,as well as the causes of the problem, and targeted to comments and suggestions.
reference(omitted)
关于 G 公司内部劳动力市场的工商管理优化研究
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