Postacquisition evolution of the appraisal and reward systems: A study of Chinese IT firms acquired by US firms

Fang Cooke, Kun Huang

Research output: Contribution to journalArticleResearchpeer-review

31 Citations (Scopus)

Abstract

This study investigates changes and continuity in the performance appraisal and reward systems of four Chinese IT firms after they were acquired by US-owned multinational corporations. Drawing on different perspectives, it examines changes in the appraisal and reward systems of the acquired units and the extent to which they may be influenced by the interplay of business strategy, organizational structure, resource-based power of the acquiring and acquired partners, management competence, labor market factors, and the cultural norms of China. The study reveals that the guiding principle of performance management and reward policy of the acquired firms have experienced changes. However, the structure of compensation remains largely unchanged. There is a high level of resistance from the Chinese managers to adopt more sophisticated performance appraisal techniques and to widen the wage band to differentiate employees performance. The foreign acquirers have taken a cautious and pragmatic approach to implement changes. As a result, the relatively slow speed of change and limited substantive changes in the performance and reward practices make it impossible to achieve a full strategic alignment of human resource practices at the corporate-level post-acquisition.
Original languageEnglish
Pages (from-to)839 - 858
Number of pages20
JournalHuman Resource Management
Volume50
Issue number6
DOIs
Publication statusPublished - 2011

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