and unproductive. Can Chinese SOE's (state-owned enterprises) survive the challenges as well? There are many issues in SOE’s that need to be addressed, however, this paper just concentrates on the reform of human resources management , pointing out the interrelationship between HRM practice and enterprise performance. The effective reform of the state-owned companies is put on agenda. Understanding the Culture: Culture might be described as the comple pattern of living that humans develop and pass on from one generation to the next. It encompasses the norms and values of a society, including appropriate ways to treat one another. It defines the natural world and human nature. II) What is HRM and why is it proposed?What is needed here now is to define HRM (Table 1) which has theoretically been an issue for some time. Why should HRM attract so much attention? How could firms benefit from practicing HRM? HRM is a modern term for what has traditionally been referred to as personnel management or personnel administration. It goes beyond personnel management which emphasizes on technical skills and day-today function such as recruitment and selection, training, salary administration and employee relations. According to Price (1997), there are a half of dozen of definitions of HRM (see Table 1) , but the essence of HRM is as simple as to “get work done” through strategic selection of suitable staff, training and development of competent and skilled workers, provision of incentive reward systems to retain employees and overall flow of management communication, performance appraisal to increase level of transparency and plus harmonious industrial relations to reduce conflicts and achieve cost effectiveness.HRM attracts much attention because it has been portrayed as being a radical, integrated and consistent approach to tie people management to business objective . It takes a more proactive view by look...
