ation and attempted to track back to the HR
decisions (or lack of them) associated with these
outcomes.
Background to the case study
Since the early 1980s China has been evolving
into a ‘socialist market economy’ involving several
aspects of reform. Financial reform had introduced
a revenue sharing arrangement between the central
and the local government to promote tax mobilisation efforts of the local government to speed up the
local economy development. Institutional reforms
were carried out in the public sector. Decisionmaking power in the production of goods and
services, which was previously in government
hands, has been devolved to individual enterprises
and institutions. Government funding to public
institutions was reduced somewhat and they have
had to generate revenues via service fees to cover
their operational costs. The reforms have also
provided managers of enterprises and public institutions with increased managerial autonomy and
freedom to use their profits to pay for investments,
salary and bonuses, and welfare and housing
benefits for their employees. The reforms have
brought in two kinds of decentralisation policy that
have affected the Chinese health system (Tang,
1998), though these have not been implemented
uniformly throughout China.
Delegation of health service to increase autonomy of
health institutions
Prior to 1980s the government health services
were organised as a centrally planned bureaucracy. The Ministry of Health (MoH) at national
level formulated policies and established targets
and the lower level had to meet these targets.
Each level of government (centre, province, county
and township) had to approve the plans of the
levels below it (Bloom & Xingyuan, 1997). In 1985
a national policy to increase in the autonomy
of health institutions was introduced using
what was called the ‘director responsibility system’
(Yuan Zhang Fu Ze Zhi). Hospital directors
were given the power to recruit health staff
according to hospital needs, and to reward, punish
and even dismiss health staff based on their
performance.
ation and attempted to track back to the HR
decisions (or lack of them) associated with these
outcomes.
Background to the case study
Since the early 1980s China has been evolving
into a ‘socialist market economy’ involving several
aspects of reform. Financial reform had introduced
a revenue sharing arrangement between the central
and the local government to promote tax mobilisation efforts of the local government to speed up the
local economy development. Institutional reforms
were carried out in the public sector. Decisionmaking power in the production of goods and
services, which was previously in government
hands, has been devolved to individual enterprises
and institutions. Government funding to public
institutions was reduced somewhat and they have
had to generate revenues via service fees to cover
their operational costs. The reforms have also
provided managers of enterprises and public institutions with increased managerial autonomy and
freedom to use their profits to pay for investments,
salary and bonuses, and welfare and housing
benefits for their employees. The reforms have
brought in two kinds of decentralisation policy that
have affected the Chinese health system (Tang,
1998), though these have not been implemented
uniformly throughout China.
Delegation of health service to increase autonomy of
health institutions
Prior to 1980s the government health services
were organised as a centrally planned bureaucracy. The Ministry of Health (MoH) at national
level formulated policies and established targets
and the lower level had to meet these targets.
Each level of government (centre, province, county
and township) had to approve the plans of the
levels below it (Bloom & Xingyuan, 1997). In 1985
a national policy to increase in the autonomy
of health institutions was introduced using
what was called the ‘director responsibility system’
(Yuan Zhang Fu Ze Zhi). Hospital directors
were given the power to recruit health staff
according to hospital needs, and to reward, punish
and even dismiss health staff based on their
performance.
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