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Abstract

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

This article contrasts the flexibility of Chinese and Indian urban hospitals and the security of nurses. The study draws on a survey of 55 urban hospitals, and finds that national context generates different flexibility–security outcomes even when workers with similar skills are considered. Our findings support claims that China is constructing a flexibility–security regime that aims to promote both security and flexibility, and that India remains attached to employer-based social protection, but challenges the claim that economic growth is higher in China because India's employers have relatively less capacity to utilize labour-time as they wish.

Introduction

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

The enterprise flexibility and employee security literature has debated whether it is possible to reconcile employers' wish for enhanced labour flexibility and workers' desire for security by having the state underpin enterprise flexibility with a robust social security and retraining regime (Vandenberg 2010; Wilthagen and Tros 2004). Much of this literature argues that finely tuned, such state and enterprise policies and strategies can concomitantly enhance both organizational flexibility and employee security. Some scholars charge, however, that these arguments are vulnerable because they accord inadequate attention to how the flexibility–security relationship varies across occupations, workplaces and regions (Burroni and Keune 2011). This article responds to this observation by examining the numerical flexibility of hospitals and the economic security of hospital nurses in China and India. Numerical flexibility refers to an organization's capacity to adjust labour utilization in line with fluctuations and changes in product demand, and economic security relates to the capacity of workers to sell their labour-time in an environment in which basic income and representation security are assured and wherein other forms of work-related security are improving. In brief, we determine if the flexibility–security experiences of Chinese and Indian nurses differ in significant ways, and thus shed light on the extent to which these regimes reconcile the interests of employers and workers.

We examine and contrast the situation in China and India for three reasons. First, we do so because these nations have different approaches to the flexibility–security nexus; second, because Chinese and Indian nurses share similar skills and undertake similar tasks; third, because Indian employers and scholars allege that a key reason China has higher economic growth than India is because Chinese employers have greater freedom to arrange employment relations as they wish. We find that although nurses in our case countries have similar skills and work in like environments, their flexibility–security mix differs markedly. This suggests that skills and workplaces may be a secondary magnitude influence relative to institutional factors, such as custom and practice, the ideological orientation of the populace and state, and government administrative capacity. The article also supports Vandenberg's (2010) claim that China's state is constructing a regime that underpins increased enterprise flexibility with increased government-generated securities, and that India remains tied to an employer-based flexibility–security regime. Finally, the article challenges the notion that China has a higher rate of growth than India because Chinese employers have greater freedom to arrange employment relationship as they wish. The article begins by introducing the flexibility–security literature pertaining to China and India, and then proceeds to contextualize the empirical analysis by detailing the character of nurse employment in the two countries. In Section 6, we describe our approach to data collection and analysis. Section 7 presents our results, and the article concludes by discussing implications that cascade from the analysis.

Enterprise flexibility and employee security

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

In focusing on China and India, we build on Vandenberg's (2010) comparison of the flexibility–security relationship in six Asian countries. He reports that China's government has embraced a model that emphasizes the need for enterprise flexibility, and a robust welfare and retraining regime, while Indian stakeholders retain ‘employer-based security’ (Vandenberg 2010: 31). By the latter notion, Vandenberg means an employment system wherein the state limits the employers' ability to dismiss/retrench employees, and concomitantly denies workers unemployment benefits and retraining (Shrestha 2009). Explanation for these findings, Vandenberg (2010: 32) argues, ‘is to be sought in domestic factors, notably the government's administrative and financial capacity, representational politics and ideology’. In brief, India's ‘leftist’ politics and limited administrative capacity and finances render it difficult to transition from an employer-based security regime and/or provide benefits to those who lose their jobs. By contrast, China's financial and administrative capacities and ‘pro-worker (communist) legacy’ has enabled it to initiate construction of a regime that enhances both flexibility and security as part of an effort to build a market-socialist alternative to capitalism.

That Vandenberg's observations have substance is reflected in the labour flexibility and worker security literature pertaining to China and India. Since 1980, numerous scholars have noted that although China has systematically dismantled the Maoist inflexible but high-security employment system, it has retained remnants of the old regime. Thus, Benson et al. (2000: 194) noted that while the push for enterprise flexibility was sustained throughout the 1990s, this process was ‘significantly limited by other practices: the reluctance to dismiss workers, limiting differences in individuals’ salaries, and the apparent automatic allocation of similar bonuses to all employees'. Analogously, in Labour Flexibility in China's Companies: An Empirical Study, Chen (2001: 8) observed that although enterprise flexibility has been increased, the rate of increase has been limited by ‘institutional and organizational inertia’, and consequently a ‘hybrid’ regime melding facets of the iron rice bowl with Western/Japanese human resource management practices has become institutionalized.

Commenting on the hybrid model, Hebel and Schucher (2006: 1) observe that China's labour market remains ‘characterised by its socialist past and differs from other varieties of transformation labour regimes and bears little resemblance to labour regimes in Western market economies’. Prior to Vandenberg's (2010) intervention, however, what had not been underscored is that the factors that have engendered this hybridity have assisted China in initiating the construction of flexibility–security regime reminiscent of those that exist in parts of Northern Europe. That this process is occurring has become apparent since China entered the World Trade Organization in 2001, and having achieved this goal initiated the construction of a labour management regime that continued to pursue enterprise flexibility but also accorded attention to worker security as part of a broader strategy to build ‘socialism through a market economy’ (Fuwa 2002; see also Choi 2011; Napoleoni 2011).

When industrial relations scholars analyse the labour system unfolding in China, they tend to focus on regulations and practices relating to labour economics, law and tripartite institutions (Cooke 2011; Shao et al. 2011). But China's nascent regime has numerous other elements, including a major retraining programme and an expanding social security system (Hebel and Schucher 2006, 2008). Industrial relations analyses also tend to overstate the importance of industrial militancy when explaining the reform process. That industrial conflict and the bleakness of working life in much of China are primary factors shaping the industrial relations environment we concede is of fundamental importance. But we hold that what is also of primary importance is the party-state's recognition that China's workers are fearful for their security, and consequently committed to saving for the day when they are too ill or infirm to labour. Long term, this is an untenable situation because a great many Chinese workers agree with Marx that there ‘must be something rotten in the very core of a social system which increases its wealth without diminishing its misery’ (cited in Gabriel 2011: 5). The extent to which this is the case has been indicated by the Bo Xilai saga, which unfolded in 2012 and which has highlighted the fact that the Chinese state needs to remain responsive to a ‘mass line’, and that it continues to be limited in its capacity to embrace neoliberal policies and dismiss those who remain committed to the struggle for socialism in China (Zhao 2012). It is also untenable because workers' insecurity has rendered China highly dependent on consumers who reside in the OECD at a time when the economies of these countries have become unstable (Crouch 2012; Nyland et al. 2011). Given this context, China's leaders are aware that they must bolster internal demand by increasing workers' security even as they strive to ensure that firms retain the flexibility required to remain competitive.

While scholars who study Chinese industrial relations have begun to indicate an awareness that the government is constructing a regime that underpins increased enterprise flexibility with increased state securities, India-focused scholars reflect the national government's lack of any substantial commitment to progressive reform. Some 11–14 per cent of India's workers are protected by labour laws or union governance (World Bank 2010: 47). Nevertheless, Indian scholars repeatedly argue that employers' freedom to hire and fire should be strengthened because existing laws allegedly undermine firms' competitiveness (Besley and Burgess 2004; Li et al. 2011).

On reviewing the literature that blames social protection and union activity for Indian employers' inability to match their Chinese competitors, Bhattacharjea (2006) observed that this perspective is commonly founded on ‘heroic’ assumptions. Not the least of these suppositions is that labour law is enforced (Kishore et al. 2011). However, the World Bank (2010) begrudgingly concedes that Indian managers deem labour laws less of an obstacle to their firms' growth than do their Chinese counterparts. This finding is inconvenient for those who wish to point to China's greater productivity as justification for diluting India's labour regulations. However, this inconvenience seldom weakens the enthusiasm with which this perspective is advanced by employers and their government and academic allies. The latter tend to ignore the World Bank findings they find distasteful or argue objective measures (as reported in the Bank's Doing Business report; see Table 1) show that India has more stringent regulations than China. This is a response promoted even though an examination of the full range of the so-called objective measures used by the World Bank reveals that some legal barriers to dismissal are greater in China than in India. Notable in this regard is severance pay and the costs associated with retraining and reassignment, which have become substantial in China.

Table 1. Employment Protection Index in China and India
No.IndexChinaIndia
Source: World Bank (2012).
1Difficulty of hiring index  
1.1Fixed-term contracts prohibited for permanent tasksNoNo
1.2Maximum length of fixed-term contracts (months)No limitNo limit
1.3Minimum wage for a 19-year-old worker/apprentice US$/month182.529.9
1.4Ratio of minimum wage to value added per worker0.370.17
2Rigidity of hours index  
2.150-hour workweek allowedYesYes
2.2Maximum working days per week66
2.3Premium for night work (% of hourly pay)390
2.4Premium for work on weekly rest day (% of hourly pay)1000
2.5Major restrictions on night workNoNo
2.6Major restrictions on weekly holiday workNoNo
2.7Paid annual leave (working days)6.715.0
3Difficulty of redundancy index  
3.1Dismissal due to redundancy allowed by lawYesYes
3.2Third-party notification if one worker is dismissedYesYes
3.3Third-party approval if one worker is dismissedNoYes
3.4Third-party notification if nine workers are dismissedYesYes
3.5Third-party approval if nine workers are dismissedNoYes
3.6Retraining or reassignmentYesNo
3.7Priority rules for redundanciesYesYes
3.8Priority rules for reemploymentYesYes
4Redundancy cost  
4.1Notice period for redundancy dismissal (weeks of salary)4.34.3
4.2Severance pay for redundancy dismissal (weeks of salary)23.111.4

The zeal with which many scholars urge the dilution of the protection provided to Indian workers and point to China's competitiveness to promote ‘reform’ causes them to be dismissed by workers and their allies. Recognizing this is the case, the World Bank has begun supplementing its demands that India's labour laws be diluted with calls to bolster social protection. In advancing this perspective, however, the Bank's authors tend to be enthusiastic/adventurist when promoting increased freedom for employers, and restrained and cautious when arguing that workers' income should be underpinned by an expanded social welfare/training regime (World Bank 2010: 105–164).

In the remainder of this article, we explore whether Indian firms' limited ability to compete against their Chinese counterparts is due to India's labour laws by examining and comparing numerical flexibility and nurse economic security in Chinese and Indian hospitals. Nurses are an appropriate occupation for our purposes because their work has many similarities across national boundaries, and because there is a clear association between the enterprise flexibility of hospitals and the security of nurses and clinical outcomes (Clark et al. 1999; Lowe 2003: 10). To carry this effort forward, the next section outlines the nature of nursing employment in our two case nations.

Healthcare and nursing in China

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

With the turn to market socialism in the late 1970s, China's government initiated a programme of corporatization that largely retained hospitals as state-owned institutions but reduced their operational funding. In response, hospitals developed alternative sources of income, and in the process created a health regime characterized by malfeasance, corruption, inequality, cost inflation and deteriorating standards (Duckett 2011; Eggleston et al. 2008; Ma and Sood 2008; Ramesh and Wu 2009). This environment induced a nursing shortage not least because hospital managers found it more profitable to hire doctors rather than nurses. This was because doctors could use their qualifications to generate additional income through issuing unnecessary prescriptions and medical tests (Hsiao and Hu 2010).

By the late 1990s, the situation in China's hospitals was dire, and in 2005 the state council was compelled to both acknowledge that the corporatization of hospitals had been ‘basically unsuccessful’ and initiate a reform plan based on an acceptance that the state must increase its role in health provision. In 2012, McKinsey & Company reported on how the plan was being implemented, what had been achieved and how it was likely to unfold through to 2020, beginning with the observation that ‘China's healthcare sector continues to develop at an astonishing rate’ (Le Deu et al. 2012: 2). The authors of the report advised that China's healthcare spending doubled from $156 billion in 2006 to $367 billion in 2011, and will reach $1,000 billion by 2020.

Nurses are benefiting from the changes to healthcare. In 2005, China's Nursing Association general secretary contributed to the reform agenda by calling on the government to compel hospitals to employ more nurses, improve their status and recognize the ‘arduous character of nurses' work’ (Fang 2007; Ungos and Thomas 2008; Zou et al. 2011). Responding to this call, the national government issued new requirements relating to the number of nurses employed in hospitals, the level of training required for many nursing positions, and the right of nurses to compete for promotion, and challenge doctors' clinical judgments (Wong 2010: 527–8). These changes remain contested, and the national government's 2011 Nursing Career Development Plan has conceded that much remains to be done to raise the number, legal rights, qualifications and working conditions of China's nurses. At the time that the union secretary made his call, there were one million registered nurses in China, and this increased to 2.05 million by 2010 and is planned to increase to 4.45 million by 2020, with 90 per cent of nurses employed in the state sector. However, achieving this goal will prove challenging because nursing remains poorly remunerated compared with other professions even though hospital administrators have begun ‘changing hiring policies, providing benefits and permanent positions for new graduates, and increasing salaries’ (Eddins et al. 2011: 32). What remains unclear at this time is the extent to which these developments will enhance nurses' well-being and become part of the emergent flexibility–security regime.

Nursing in India

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

India has created a ‘highly bureaucratic and overburdened public [hospital] system [that] seems increasingly unable to care for the steadily growing impoverished population’, together with a large and unregulated private sector that provides for those who can afford to pay (Ergler et al. 2011; 327). Constitutionally, health is the responsibility of government, but the state spends less than 1 per cent of the gross domestic product on health services, placing India among the bottom 20 per cent of countries. In this environment, the private sector provides 70 per cent of hospital beds, and even the poor utilize state hospitals only when they have no choice (Eggleston et al. 2008; Ergler et al. 2011; Sen 2011; Sengupta 2005). This situation is not being addressed. Indeed, a series of Lancet articles on India's path to universal health coverage published in 2011 alleged that health is ‘rarely a decisive political issue in national or state elections’, and concomitantly charged that politicians ‘do not take the health of those they claim to represent seriously enough’ (Horton and Das 2011: 182–183).

One example of what the Lancet describes as the ‘chronic deprivation’ characterizing India's healthcare is the ‘perilously low density of educated health workers across the country’, including nurses (Horton and Das 2011: 183). India has auxiliary nurses and midwives, registered nurses and midwives, and lady health visitor nurses. As of 2010, there were 576,810 auxiliary nurses and midwives, 1,128,116 registered nurses and midwives, and 52,490 lady health visitor nurses (Indian Nursing Council 2012). Nurses employed in the private sector receive better salaries and working conditions, but employ only 50 per cent of the nurse workforce (Sengupta 2005). The number of nurses is seriously inadequate given the nation's 1.24 billion population, a situation worsened by the fact that an estimated 40 per cent of these skilled workers are ‘inactive because of low recruitment, migration, attrition and dropouts due to poor working conditions’ (Government of India 2005: 5), the decaying state of the nurse training system, and the many thousands of nurses working outside India (Malik 2008: 36; Rao et al. 2011: 593).

Although the nursing situation is deficient, Malik (2008: 40) reports that the government refuses to acknowledge that the profession is characterized by ‘poor working conditions, stagnation, not getting the [deserved] respect, low motivation, lack of career opportunities [and] increased work load’. This lack of concern has also been observed among hospital managers. In most developing countries, nurse migration is deemed a problem, but in India, Khadria (2007) found that hospital managers are unconcerned with the exodus of nurses to other countries. Indeed, Khadria reports that many administrators join forces with commercial ventures to reap the profits that can be generated by organizing the outflow of nurses (see also Mavalankar et al. 2008).

When explaining why nurse migration is deemed unproblematic by India's government and hospital officials, Rao et al. (2011) explain that India's health system is oriented to serve the interests of the affluent, and for this cohort there is no shortage of nursing staff. Healey (2007: vi) endorses this perspective but adds that a key reason managers are unconcerned with nurse migration is the low esteem that they accord to these workers. In her history of nursing leadership and the state in India, Healey argues that nursing remains ignored as an essential dimension of medical modernity due to the ‘local practices of caste and gender, a heavily Westernised and little adapted professional culture, and a patriarchal state deaf to the voices of nurses’. Having this status, the notion that nurses might migrate is deemed of marginal concern, a situation that Healey believes will not improve unless nurses increase their rate of unionization. At this time, however, the likelihood that this will occur is slim (Nair 2011).

Having sketched the situation of nurses in China and India, in the next section we outline the research framework, data and measures of flexibility and security forms, data analysis methods, and the results that are generated.

Research framework

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

Labour flexibility and economic security are complex and multi-dimensional concepts. In this article, we examine three orthogonal forms of numerical flexibility and six orthogonal forms of economic security. We focus on three forms of numerical flexibility, these being employment (Piore 1986), contract (Steene et al. 2002) and temporality (Arvanitis 2005; Atkinson 1984; Valverde et al. 2000). To reiterate, our understanding of economic security is derived from the International Labour Organisation (ILO)'s classification (ILO 2004) and entails six orthogonal forms, these being income, work, employment, skills, labour market and voice representation. The definitions of the flexibility and security forms examined in this research are presented in Table 2.

Table 2. Forms and Definitions of Flexibility and Security Examined in this Studya
  1. a

    Forms and definitions of security were drawn from the ILO's Enterprise Labour Flexibility and Security Surveys conducted with over 10,000 managers in 12 countries (ILO 2004).

1Flexibility
1.1Employment flexibilityThe firm's freedom to lay off or discharge workers in response to market conditions
1.2Contractual flexibilityThe use of different types of employment contracts such as part-time, temporary and fixed term
1.3Temporal flexibilityChanges in the number and timing of hours worked
2Security
2.1Income securityAssured income for basic needs throughout life, compensation for adverse setbacks and incomes that are perceived as fair
2.2Work securityOccupational health and safety, as well as the modern scourges of stress, overwork and presenteeism, violence at work, and harassment in its various guises
2.3Employment securityProtection against arbitrary dismissal, regular and assured contracts, working in stable establishments
2.4Skills securityOpportunity to obtain, use, retain and refine knowledge and competencies through work
2.5Labour market securityAdequate opportunities for work, with minimal barriers to labour market participation
2.6Voice representation securityPossession of individual and collective voice to protect rights and entitlements, to obtain information and to bargain, to monitor and to evaluate the impact of work practices or policies

Data and measures

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

This research utilizes cross-sectional survey data collected from urban Chinese and Indian hospitals in March 2009. The survey was concerned with hospitals' policies and practices in reference to work and employment over the period 2007–2010. Therefore, some survey questions were retrospective, some were prospective, and others enquired about the present situation.

Prior to data collection, power analyses were conducted to determine the minimum sample size required to detect the differences in the levels of flexibility and security between Chinese and Indian hospitals. On the basis of the extant literature, Chinese hospitals were expected to have relatively low levels of flexibility but relatively high levels of security, while contrary patterns were expected for Indian hospitals. Expecting a minimum effect size of 0.8 and aiming to achieve a power of 0.8 at a significant level of 0.1 in a balanced design, power analyses with the programme G*Power 3 (Faul et al. 2007) suggested a minimum sample size of 42 for the Mann–Whitney U-test and of 46 for Fisher's exact test (two sides). These figures are larger than the minimum sample size of 19 recommended by Chen and Popovich (2002) for Kendall's tau correlation analyses of the relationships between orthogonal forms of flexibility and security in each sample. Based on this information, we sought a sample size between 25 and 30 hospitals in each country. The final sample consisted of 55 hospitals, 25 from China and 30 from India.

A two-stage sampling method was followed. For the first stage, eight cities in China (Huzhou, Jinhua, Hangzhou, Kaihua, Fuyang, Jiaxing, Jinhuan and Ningbo) and three cities in India (Delhi, Gurgaon and Noida) were selected to represent low, average and high economic growth urban areas. In the second stage, participant hospitals were selected using the probability proportional to size sampling method, where participant hospitals were randomly selected in each city proportional to the public–private division of ownership and the number of beds outlined in the comparative study of the Chinese and Indian health systems undertaken by the Rand Corporation (Ma and Sood 2008). Case firms with missing data for certain variables were excluded from the analysis. In such instances, tests were conducted to confirm that the sample was unbiased in terms of key hospital characteristics, such as ownership and bed size.

The Rand study reported that while in China ‘public entities dominate’, in India the private sector dominates, with some 78 per cent of all health expenditures occurring in private health facilities, and some 70 per cent of hospitals being private and smaller than their state counterparts. In China, government-controlled hospitals are operated and managed by a management team under the leadership of a hospital president who is normally appointed by the healthcare department of a province, city or county. The private sector's role in healthcare is limited, with only 12 per cent of hospitals being private (Eggleston et al. 2008). By contrast, the Rand report observed that in India, the need for hospital care services has been filled by a heterogeneous mix of private healthcare providers that operate on a full fee-for-service basis. Given the foregoing, only three of the 25 Chinese hospitals included in the study were private compared with six out of 30 Indian hospitals, and six of 25 Chinese hospitals had 250 or fewer beds compared with 28 of 30 Indian hospitals.

Survey instruments were distributed by visiting hospitals and meeting with nursing managers and nurses. As the constructs of flexibility and security are multi-dimensional, we utilized objective measures and content validity approach (Litwin 2003) to the fullest extent possible in constructing our survey instrument. Variables along with the measurement indicator and scale are shown in Table 3.

Table 3. Measure, Description and Value Range of Flexibility and Security Variables
VariablesMeasureDescription and value range
Employment flexibilityAutonomy in hiring and laying off of employeesOrdinal variable rated on a 1–5 scale (1 = no autonomy, 5 = complete autonomy)
Contractual flexibility — diversityNumber of employment contract types applied to nursing staffOrdinal variable rated on a 1–4 scale, with higher scores indicating higher flexibility
Contractual flexibility — intensityProportion of nursing staff with short-term and/or casual employment contractsRatio variable ranging from 0 to 1
Temporal flexibilityNumber of employment contract types utilized to adjust working hours of nursing staffOrdinal variable rated on a 0–6 scale, with higher scores indicating higher flexibility
Income security — in the futureDoes the organization operate any pension schemes?Binary variable (0 = No, 1 = Yes)
Income security — at present timeFrom the period of 1 March 2008 to 1 March 2009, did the organization cancel/cut any social benefits for nursing staff?Binary variable (0 = No, 1 = Yes)
Work securityWere there any accidents at work requiring medical treatment of more than a day off work in the last 12 months?Binary variable (0 = No, 1 = Yes)
Employment security through assurance policyIs there a policy of guaranteed job security or non-compulsory redundancies at this workplace?Binary variable (0 = No, 1 = Yes)
Employment security through protection against arbitrary dismissalDid you consult with employees or their representatives prior to making anyone redundant (redundancy includes early retirement)?Binary variable (0 = No, 1 = Yes)
Labour market securityOver the next 12 months, does the establishment plan to increase, decrease or leave unchanged the number of nursing staff (non-managerial)?Ordinal variable rated on a 1–3 scale, (1 = decrease, 2 = unchanged, 3 = increase)
Skills security — in the pastWhat was the total expenditure on training for (non-managerial) nursing staff in 2007 and 2008?Ordinal variable rated on a 1–3 scale (1 = decrease, 2 = unchanged, 3 = increase)
Skills security — in the futureOver the next 12 months, does the establishment propose to increase, decrease or leave unchanged the resources allocated for training?Ordinal variable rated on a 1–3 scale (1 = decrease, 2 = unchanged, 3 = increase)
Collective voice securityDoes a third agent (union/government official) seriously limit the ability of your managers to (1) transfer employees from one position to another, (2) dismiss employees and (3) discipline employees? (0 = No, 1 = Yes)Ordinal variable rated on a 0- to 3-composite scale (Cronbach's alpha coefficient = 0.714)

As shown in Table 3, four flexibility dimensions include employment flexibility, diversity and intensity of contractual flexibility, and temporal flexibility. Diversity of contractual flexibility concerns the range of employment contracts utilized, while intensity of contractual flexibility concerns the proportion of workers not being hired under a permanent and full-time employment contract. Diversity of contractual flexibility, employment flexibility and temporal flexibility were ordinal variables rated on a single scale, while intensity of contractual flexibility was a ratio variable. For flexibility measures, higher scores were interpreted as higher levels of flexibility.

In regard to the nine security dimensions, a binary scale was used to measure future income security should workers experience disability or old age, present absolute income security, work security, employment security through assurance policy, and employment security through protection against arbitrary dismissal. An ordinal scale was used to measure labour market security, skills security in the past, skills security in the future and collective voice security. All security dimensions, except collective voice security, were measured on a single scale, with higher scores indicating higher levels of security for all but present income security. The ordinal scale of collective voice security was a composite of workers' ability to redress grievances by appealing to a third party (union or government official). Data pertaining to this latter scale were derived from responses to three questions about the influence of a third agent on the ability of managers to (a) transfer, (b) dismiss and (c) discipline employees. ‘Yes’ and ‘no’ responses were coded as 1 and 0, respectively. An internal consistency reliability analysis gave support to the combination of these three aspects of collective voice security into a single component, with a Cronbach's alpha coefficient of 0.714. Collective voice security, therefore, was measured using a 0- to 3-composite scale, with higher scores being interpreted as higher levels of security.

Descriptive results

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

Chinese and Indian hospitals in the study sample had a similar and moderate level of employment flexibility as indicated by the median values of 3 on a 1–5 scale. Regarding contractual flexibility, both Chinese and Indian hospitals in the study sample tended to use two types of employment contracts; however, Indian hospitals had a higher average proportion of qualified nurses with short-term and/or casual employment contracts (M = 0.27, Mdn = 0.21, N = 29) than Chinese hospitals (M = 0.21, Mdn = 0.08, N = 18). Regarding temporal flexibility, Indian hospitals had a much higher level of temporal flexibility (M = 3.17, Mdn = 3.5 on a 0–6 point scale, N = 30) than Chinese hospitals (M = 0.56, Mdn = 0 on a 0–6 scale, N = 16).

In general, Indian hospitals provided a lower level of economic security than Chinese hospitals. In regard to income security, only one-fifth of the 30 Indian hospitals had pension schemes compared with 100 per cent of the 20 Chinese hospitals. However, one-tenth of the Indian hospitals had supplementary pension schemes, while all pension schemes in Chinese hospitals were generally mandated. Although majority of Chinese and Indian hospitals did not cancel or cut any social benefits during the period of 3 January 2008 to 3 January 2009, nearly one-third of Indian hospitals (9/30) reported otherwise compared with only 1/21 Chinese hospitals.

Indian hospitals provided lower levels of work and employment security than Chinese hospitals. Regarding work security, nearly two-thirds of Indian hospitals (18/30) reported the occurrence of work accidents requiring medical treatment of more than a day off work during the period of 3 January 2008 to 3 January 2009 compared with only about one-quarter of Chinese hospitals (5/19). Regarding employment security, only a third of the 30 Indian firms reported that they had a policy of guaranteed job security or non-compulsory redundancies compared with 18/22 Chinese hospitals; similarly, less than half of the Indian hospitals (13/30) reported consulting with employees or their representatives prior to making a worker redundant compared with three-quarters of Chinese hospitals (15/20).

In regard to labour market security, majority of Chinese and Indian hospitals reported that they would maintain or increase the number of nursing staff (non-managerial) over the period of 3 January 2009 to 3 January 2010. However, Indian nurses had a lower level of labour market security as more than one-tenth of Indian hospitals (4/30) reported intentions to reduce the number of nursing staff (non-managerial) compared with zero Chinese hospitals. Moreover, only three-fifths of the Indian hospitals (18/30) reported intentions to increase the number of nursing staff (non-managerial) compared with two-thirds of the Chinese hospitals (16/24).

Regarding skills security, the available data do not allow comparison between the Chinese and Indian samples in absolute terms. Nevertheless, they do suggest that skills security was improved during the period 2007–2008 in majority of both Chinese and Indian hospitals, as indicated by the increase in expenditure on training in 19/19 Chinese hospitals and 10/16 Indian hospitals. Over the period 2009–2010, however, skills security was reported to be likely to remain the same in the vast majority of Indian hospitals (27/30 Indian hospitals reported intentions to maintain their current level of resources allocated for training); by contrast, skills security was reported likely to improve in majority of Chinese hospitals (16/21 Chinese firms reported intentions to increase their current level of resources allocated for training).

Regarding collective voice security, about one-third of the 30 Indian hospitals reported that a third agent (union/government official) was able to seriously limit the ability of management to discipline or dismiss employees compared with nearly three-quarters of the 25 Chinese hospitals. Notably, a third agent in Indian hospitals was more likely to exert influence in the following matters in a descending order of magnitude: discipline, dismissal and transfer. By contrast, a third agent in Chinese hospitals was more likely to exert influence in matters relating to dismissal, followed by those related to discipline and transfer.

Non-parametric tests results

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

Mann–Whitney U and two-sided Fisher's exact tests were conducted to compare the levels of flexibility and security between Chinese and Indian hospitals, while Kendall's tau-c correlations were utilized to examine the relationships between orthogonal forms of flexibility and security in each sample. The Benjamini and Hochberg's (1995) linear step-up method was utilized to adjust the false discovery rates of p-values observed in single comparisons using the same test at a significant level of 0.1. Both unadjusted and adjusted p-values are reported.

Comparison of Numerical Flexibility between Chinese and Indian Hospitals

As expected, results from the Mann–Whitney tests suggest that Indian hospitals had higher levels of numerical flexibility than Chinese hospitals. In regard to employment flexibility, the autonomy that Chinese hospitals have in hiring and laying off workers (mean rank = 29, N = 25) was not significantly higher than that of Indian hospitals (mean rank = 27.2, N = 30), U = 400, p = 0.654 (adjusted p = 0.691), r = 0.06, ns. These results suggest that Chinese and Indian hospitals had similar levels of employment flexibility.

Regarding contractual flexibility, the number of employment contract types for nursing staff did not significantly differ between Chinese hospitals (mean rank = 23.1, N = 18) and Indian hospitals (mean rank = 24.5, N = 29), U = 246, p = 0.691 (adjusted p = 0.691), r = −0.06, ns. However, the average share of nursing staff with short-term and/or casual employment was higher in Indian hospitals (mean rank = 26.9, N = 29) than in Chinese hospitals (mean rank = 19.3, N = 18), U = 177, p = 0.044, (adjusted p = 0.088), r = −0.29. These results suggest that Indian hospitals were no more likely than their Chinese counterparts to utilize different employment contract types to adjust the size and structure of the workforce in accordance with fluctuations in labour demand. Nevertheless, Indian hospitals utilized short-term and/or casual employment more extensively than their Chinese counterparts.

Finally, in regard to temporal flexibility, the number of employment contract types utilized to adjust working hours of nursing staff was substantially higher in Indian hospitals (mean rank = 28.7, N = 30) than in Chinese hospitals (mean rank = 13.7, N = 16), U = 83.5, p < 0.001 (adjusted p < 0.001), r = −0.55. These results suggest that Indian hospitals were more flexible than Chinese hospitals in using different employment contract types to adjust working hours of nursing staff in accordance with fluctuations in labour demand.

Comparison of Economic Security of Qualified Nurses in Chinese and Indian Hospitals

Mann–Whitney U-tests were conducted to compare the three dimensions of security, namely labour market security, skills security in the past and collective voice security. In regard to labour market security, there was no statistically significant difference in the employment outlook for nursing staff between Chinese hospitals (mean rank = 29.2, N = 24) and Indian hospitals (mean rank = 26.2, N = 30), U = 400, p = 0.413 (adjusted p = 0.413), r = 0.11, ns. These results suggest that the chances of nurses being employed in Chinese and Indian hospitals were similar.

Regarding skills security, both Indian and Chinese hospitals tended to increase their expenditure on training during the period of 2007–2008; however, this tendency was weaker in the former (mean rank = 14.4, N = 16) than in the latter (mean rank = 21, N = 19), U = 209, pexact = 0.061 (adjusted pexact = 0.092), r = 0.49. These results suggest that nursing staff in Indian hospitals had less chance to improve/update their skills through employer-provided training than their counterparts in Chinese hospitals.

Regarding collective voice security, the collective voice index was considerably lower in Indian hospitals (mean rank = 20.3, N = 30) than in Chinese hospitals (mean rank = 35.8, N = 23), U = 547, p < 0.001 (adjusted p < 0.001), r = 0.52. These results suggest that nursing staff in Indian hospitals were less likely than their Chinese counterparts to protect their rights and benefits through collective action/bargaining or government intervention.

Two-sided Fisher's exact tests were conducted to compare the five security dimensions in Chinese and Indian hospitals, namely future income security, work security, skills security in the future, employment security through assurance policy and employment security through protection against arbitrary dismissal. The test results showed that Indian hospitals provided lower levels of security than Chinese hospitals at a significant level of 0.05 or lower (see Table 4).

Table 4. Fisher's Exact Tests of Future Income Security, Work Security, Employment Security and Skills Security in the Future in Chinese and Indian Hospitals
VariablesΦPhip-value
UnadjustedAdjusteda
  1. a

    Using Benjamini and Hochberg's (1995) linear step-up method to control the false discovery rate of p-values.

Income security — in the future0.7840.0000.000
Work security−0.3940.0060.009
Employment security through assurance policy0.4800.0010.002
Employment security through protection against arbitrary dismissal0.3130.0420.047
Skills security — in the future0.6740.0000.000

Relationships between Flexibility and Security Forms in Indian and Chinese Hospitals

Table 5 reports unadjusted and adjusted p-values of the Kendall's tau-c correlation analyses of the relationships between the four dimensions of flexibility and the nine dimensions of security in Chinese and Indian hospitals. Before conducting the analyses, responses to the intensity of contractual flexibility were rated on a 3-point scale ranging from 0 = no to 1 = low, and 2 = high; low or high scores were formed by comparing the reported proportions of qualified nurses employed on short-term or casual contracts with the total sample median value of 17.86 per cent.

Table 5. Unadjusted and Adjusted p-Values of the Relationships between Orthogonal Forms of Flexibility and Security in Chinese and Indian Hospitals by Using Kendall's tau-c Correlation Analysisa
VariablesEmployment flexibilityContractual flexibility — diversityContractual flexibility — intensityTemporal flexibility
UnadjustedAdjustedUnadjustedAdjustedUnadjustedAdjustedUnadjustedAdjusted
  1. a

    Using Benjamini and Hochberg's (1995) linear step-up method to control the false discovery rate of p-values. Enclosed in the table is the ‘—’ symbol to indicate that no statistic was computed because the security variable was a constant.

China        
Income security — in the future    
Income security — at present time0.3520.4401.0001.0000.5780.756 
Work security0.1690.4230.1290.2150.5850.7560.7820.782
Employment security — assurance0.6510.6511.0001.0000.7750.7750.1490.224
Employment security — protection0.3000.4400.0290.1450.6050.7560.1680.224
Skills security — in the future0.0200.1000.0630.1580.1030.5150.0460.184
Skills security — in the past    
Labour market security0.3300.6600.7760.7760.2740.4280.0350.070
Collective voice security1.0001.0000.2820.5640.4280.4280.0720.072
India        
Income security — in the future0.0400.1200.9741.0000.8610.8610.7190.805
Income security — at present time0.0320.1201.0001.0000.0210.0630.0210.042
Work security0.7040.8320.1250.3750.0160.0630.0000.000
Employment security — assurance0.4560.6840.0510.3060.0410.0820.8050.805
Employment security — protection0.1410.2820.3920.5880.8180.8610.0000.000
Skills security — in the future0.8320.8320.2640.5280.3160.4740.1570.236
Skills security — in the past0.4350.6530.2600.6840.0010.0030.0000.000
Labour market security0.0150.0450.4560.6840.0450.0680.6330.683
Collective voice security0.7810.7810.9240.9240.0690.0690.6830.683

As shown in Table 5, it was impossible to examine the relationships between the four flexibility dimensions and the two security dimensions of future income security and skills security in the past in Chinese hospitals because all provided pension benefits and increased their expenditure on training during 2007–2008. It was also impossible to examine the relationship between the cancel/cut of social benefits and the number of employment contract types utilized to adjust the working hours of nursing staff as all 14 valid cases did not cancel/cut social benefits. After adjustments of p-values, only temporal flexibility was found to have significant relationships with labour market security (unadjusted p = 0.035, adjusted p = 0.070) and collective voice security (unadjusted and adjusted p = 0.072). More specifically, the test results showed that the number of employment contract types utilized to adjust the working hours of nursing staff was negatively associated with the employment prospects for nursing staff over the next 12 months and the collective voice index. These results suggest that temporal flexibility had a trade-off relationship with labour market and collective voice security in Chinese hospitals.

Regarding Indian hospitals, the test results show no statistically significant relationships at the commonly accepted levels between the diversity of contractual flexibility and the nine security dimensions after adjustments of p-values. In regard to employment flexibility, the autonomy in hiring and laying off employees was found to be negatively associated with nurses' employment prospects for the next 12 months (unadjusted p = 0.015, adjusted p = 0.045). These results suggest that employment flexibility had a trade-off relationship with future labour market security.

In regard to the intensity of contractual flexibility, the share of nursing staff under short-term and/or casual employment contracts was positively associated with the existence of a job security policy (unadjusted p = 0.041, adjusted p = 0.082) and employment prospects for nursing staff over the next 12 months (unadjusted p = 0.045, adjusted p = 0.068), but was negatively associated with the cancel/cut of social benefits (unadjusted p = 0.021, adjusted p = 0.063), the occurrence of accidents at work (unadjusted p = 0.016, adjusted p = 0.063), resources allocation for training over the next 12 months (unadjusted p = 0.001, adjusted p = 0.003) and collective voice index (unadjusted and adjusted p = 0.069). These results suggest that the intensity of contractual flexibility had a complementary relationship with employment, labour market, present income and work security, but a trade-off relationship with skills security in the future and collective voice security.

Finally, regarding temporal flexibility, the number of employment contract types utilized to adjust the working hours of nursing staff was found to have statistically significant and positive relationships with cancel/cut of social benefits (unadjusted p = 0.021, adjusted p = 0.042), the occurrence of accidents at work (unadjusted and adjusted p < 0.001), consulting with employees or their representatives prior to making anyone redundant (unadjusted and adjusted p < 0.001), and the 2007–2008 expenditure on training (unadjusted and adjusted p < 0.001). These results suggest that temporal flexibility had a trade-off relationship with present income security and work security, but a complementary relationship with employment and skills security in the past.

Findings and discussion

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

Our analysis tests Vandenberg's (2010) claim that China has embraced a mix of reminiscent policies that promote both flexibility and security, and that India remains tied to an ‘employer-based security’ regime. Both our examination of the literature and our empirical analysis add new and unique evidence that bolsters his claims. The analysis shows that although China has striven to enhance workplace flexibility, its hybrid approach to management of employment relationship balances this effort by bolstering nurses' sources of security. All Chinese hospitals in our study, for example, provide staff with social security benefits, and an overwhelming majority increases expenditure on training, and engages a third agent when making decisions relating to dismissal, discipline and transfer. By contrast, in India, the push for enterprise flexibility has not been accompanied by a strengthening of nurse security. Only one-fifth of the 30 Indian hospitals had pension schemes, only a third had policies that guaranteed job security or limited non-compulsory redundancies, less than half consulted with employees or their representatives prior to introducing layoffs, and only one-third reported that a third agent (union/government official) limited the management's ability to discipline or dismiss employees. In short, the very limited protection provided by the traditional employer-based regime within India fails to provide any serious level of security to nurses. Indeed, the security instruments that do exist are under serious threat given the unending agitation by employers and their allies to increase enterprise flexibility by further diluting existing sources of employee security.

But while our analysis supports Vandenberg's observations, it also suggests that caution is needed when embracing generalizations. We find that while there is evidence that China has embarked on the construction of a regime that provides for workers' security from unemployment, it is clear that the nation remains well short of this goal. Moreover, while our evidence shows that the policies and practices of Chinese hospitals are supportive of worker security, albeit to differing degrees, the extent to which workers perceive this to be the case remains unclear. This is an issue we intend to turn to when we analyse the data generated by the 3,000 nurses surveyed in our study.

But if optimism regarding worker security in China is justified, our analysis suggests that Indian governments and employers have little interest in developing an approach to enterprise reform that promotes both flexibility and worker security. Indeed, the fact that few of the hospitals studied were willing to negotiate with employees even when introducing redundancies suggests that the limited rights accorded by national regulation provide nurses with little security.

Caution is also required as regards Vandenberg's claim that the explanation for the existing flexibility–security regimes in China and India is located in state administrative and financial capacity, representational politics, and ideology. Our analysis of the extant literature lends support to this perspective in relation to nurses, but also suggests that other influences need to be incorporated into explanations for flexibility–security norms and practices. Our empirical data point to what some of these additional influences may be. For example, while Chinese and Indian managers have a similar range and mix of contract types at their disposal, Indian hospitals seem to have a predilection for short-term and casual contracts, whereas Chinese hospitals use this tool more sparingly. This suggests that Chinese and Indian employers/managers within hospitals make different choices and behave differently, irrespective of the contractual instruments at their disposal. Thus, while Vandenberg has provided valuable insights into determining the special institutional mixes that might balance flexibility and security, our data suggest that norms, customs, values and practices may also be influential.

Moreover, while we accept that China's government has sought to develop a nursing workforce that is flexible and secure in order to contain social discontent, and because it has the administrative capacities and an ideological orientation facilitative of this effort, our analysis finds that these factors are only part of the story. China's leaders have also chosen to embrace this regime because the nation's economy is vulnerable to volatility in international markets, and because of the need to convince China's population that it is unnecessary to save a large proportion of one's income as security against sickness or infirmity.

Turning to the claim, much repeated in the literature, that China's enterprise–flexibility mix is more favourable to employer interests than is the case in India, our findings show that in relation to nurses employed in sampled hospitals, the reverse is the case. Hospitals in India are more flexible than their Chinese counterparts, while the nurses employed in these organizations have less security than Chinese nurses. This finding is important, first because this study is the first empirical examination of the flexibility–security issue in Asia and elsewhere that has utilized primary, enterprise-based data, and that focused on workers with similar skills and task expectations. Indeed, we underpin our findings regarding the importance of contingencies with a level of detail unknown in examinations of the flexibility–security nexus.

Overall, our findings constitute a substantial challenge to the claim that Indian employers are unable to compete successfully against Chinese firms because the flexibility of their enterprises is limited by onerous labour laws. By so doing, we challenge the many contributions to the literature that argue for the dilution of Indian labour law, and bolster the claim that China is constructing a regime. Given these findings, we suggest that Indian employers and their supporters would be wise to focus less on the alleged constraints imposed upon them by the state and employee collective action, and accord greater attention to how it is that Chinese hospital managers are able to operate their enterprises with relatively lower levels of flexibility in the utilization of labour. Scholars and managers should also strive to determine if a similar situation exists in other industrial and workforce sectors.

To reiterate, a key influence that motivated the research presented in the article was the charge that advocates of governance regimes that promote both flexibility and security have accorded insufficient attention to specific enterprises, occupations and regions. The findings show that consideration of these issues is important, for profound differences in the nature of the flexibility–security relationship can be identified across jurisdictions even when workers who have similar skills and who are employed in similar enterprises are considered. This finding highlights the need for analysts to embrace a multi-dimensional approach when examining the flexibility–security nexus, and to not assume that any one variable will be the primary determinant shaping this relationship. The fact that Chinese hospitals are less flexible in their approach to the employment relationship than their Indian counterparts, for example, exposes the weakness of the primacy accorded labour law by the World Bank.

In conclusion, we freely concede that our data are limited to one occupation, to one type of workplace and to only two countries. Consequently, it is not possible to infer that similar findings would be generated if different industries, occupations and regions were examined. But while acknowledging this point, we hold that the findings are important because they do lend support to Vandenberg's claim that China has the ideological and practical capacity to build a regime that is encompassing of all nurses. This is manifest in the government's investment in training, social security and expansion of worker voice, and in its concomitant practice of ensuring that firms retain substantial employment flexibility. A similar conclusion cannot be identified in relation to India; our findings support Vandenberg's assessment that the Indian state does not have the wherewithal required to move beyond the existing ‘employer-based security’ regime. Consequently, India's workers would be wise to hold on to the limited protections they do have. Finally, by bringing into question untested assumptions regarding the relationship between the flexibility of enterprises and worker security across the two countries, our findings underscore two points. First, scholars need to factor more elements into their studies of the special institutional mixes that determine the flexibility–security nexus than is commonly undertaken in studies of the flexibility–security nexus. Second, advocates and analysts need to provide robust evidence that supports their priors, and appreciate that efficient workplaces and worker security are not necessarily incompatible.

Acknowledgements

  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References

This research was supported by a grant from the Australian Research Council. The contribution of all authors was equal. The authors would like to thank Prue Burns and the anonymous reviewers for their assistance and input.

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  1. Top of page
  2. Abstract
  3. Introduction
  4. Enterprise flexibility and employee security
  5. Healthcare and nursing in China
  6. Nursing in India
  7. Research framework
  8. Data and measures
  9. Descriptive results
  10. Non-parametric tests results
  11. Findings and discussion
  12. Acknowledgements
  13. References
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