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The level of employee engagement here falls short of international standards. Hewitt's '2003 Best Employer Study', which measured the degrees to which employees said good things about their employers, stayed with their finn and strived for their companies, showed that Chinese employees were generally less engaged than their counterparts in other countries around the world. A low level of engagement is linked to higher staff turnover, lower productivity and lower financial performance for a company. According to the study, the drivers for employee engagement in China are: career opportunities, work resources and non-cash benefits. The companies that emerged top of the table in the Best Employer survey used a number of measures to ensure high employee engagement. Typically, the measures are not reliant on a pay that is above the market rate; instead, attractive programs for career development, manager and leadership training and assessment, and work-life balance are taken into account.
An additional HR challenge u2014u2014 not unique to China but more pronounced here u2014u2014 is the need for companies to explain to their employees how their daily work activities affects the overall business results and rewards. Many employees are seeking to understand how their work contributes to the business goals; they typically develop a higher commitment and loyalty to their employers if they understand how 'important' their work is for the company. A clear link between individual performance and rewards u2014u2014 both financial and otherwise u2014u2014 has to be provided, as many employees in China still believe that seniority and loyalty rather than individual job performance should determine compensation. This is especially true of staff members of an older generation. Chinese employees consider non-cash benefits as one of the most important factors in joining and staying with a company. The challenge for foreign companies is to balance the costs of supplemental benefits with the need to provide a competitive total compensation package. China's social security is still being developed and at the moment provides minimal benefits.