Submitted Successfully!
To reward your contribution, here is a gift for you: A free trial for our video production service.
Thank you for your contribution! You can also upload a video entry or images related to this topic.
Version Summary Created by Modification Content Size Created at Operation
1
Jiaqi Jing
 -- 1676 2022-07-15 13:28:18 |
2 update layout and references
Amina Yu
-6 word(s) 1670 2022-07-18 03:23:21 |

Video Upload Options

Do you have a full video?
Send video materials Upload full video

Confirm

Are you sure to Delete?
Yes No
Cite
If you have any further questions, please contact Encyclopedia Editorial Office.
Jing, J.;  Feng, X.;  Song, J.;  Li, B. China’s Disability Employment System and Firm Performance. Encyclopedia. Available online: https://encyclopedia.pub/entry/25182 (accessed on 02 July 2024).
Jing J,  Feng X,  Song J,  Li B. China’s Disability Employment System and Firm Performance. Encyclopedia. Available at: https://encyclopedia.pub/entry/25182. Accessed July 02, 2024.
Jing, Jiaqi, Xiaoqing Feng, Jianbo Song, Boya Li. "China’s Disability Employment System and Firm Performance" Encyclopedia, https://encyclopedia.pub/entry/25182 (accessed July 02, 2024).
Jing, J.,  Feng, X.,  Song, J., & Li, B. (2022, July 15). China’s Disability Employment System and Firm Performance. In Encyclopedia. https://encyclopedia.pub/entry/25182
Jing, Jiaqi, et al. "China’s Disability Employment System and Firm Performance." Encyclopedia. Web. 15 July, 2022.
China’s Disability Employment System and Firm Performance
Edit
This entry is adapted from the peer-reviewed paper 10.3390/su14137835

Employment is a fundamental human right of the disabled, and is also an important way for them to meet their survival needs, fully integrate into social life and realize their self-worth. As a group with a total population of more than 1 billion, the difficulty of employment for the disabled has always been a matter of great concern to official organizations and scholars. The OECD (2003; 2010) reported that disabled people were at twice the risk of unemployment and poverty compared to non-disabled people.

disabled employee firm performance sustainability

1. Introduction

Since the outbreak of the COVID-19, disabled groups have faced more serious inequality, and they often feel discriminated against and marginalized [1]. Since the mid-twentieth century, many countries have begun to establish education and employment support systems for the disabled in order to promote their employment [2]. The employment support system for persons with disabilities in various countries mainly includes two modes. One is to use non-specific laws to protect the equal participation of persons with disabilities in social life and employment (e.g., the Americans with Disabilities Act), while the other is the employment protection system to promote the employment of severely disabled persons (e.g., the employment quota systems in China and the Netherlands) [3].
Under the employment quota system, large organizations have quotas for employing persons with disabilities and face fines if they fail to meet the quotas. Many ESG rating agencies also regard the company’s employment security for the disabled as one of the important standards for labor relations management and ESG rating. Although more and more organizations have realized that managing the labor force is very necessary in an increasingly diverse society, due to the lack of actual data on the employment of disabled persons by enterprises, few studies directly provide empirical evidence on the financial consequences of employing disabled persons [4]. Employers have some prejudice against disabled employees because they have no way to know the actual impact of employing various types of disabled persons on firm performance.

2. China’s Disability Employment System

There are three main employment modes for the disabled in China: centralized employment, proportional employment and individual employment. Like other members of society, persons with disabilities also have the need for social interaction and have equal rights to work and development [5]. Previous studies have also shown that people employed in the open labor market have a higher quality of life than those employed in protective workshops [6]. Compared with centralized employment in welfare enterprises and individual job selection, proportional employment (employment quota system) can better protect the rights of the disabled to develop and promote social communication. In recent years, the Chinese government’s policy system has also been gradually weakening its emphasis on centralized employment and emphasizing instead market-oriented models such as proportional decentralized employment [7].
China’s employment quota system dates back to 1990. The 1990 law on the protection of the disabled mentions that employers should arrange the employment of the disabled according to a certain proportion. However, due to weak supervision, the proportional employment system has been ineffective. In September 2015, the Chinese government launched the Management Regulation of the Collection and Use of Employment Security Fund for the Disabled, redefining the employment quota for the disabled in enterprises and strengthening the collection of fines from enterprises that fail to meet the quota. According to the new regulation, enterprises with more than 20 employees are obliged to provide jobs for the disabled according to the quota, which ranges from 1.5% to 2% in different provinces. If the enterprises fail to achieve the quota, they must pay the employment security fund for the disabled based on the average compensation of on-the-job employees. Conversely, enterprises that have overfulfilled the employment task can be rewarded with government subsidies.
According to the calculation, the employees’ average monthly compensation of Chinese Listed Companies in 2021 is about 16,000 yuan; that is to say, compared with other countries’ implementation of the employment quota system for the disabled, the quota required by the Chinese government is relatively low (e.g., the quota set by Germany is 6%, and the quota set by Austria is 4%) but the amount of employment security fund for the disabled is relatively high (e.g., Japan requires employers to pay a monthly amount of 50,000 yen per person short of their levy quotas if they are unable to achieve the quotas, equivalent to 2555 yuan). In the following four years, in order to reduce the economic pressure of enterprises, the Chinese government reduced the maximum amount of employment security fund for the disabled and in 2020 adopted the method of phased collection. However, the overall model of the employment quota system has not changed greatly.
In addition to employment security fund for the disabled, the Chinese government has also adopted tax relief for enterprises that provide jobs for the disabled. The wages paid to disabled employees can be 100% added and deducted when paying enterprise income tax. Disabled employees are also exempted from individual income tax, indirectly reducing an enterprise’s labor cost.

3.Labor Productivity of Disabled Employees

Studies have shown that employers believe the biggest challenge in recruiting people with disabilities is the worry that they cannot complete their work effectively [8]. This concern is mainly based on three considerations. First, the physical and mental conditions of disabled employees may lead to their higher absenteeism rate, shorter working hours and lower productivity [9]. Second, employers are worried that the disabled cannot complete manual work and desk work at the same time [10][11]. Third, sometimes the disabled cannot effectively use the equipment provided in the workplace [12], which will affect the communication between the disabled and other employees. Employers need more accurate and practical information, especially on the specific impact of different types of disability on productivity, in order to eliminate their preconceptions about persons with disabilities and concerns about the productivity.
In fact, as long as the work arrangement is reasonable, disability does not necessarily reduce work efficiency. For example, case studies have shown that deaf employees are fully competent for work on the production and assembly line [4]. Employees with physical disabilities are no different from other people in speech expression and can be fully competent for customer service [13]. Moreover, due to the difficulty of job hunting, disabled employees will cherish their work. They tend to be more loyal, punctual [14], work longer and have a lower turnover rate [15][16][17]. In addition, the construction of barrier-free facilities is the most important way to eliminate “environmental barriers” in the workplace and improve the labor productivity of disabled employees [18].

4. Employee Diversity and Firm Performance

The core issue of employee diversity discussion is the diversification effect brought by differences among employees. The differences among employees will affect their way of thinking and work attitude, impacting firm performance. For the impact of employee diversity on firm performance, information decision theory (Williams et al., 1998) [19] and social classification theory (Turner et al., 1987) [20] give two opposite explanations.
Information decision theory believes that diversity plays a positive role in promoting firm performance. When there are great differences within the group, the knowledge and skills brought by diversity can fully increase the cognitive resources of the group and improve firm performance [21]. These documents mainly focus on the gender composition of corporate governance. Employees with a disability contribute new creative and other skills to the work environment and their role [22][23][24]. Disabled employees can think from the perspective of different customer groups and make the company’s customer base more diversified [16][25][26]. In addition, the company’s inclusion of disabled groups can make employees feel social altruism and personal satisfaction [27], creating a more inclusive workplace culture and thereby strengthening a company’s overall workforce [23][25][28][29][30].
Social categorization theory believes that diversity has a negative effect on firm performance because diversity may lead to the decrease of team cooperation and the efficiency of the decision-making process [31]. In the context of the including disabled employees in the workforce, people are often reluctant to interact with those with mental health problems and equate mental illness with a tendency towards violence [32]. Similarly, employees have negative feedback on people with communication barriers, believing that they do not have enough ability in the fast communication environment and will affect the overall work performance of the team [33].
Furthermore, it was showed that the specific impact of diversity on firm performance may vary depending on the environment in which the company operates [4]. For example, the study conducted by Duppati et al. (2020) shows that the market performance of female directors is better in countries that support gender equality [34]. The results of these studies show the positive effects of diversity to be stronger under a climate of supportive diversity conditions.

5. Corporate Social Responsibility and Firm Performance

With the rise of the concept of corporate social responsibility, CSR is gradually regarded by companies as an important strategic resource in improving financial performance. Corporates’ fulfillment and disclosure of social responsibility can help establish a good reputation and corporate image [35][36]. Especially since the outbreak of COVID-19, investors and the public have paid more attention to the sustainable development ability of enterprises and their long-term commitment to fulfilling their social responsibilities [37]. From the perspective of risk management, continuous CSR behavior will bring positive moral capital, reduce the negative evaluation of consumers after negative events and play a buffer role in the event of crisis [38]. In addition, CSR is often regarded as an important way to obtain political connection and develop resources [39][40], playing a positive role in promoting firm performance.
Although the topic of CSR has a long history, few studies directly discuss the impact of CSR on firm performance from the perspective of including disabled employees. The inclusion of disabled employees is a form of CSR. Internal employees, including the disabled, can make employees aware of the company’s efforts to fulfill social responsibility, which will result in lower turnover and improve the participation and potential of all employees [41]. For external stakeholders, the inclusion of disabled employees creates a positive corporate image [23][42]. Research by Henry et al. (2014) [25] confirms that companies that include employees with disabilities can gain a larger customer base and have the opportunity to win higher customer satisfaction and brand loyalty.

References

  1. Rotarou, E.S.; Sakellariou, D.; Kakoullis, E.J.; Warren, N. Disabled people in the time of COVID-19: Identifying needs, promoting inclusivity. J. Glob. Health 2021, 11, 03007.
  2. Mori, Y.; Sakamoto, N. Economic consequences of employment quota system for disabled people: Evidence from a regression discontinuity design in Japan. J. Jpn. Int. Econ. 2018, 48, 1–14.
  3. Lin, X.U. The difficulty of the disabled employment and the perfection of the employment promotion policy. J. Northwest Univ. Philos. Soc. Sci. Ed. 2010, 40, 116–120. (In Chinese)
  4. Lips, P. Revealing the Impact of the Inclusion of Disabled Employees on Firm Performance: The Moderating Role of Firm Characteristics; University of Twente: Enschede, The Netherlands, 2018.
  5. Pang, F.; Niu, L. “Punish-Style” Incentives: An Analysis of the Burden of Enterprises’ Employment Guarantee for the Disabled and the Effect. Contemp. Financ. Econ. 2020, 8, 3–14. (In Chinese)
  6. Liao, J. Employment Policy for the Handicapped: International Experience and the Inspiration to China. Popul. Econ. 2008, 6, 32–37. (In Chinese)
  7. Liao, H.; Luo, G. From country to market. Changes in the policy of centralized employment of the disabled in Chinese Mainland (1949~2007). Study Pract. 2010, 10, 94–100. (In Chinese)
  8. Burke, J.; Bezyak, J.; Fraser, R.T.; Pete, J.; Ditchman, N.; Chan, F. Employers’ attitudes towards hiring and retaining people with disabilities: A review of the literature. Aust. J. Rehabil. Couns. 2013, 19, 21–38.
  9. Dewa, C.S.; Lin, E. Chronic physical illness, psychiatric disorder and disability in the workplace. Soc. Sci. Med. 2000, 51, 41–50.
  10. Fraser, R.; Ajzen, I.; Johnson, K.; Hebert, J.; Chan, F. Understanding employers’ hiring intention in relation to qualified workers with disabilities. J. Vocat. Rehabil. 2011, 35, 1–11.
  11. Fraser, R.T.; Johnson, K.; Hebert, J.; Ajzen, I.; Copeland, J.; Brown, P.; Chan, F. Understanding employers’ hiring intentions in relation to qualified workers with disabilities: Preliminary findings. J. Occup. Rehabil. 2010, 20, 420–426.
  12. Barrette, J.; Garcia, L.J. New considerations for employers regarding workplace integration: The impact of communication disorders. Int. J. Pract. Approach Disabil. 2002, 25, 4–14.
  13. Liao, H. Exchange, Welfare and Exploitation: Right at work of disabled people under the protective employment. Sociol. Stud. 2014, 29, 148–173. (In Chinese)
  14. Erickson, W.; Lee, C.G.; Von Schrader, S. 2008 Disability Status Reports: United States. 2010. Available online: https://hdl.handle.net/1813/90055 (accessed on 25 May 2022).
  15. Wolffe, K.E.; Candela, A.R. A qualitative analysis of employers’ experiences with visually impaired workers. J. Vis. Impair. Blind. 2002, 96, 622–634.
  16. Schartz, H.A.; Hendricks, D.J.; Blanck, P. Workplace accommodations: Evidence based outcomes. Work 2006, 27, 345–354.
  17. Lindsay, S.; Cagliostro, E.; Albarico, M.; Mortaji, N.; Karon, L. A systematic review of the benefits of hiring people with disabilities. J. Occup. Rehabil. 2018, 28, 634–655.
  18. Badungodage, A.S.; Amirthalingam, K. Importance of barrier free design in built-environment to empower physically disabled persons. Sri Lanka Econ. J. 2012, 13, 58–73.
  19. Williams, K.Y.; O’Reilly, C.A., III. Demography and. Res. Organ. Behav. 1998, 20, 77–140.
  20. Turner, J.C.; Hogg, M.A.; Oakes, P.J.; Reicher, S.D.; Wetherell, M.S. Rediscovering the Social Group: A Self-Categorization Theory; Basil Blackwell: Oxford, UK, 1987.
  21. Nguyen, T.; Nguyen, A.; Nguyen, M.; Truong, T. Is national governance quality a key moderator of the boardroom gender diversity–firm performance relationship? International evidence from a multi-hierarchical analysis. Int. Rev. Econ. Financ. 2021, 73, 370–390.
  22. Friedner, M. Producing “Silent Brewmasters”: Deaf Workers and Added Value in India’s Coffee Cafés. Anthropol. Work Rev. 2013, 34, 39–50.
  23. Kalargyrou, V.; Volis, A.A. Disability inclusion initiatives in the hospitality industry: An exploratory study of industry leaders. J. Hum. Resour. Hosp. Tour. 2014, 13, 430–454.
  24. Scott, M.; Jacob, A.; Hendrie, D.; Parsons, R.; Girdler, S.; Falkmer, T.; Falkmer, M. Employers’ perception of the costs and the benefits of hiring individuals with autism spectrum disorder in open employment in Australia. PLoS ONE 2017, 12, e0177607.
  25. Henry, A.D.; Petkauskos, K.; Stanislawzyk, J.; Vogt, J. Employer-recommended strategies to increase opportunities for people with disabilities. J. Vocat. Rehabil. 2014, 41, 237–248.
  26. Buc, I. Integrating people with disability into the workforce: The case of a retail chain. Equal. Divers. Incl. Int. J. 2010, 29, 534–538.
  27. Bengisu, M.; Balta, S. Employment of the workforce with disabilities in the hospitality industry. J. Sustain. Tour. 2011, 19, 35–57.
  28. Hernandez, B.; Cometa, M.J.; Velcoff, J.; Rosen, J.; Schober, D.; Luna, R.D. Perspectives of people with disabilities on employment, vocational rehabilitation, and the Ticket to Work program. J. Vocat. Rehabil. 2007, 27, 191–201.
  29. Owen, F.; Li, J.; Whittingham, L.; Hope, J.; Bishop, C.; Readhead, A.; Mook, L. Social return on investment of an innovative employment option for persons with developmental disabilities: Common ground cooperative. Nonprofit Manag. Leadersh. 2015, 26, 209–228.
  30. Guillory, W.A. Inclusive Leadership: People, Engagement, and Performance. In The Routledge Companion to Inclusive Leadership; Routledge: London, UK, 2020; pp. 42–52.
  31. EmadEldeen, R.; Elbayoumi, A.F.; Basuony, M.A.; Mohamed, E.K. The effect of the board diversity on firm performance: An empirical study on the UK. Corp. Ownersh. Control. 2021, 18, 337–347.
  32. Link, B.G.; Phelan, J.C.; Bresnahan, M.; Stueve, A.; Pescosolido, B.A. Public conceptions of mental illness: Labels, causes, dangerousness, and social distance. Am. J. Public Health 1999, 89, 1328–1333.
  33. Barron, D.N.; West, E.; Hannan, M.T. A time to grow and a time to die: Growth and mortality of credit unions in New York City, 1914–1990. Am. J. Sociol. 1994, 100, 381–421.
  34. Duppati, G.; Rao, N.V.; Matlani, N.; Scrimgeour, F.; Patnaik, D. Gender diversity and firm performance: Evidence from India and Singapore. Appl. Econ. 2020, 52, 1553–1565.
  35. Miller, S.R.; Eden, L.; Li, D. CSR reputation and firm performance: A dynamic approach. J. Bus. Ethics 2020, 163, 619–636.
  36. Pham, H.S.T.; Tran, H.T. CSR disclosure and firm performance: The mediating role of corporate reputation and moderating role of CEO integrity. J. Bus. Res. 2020, 120, 127–136.
  37. Kholaif, M.M.N.H.K.; Ming, X. COVID-19′s fear-uncertainty effect on green supply chain management and sustainability performances: The moderate effect of corporate social responsibility. Environ. Sci. Pollut. Res. 2022, 2022, 1–22.
  38. Jung, S.; Lee, S.H. The buffering effect of continuous corporate social responsibilities engagement on negative consumer responses toward brand crises. Corp. Soc. Responsib. Environ. Manag. 2022, 2022, 1–11.
  39. Lin, K.J.; Tan, J.; Zhao, L.; Karim, K. In the name of charity: Political connections and strategic corporate social responsibility in a transition economy. J. Corp. Financ. 2015, 32, 327–346.
  40. Rauf, F.; Lelia Voinea, C.; Bin Azam Hashmi, H.; Fratostiteanu, C. Moderating effect of political embeddedness on the relationship between resources base and quality of CSR disclosure in China. Sustainability 2020, 12, 3323.
  41. Barreto, M.d.S.B.S. Positive and Negative Effects of CSR: The Case of Disabled Workers Integration in the Portuguese Context. Master’s Thesis, Universidade Católica Portuguesa, Lisbon, Portugal, 2020.
  42. Friedner, M. Deaf bodies and corporate bodies: New regimes of value in Bangalore’s business process outsourcing sector. J. R. Anthropol. Inst. 2015, 21, 313–329.
More
© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.
Upload a video for this entry
Information
Subjects: Management
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Jiaqi Jing
,
Xiaoqing Feng
,
Jianbo Song
,
Boya Li
View Times: 827
Revisions: 2 times (View History)
Update Date: 18 Jul 2022
Table of Contents
    1000/1000
    Hot Most Recent
    Video Production Service
    Feedback