Name: Sneha Bagde

Roll NO: 1941 CMBA2Y3

Module: NTIB
Module Leader: Dr. Raja Roy Chaoudhary

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Q. Critically examine the impact of machine learning in HR processes keeping into
account the Chinese Social Credit Score System and how would this impact the future
workplace.
What is Data, Big Data and Machine Learning?

Data is separate pieces of information, usually configured in a specific way. All software is
broken down into two broad categories: data and programs. Programs are sets of the data
processing instructions. Data may exist in different ways — as numbers or text on paper parts,
as bits and bytes stored in electronic memory, or as information stored in the mind of a human.
Data is information in computation which has been converted into a form that is effective for
movement or processing
Big Data:

The word big data is given to gathering voluminous, conventional, and digital data which are
sources of discovery and analysis. It is data that includes greater variety arriving at ever-
increasing volumes and velocities. This is known as the three Vs. Simply put, big data is bigger,
more complex data sets, particularly from new sources of data. A common concept describing
databases too large to be stored and processed in a traditional relational database structure. The
word big data is ambiguous in this way — while size is certainly a part of big data, scale alone

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doesn't tell the full story of what makes big data large. Big data analytics allow us to discover
hidden patterns, unknown associations, trends, preferences and other knowledge that can help
stakeholders make smarter and more educated decisions. The conventional applications for data
processing simply cannot accommodate. Yet these large volumes of data can be used to solve
market problems you couldn't handle before. Big data can help you address a range of business
activities, from customer experience to analytics.
Machine Learning:

Machine learning is an artificial intelligence (AI) technology which provides systems with the
ability to learn and develop automatically from experience without being explicitly
programmed. Machine learning focuses on computer systems being created that can access data
and use it to learn about themselves. Machine learning exemplifies data mining concepts but is
still able to derive connections and learn to incorporate new algorithms through them. The goal
is to imitate the desire to learn in a human being by experience and achieve the mission
assigned without, or with little, external (human) support.
Machine learning is comprised of multiple strategies, much as with human learning. Stuff is
memorized at the simplest. Second, we learn from knowledge retrieval (reading, listening and
understanding new things). And thirdly, we are learning from context.
The Chinese Government is following the same principles as Big Data and Machine Learning,
the Communist Party as China (CCP) is using a institutional system known as the Chinese
Social Credit System.
What is Artificial Intelligence (AI) –
Artificial Intelligence (AI) refers to the techniques used to perform a task that requires some
degree of intellect. To put it another way, a machine trained to do what a person would do.

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AI is very distinct from any other apps. Three main components — high-speed computing, large
amounts of quality data and sophisticated algorithms distinguish AI from ordinary software.
Using an algorithm that links quality data to fast computing resources, key AI technologies
provide greater accuracy and reliability for daily processes.
Role of AI in HR: AI provides substantial incentives for optimizing HR processes, such as self-
service transfers, recruiting and talent development, accounting, monitoring, access policies and
procedures. AI influences our company tremendously, and how we conduct our company.

Effect on Machine Learning (ML) in HR: Corporate enterprise, like all facets of technology,
is transforming the way of operation and working and this extends to all divisions of an
organization and Human Resource is no longer the exception. Just because the term Human has
been inserted in the technology cannot make it more valuable.
What is Chinese social credit score system?
An effort to develop a database for real-time surveillance of business, citizen, and government
activity throughout the world.
This program would use Big data as per the Chinese government to create a high confidence
environment where individuals and organizations can obey the rules. This operates on a basis
where we can give social credit ratings depending on their actions to and person, which is
converted into a series of rewards and punishments.
Chinese authorities officially unveiled it in 2014, the initiative has gained substantial coverage
in international media because of its ability to track the regulate individual behavior. This also
reflects on ties with each human resident, as well as two other classes. There is one scheme of
social credit for individuals, one for corporations and other organizations, and one for members
of government. The key aim of the social credit program is to track and evaluate the
trustworthiness of each entity, particularly when it relates to following legislation and other
laws.
It mainly applies to creditworthiness for people in a similar manner as how the credit ratings
work in Western nations. Although the program can be exploited, its key aim is to address
China's dilemma of being a low confidence society with minimal credit knowledge for each
person.
How does it Works?
It gathers, aggregates, and analyzes enterprise data to create a score that determines rewards and
punishments. The goal, ultimately, is for the government system to be country-wide, with
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companies having a "unified social credit code" and citizens having an identity number, all
linked to permanent record. "When you go to a website for credit China and have the credit
code of an individual, you can key it in and call up credit records," Hoffman says. "Individuals
would have ID-linked codes," she says, "it is less of a ranking, and more like a record.
Some sources talk of a blacklist; that's part of the official government social credit scheme,
which means you might forfeit your assets if you owe the government money, for example.
There's a distinction between having a poor social credit score and being officially blacklisted,
such as failing to pay a fine.
The parameters that fall with a rating of social credit depend on where you are, notes Ohlberg.
"It's by which place you're in, because they have their own catalogs," she says. It can range
from not paying penalties because you are deemed entirely capable of doing wrong on a train,
taking a taxi or running a red light

Pictorial Description of Chinese Social Credit Score system working:

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How can this be used in HR?

Human Resource Management (HRM) is the term used to describe structured processes
developed within an organization for handling employees. As such, HR managers are the
professionals responsible for attracting, motivating, and retaining the most qualified talent by
directing the administrative functions of the HR department. A human resource manager’s duty
fell into four main areas:
1) Employee compensation and benefits
2) Defining/designing work. 
3) Staffing
4) Maintaining a balance between employee and organization.

The Chinese Social Credit Score Program model can also be used extensively in HR. Since
Chinese SCS uses big data and machine learning to gather data and create trends for decision
taking and assessing individual and company social status, companies may use the same
identification and training models to assess employee behavior.

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Why is China building this?
It's more about developing trust, the Chinese Government says. The 2014 paper outlining the
plans of the government states that as "confidence-keeping is insufficiently paid, the cost of
losing faith appears to be small." And Chinese society has problems with confidence, says
Ohlberg, whether it is food safety controversy, waste, or employers who do not pay their
salaries. "But the program can also be used to enact ambiguous laws, such as placing national
security or stability at risk," she says. Zeng says that food safety and product quality should be
included, which are major issues in the region. "In Chinese culture, that's a huge concern," she
says. "We prosecute companies for this kind of unethical behavior."
Besides, it might help create alternate sources of financial capital, Ohlberg notes, because many
people in China live outside of banking structures, and they don't have a trustworthy credit
record. "Many of the earlier social credit pilots accompanying the new policy proposal released
in 2014 were already developing a countryside social credit program," she says. "Many people
there wouldn't have financial banking data on them." Businesses should even use a social credit
scheme for micro-enterprises, which couldn't be measured by conventional standards.
Social credit is a tech-enabled way to connect political control to social and economic growth
that has been debated in the country since the 1980s, an extension of the Mass Line of
Chairman Mao — a concept to explain how the leadership of the party influenced and
controlled society. "The Main Line in Mao's China focused on political main agitation, using
the personal charisma of Mao Zedong to compel participation," Hoffman says. "The CCP could
no longer, after the Mao era, rely on ideological mobilization as the primary tool for
operationalizing social management."
How Chinese Social Credit Score System and how would this impact the future
workplace?
Many aspects of the social credit scheme are currently in place nationally, while others are
decentralized and small (there are about 40 pilot programs run by city governments and at least
six operated by tech companies including Alibaba and Tencent).
China's social credit scheme has been dubbed "An Orwellian scheme premised on regulating
nearly every facet of human life," by Vice President Mike Pence of the United States, but it has
a strong degree of popularity among the Chinese.
Kostka conducted a survey in 2018 with 2,209 Chinese citizens, revealing that a whopping 80%
of respondents said they approved of the government implementing the social credit system.
Only 1% reported a moderate to strong level of disapproval. “The reason is that they really see
it as a tool that can close regulatory and institutional gaps,” says Kostka. “Chinese people are
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less fearful of technology than in the West and they’re already used to the public security
bureau collecting their personal data.

"The credit system's economic side is very unequal to the poor, since it is related to demand. It's
better to get a higher score if you drink a lot, but if not then it's difficult to do so, "says Kostka.

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"The incentives also aren't always beneficial, particularly for rural people. A lower deposit in a
hotel and quicker processing of a visa is not important to a farmer."
Conclusion:

There is great scope in the field of HR with the addition of machine learning for their
processing, also the Chinese social credit system should utilize this opportunity. This would be
very beneficial to implement a social credit rating program at HR. This would add to the
company a more entrepreneurial attitude and passion for greater results but also openness.
Together, artificial learning and data analytics can maximize the value of both an individual and
company in the longer term. As the world is subsequently advancing day by day and there is
need to adopt machine learning to sustain and compete in the market.

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