A major obstacle to the provision of health services is lack of an effective workforce. Human resource management (HRM) can improve the effectiveness of the workforce, though this is difficult in large bureaucratic organisations. Decentralisation is a common reform strategy and this paper sets out to examine whether HRM would be improved in decentralised settings. Indicators were developed for three areas of HR outcome: (i) appropriate staff numbers, with (ii) appropriate skills and experience, providing, (iii) appropriate inputs to organisational performance. An attempt was made to link these human resource (HR) outcomes to relevant HRM actions in two counties--one richer and one poorer--in Fujian Province, China. One general county hospital and 5 township health centres were selected for study in each country. A health facility-based survey collected information on characteristics of the workforce and staff surveys identified changes in the management of human resources and staff inputs to performance before and after decentralisation. Whilst some benefits were identified from decentralising HRM, the complexity of the decentralisation itself, and other external pressures coupled with inadequate capacity building meant that some HRM actions were not always aligned with health service objectives. Better planning and preparation coupled with strong monitoring would increase the chances of decentralisation improving HRM in the health sector.