State-run Global Times and many other dailies carried pictures of more than 10 men wearing shorts running in cold weather on a highway in Chengdu, the capital city of China's southwestern province.
Accompanying them were several female colleagues who wore thin clothes, Chengdu Business Daily reported.
Chen, an office administrator at a food company, said the employees were being punished for falling short on their performance objectives.
They all worked in the marketing department, she said.
"We formed an agreement [with the employees] in the beginning of 2012. It stated that whoever fails to reach the goal must 'streak' on 3rd Ring Road," the Hong Kong-based South China Morning Post quoted her as saying.
According to the agreement, women would run five km, and men would cover 10 km wearing only shorts, Cheng said.
More than 20 employees went out into cold on Monday, when temperatures were as low as 11 degrees.
"It was so cold that I had goosebumps at the beginning... But I got warmed up after the run," said one unlucky salesman.
"No punishment of any sort from performance evaluations should infringe on employees' rights," lawyer Liaohua told the business daily.
But he said he had never received complaints over such cases before.
Most of the employees said they accepted the penalty because they had agreed to it earlier.
"The only thing that made me uncomfortable was the weird looks from passersby. It was a little embarrassing," another employee said.
Nevertheless, he also said the punishment motivates workers and was all in good fun.