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Study On Incentive Of Top Managers Based On Implicit Value Evaluation

Posted on:2006-03-08Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y H YaoFull Text:PDF
GTID:1116360155962687Subject:Business management
Abstract/Summary:PDF Full Text Request
It is extremely important to encourage the top managers effectively, who are the key resources in the enterprises, because there exists principal-agent relationship and the uncertainty in working process and its results. Based on the theories, such as human capital theory, principal-agent theory, demand theory, housekeeper theory, entrepreneur theory etc, this paper divides the top managers' demand into implicit and obvious demand, and puts forward the implicit value concept. It also introduces the implicit value assessment and implicit demand into the study on the incentives to the top managers. It explores the encouraging issue of top managers on a new visual angle.The demand is a precondition of the encouragement. Only when there exist demands, can incentives be made possible. This paper has analyzed the demand elements and put forward the theoretical supposition according to the heterogeneity characteristics of the top managers. It comes out the conclusion that the implicit demands such as the organizational environment, personal growth and the achievement etc, are the most urgently leading demands of the top managers'. And the demands of the top managers emerge differences because of the different biography characteristic.The incentives in the Chinese enterprises now mainly are the following forms: yearly salary system, option income, welfare and on-the-job consumption etc. According to the existing investigation and analysis, we can learn that the salary encouragement and operations performance are not correlative. And the effects of motivation modes on top managers now are not remarkable. The following are problems of the present incentive modes:(1)The single salary motivation failed in improving operation performance; (2)There are differences between the present motivation modes and the top managers" demands; (3) The current incentives principally rest on personal achievements, the implicit value of top managers has not been considered in the distribution of corporation income; (4)There is irrationality in the design of the existing incentive mechanism, such as income structure and contents.According to the potential and hidden characteristics of the top managers, the paper has designed a set of non- financial evaluation index systems by adopting the factor analytical method which has drawn the assessment elements of the implicit value of the top managers with the help of the statistics software used on the data obtained from the questionnaire investigation by empirical research and statisticalanalysis. The paper also puts emphasis on the implicit value of the top managers and tries to avoid the disadvantages of the monetary metering method based simply on performance or cost by putting the psychological quality and knowledge accomplishment, managerial ability and flexibility, personal experience and know-how and other key elements into the value evaluation index system. It measures the top managers' value by the multi-level blurring comprehensive appraisal method according to the multi-hierarchical structure of the index system.The utility of the top managers is made up of two parts: one part is from the monetary income and the satisfactory from the personal society reputation and the control to the resources of the enterprises: the other part is from the implicit demands such as the environmental support, the enhancement of the intelligence and competence, personal growth and achievements etc. Taking the maximization of the utility of the top managers and the yields of enterprise as the target, the paper designs the optimal incentive combined model based on the implicit value and demands of the top managers on the utility functions of the top managers. Therefore, the model indicates that the incentive based on the implicit demands and value for the top managers is considered, which can also satisfies the utility of the owners and managers at the same time. According to the model, the combined incentive model is put forward, which includes annual salary design on the implicit value, bonus and stock based on the performance, non-monetary incentive based on implicit demands. The model breaks up the limitation of the traditional single monetary incentive.This paper tells us that the incentives based on the implicit value like the competence of the top managers can have better performance than that based on the obvious value like the performance of the top managers. It also tells us that the influence on the performance from the implicit demands like learning and growth is greater than that from the incentives based on the obvious demands like the material compensation. The biographic characteristics have some effects on the performance of the top managers, but it is not obvious enough. Therefore, it is suggested the enterprises should consider the implicit value as the incentives to the top managers. The combined model should be adopted, which combines the implicit incentives as the main stream and the obvious incentives as the supplementary.
Keywords/Search Tags:Top managers, implicit value, implicit demands, value evaluation, incentive
PDF Full Text Request
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