Artificial Incentive Contract In The Organization The Incompleteness Explore

When a person's benefit is influenced by the motion of another person, the former need to consider how to make the latter's motion be more advantageous to himself, which produces the incentive question. However, since the economics becomes a scientific discipline, economists have paid more attention to the operation and the efficiency of the market mechanism that is naturally formed for a long time than the incentive contract designed by an organization. Although the basic thoughts of incentive widely appear in many fields of the economics in the nearly two centuries, a special research field of the design and the implementation of the incentive contract has not been developed until it comes to the nearly 30 years with the production of the research technique and the emerging economic branches including the new system economics, the information economics, the game theory and so on. In the newest economic research achievements, the incentive theory under the frame of the principal-agent theory is the most important.The incentive theory under the frame of the principal -agent theory discusses how to solve the question of the moral hazard and the adverse selection in case of asymmetric information, which is based on the hypothesis that each person is an economic person. However, in the real life, the person is a complex person, so his behavior is not firm. A person's behavior not only receives the control of "the economic person", but also receives the influence of the social environment and his own psychological activities. Therefore, it is not enough that we take the principal-agent theory as the only theoretical foundation while researching the incompleteness question of the incentive contract. The organization need to consider the characteristics of the human capital, the person's sociality as well as the person's psychological activities when it designs its own incentive contract. Based on this understanding, the author finds how to begin with this paper, that is to say researching the incompleteness question of the incentive contract from the new angle of the integration of the sociology and the psychology into the economics.This paper's main idea is : on the basis of the related research of the incentive theory around the world, beginning with the enterprise contract theory, the agent theory, the human capital theory, the social capital theory as well as the psychological incentive theory ,the paper researches the relationship between some factors ,which include the goal of the person who gets the incentive, the relation between the motion and the result, the inspection of the product quality and the process of honoring the agreement, and the incompleteness of the incentive contract, then emphasizes that the organization culture is a useful supplement to the incompleteness of the incentive contract. Therefore, the paper has nine chapters.Chapter 1 briefly presents the research goal of this paper, comments some fundamental research achievements, and introduces the basic content and usable main research technique of this paper.Chapter 2 summarizes the enterprise contract theory, the agent theory as well as the human capital theory in order to provide the economic foundation for researching the incentive contract in an organization, simultaneously elaborates some psychological experiment achievements including the social capital theory, the reciprocal benefit behavior, the social approval and the special duty for supplying the sociological and psychological science to researching the incentive contract in an organization.Chapter 3 introduces the origin and the development of the contract, analyzes that the contract's incompleteness is induced by the behavior person's limited rationality, the asymmetrical and incomplete information, the transaction cost and the indefinite factors, and then explains that it is doomed to be incomplete when we take the incentive contract as one kind of contracts in an organization.Chapter 4 elaborates the incompleteness reason of the incentive contract designed by an organization from the limited angle of the personnel's goal multiplication and the limited incentive form. On the one hand, the goal of the person who gets the incentive is multiplicative, different persons have different needs. On the other hand, the incentive theory takes "the economic person" as its premise in the economic science, and supposes that the person who gets the incentive only pursues the maximization of cash income. This causes that currency reward incentive system becomes the main part of the economic incentive, and constitutes contradiction between the goal multiplication and the incentive form limitation of the person who gets the incentive.Chapter 5 summarizes the incompleteness reason of the incentive contract from the indefinite angle of the relationship between the motion and the result. The foundation of the incentive payment is inspecting achievements, which are based on the motion result. In the real life, the relation between the motion and the result is indefinite. On the one hand, the employee's motion is not been adequately observed, specially the examination and surveillance of the exertion's quality and work manner. On the other hand, the result is influenced not only by the employee's motion but also by other factors which the employee is unable to control and the appraisal methods of the achievements. The unanimity between the motion and the result causes that the motion result is not only decided by the motion. Then the motion of the person who gets the incentive will deviate maximum efficiency as the organization carries out its incentive contract which is based on the motion result.Chapter 6 presents the incompleteness reason of the incentive contract from the inspection angle of the product quality. This chapter supposes that a person's motion and result is consistent, and then the organization designs an incentive contract of the motion result in order to examine the quality of the person's motion result. But the quality inspection of the motion result faces a variety of questions, such as inspection dimension, inspection cost, inspection time as well as representative inspection in the sole product quality, and also faces whether the employee can correctly assign the time and the energy when he need to carry on many kinds of activities in the added product quality. Moreover, the inspection of the product quality may meet with the decomposition question of the team products. These things in the inspection of the product quality inevitably affect the completeness of the incentive contract.Chapter 7 analyzes the incompleteness reason of the incentive contract from the angle of the questions which exist in the process of honoring the agreement. The implementation of the incentive contract plan is decided by the person who gets the incentive response to the incentive contract. This requests the person who gets the incentive has the full comprehension faculty and the computation ability, and can accurately digest the contract plan in his own way. However, as a result of limited rationality, the person's cost of understanding the complex incentive contract is extremely high. This misunderstanding over the incentive contract can make the motion of the person who gets the incentive be away from the designer's hope, and get the deviation in the execution of the contract, then cause some difficulties in the process of honoring the agreement, such as the opportunism behavior-"fleece", property special-purpose as well as court execution difficulties. Moreover, the execution of the incentive contract will increases the influence cost of the organization.Chapter 8 explains the make-up function of the organization culture to the incompleteness incentive contract. The effect of the currency reward incentive can not be compared to that of the organization culture that contains the spiritual culture, the system culture and the material culture. This chapter summarizes the concept and the incentive function of the organization culture, compares the incentive effect of different factors of the organization culture, and confirms the importance of trust to an organization from the experimental angle.Chapter 9 induces and reorganizes the basic conclusion of this paper on the basis of the front research, and points out the main questions of this paper that have not been studied yet.The paper tries its best to discuss the incompleteness question of the incentive contract designed by a microscopic organization from the cross-discipline angle. Moreover, the main consideration of this paper is the incentive to the common staff not to the management level in an organization. A famous historic professor said if the leadership is a boat, and the staff are water, the force of the water not only carries the boat, but also can make the boat capsized, so the author hopes the research results of this paper are helpful to provide more effective consultation information about designing and choosing more reasonable incentive contract in the practice.