Managerial Puzzles And Reengineering In Compensation For Tongyuan Petrotech's Intellectuals

In the 21st century, people enter into a new era of economics with theempowerment of knowledge. Only depending on continuous innovation, could theenterprise stand on an invincible position in the furious competition. As theowners of the knowledge, intellectuals are the major author of the enterprise,which determine the high-tech firm's leading fate in the market. In the final, it'sthe intellectuals that take the charge of the realization of the competitions amongenterprises, recreation, utilizing and increment of the knowledge and reasonableconfiguration. Therefore, it has been important task in modern management ofenterprises to manage and incentive the intellectuals.Tongyuan Petrotech is a civil-operating high-tech enterprise, whereas themajor power, the intellectuals'management ,has little incentive function for itsweak compensation policy, which brings about the crises of human resourcemanagement and productive efficiency in firm's long-term development. As far asthe Tongyuan Petrotech company is concerned, formulating the new, justice,scientific and competitive compensation management system is not only thequestion of holding the balance to achieve the competitive edge, but also thequestion in the face.In this paper, according to make the research of compensation management formodern enterprises, the writer made a deep analysis of status of the originalcompensation regulation and the problems aroused by it, such as employees left,human cost increased and enthusiasm contused, which led to the a series ofpuzzles in management. By reengineering the compensation policy, the writerformulated a broad banding system to conduct the competency-based payregulation, providing the total solution for above enterprise crises to incentive theintellectuals.In structure, the writer takes the steps of raising, analyzing and solving theproblems in whole paper, including four parts as following: 1) The introduction ofthe original compensation policy with its problems; 2) Theory research aboutcompensation management; 3) Compensation policy research about intellectuals;4) Compensation reengineering for Tongyuan Petrotech and attachedQuestionnaire Survey on Pay Satisfaction.In first chapter, the writer described the problems of original policy in the firm.First, the situation introduction about the firm's background, structure and staffing.Second, stating the status of the original compensation policy .In that policy, paystructure is established on the basic and merit pay. As to basic pay, Petrotechconduct the position wage and market wage for different employees, whilegranting the final-year bonus, by which summary the problems invoked inmanagement running as: 1) the internal injustice existed in the pay policy, whichresulted in being lack of competition. 2) there is little room for new employees togrown-up; 3) the firm is facing the stress of higher human cost and lessachievement; 4) the bonus policy is not able to answer for the performanceappraisal requirements; 5) the original pay policy has been the choke point forintellectuals recruitment. Based on these problems, the writer analysis themanagement puzzles by the theory of the Repeated Games , which get the resultthat only with the higher pay, could the intellectuals spend more efforts. Once onepart deviates from this way, the trade-off will turn to the inverse of less pay withless efforts. To this end, there is only one way for Tongyuan Petrotech toreengineering the compensation policy with following principles: 1) realizing theemployees'value efficiently; 2) achieving the aims to incentive the intellecturals;3) keeping the compensation in the position of competitive in the market; 4)effectively controlling the human cost; 5) cooperating with execution of theperformance appraisal system.The second chapter is refer to the research on compensation managementtheory. At first, the definition and classification of the compensation, especiallythat the scope of the compensation policy in this paper is only related to the basicpay in direct compensation. And then introduce the functions of the compensationas maintenance and incentive function to employees, performance function toenterprise and the regulative function to social labor.In the last part of the second chapter introduce the different compensationmodes in practical, including compensation on position, compensation onperformance, compensation on skills, compensation on market and onworking-age. According to compare to the flexibility, advantage and disadvantageof each mode, the writer lays a foundation for configuration of the compensationmodes.To set up the theoretical groundwork and main points of intellectuals', Thethird chapter makes the theoretical research on intellectuals'compensationmanagement. Firstly, describe the definition and scope of the intellectualemployees, specifying the characteristic of the intellectuals. Secondly, based onthe definition and characteristic, mainly analyzing the theory of the broad bandingcompensation policy, presenting the processes of the design: 1) Formulating thecompensation strategy ground on enterprise and HR strategy of the firm, basingon the relationship between the enterprise life cycle and compensation strategy. 2)Job description accompany with position evaluation. 3) Make a selection of thetitle and series of classification applied in the broad banding system on the resultof step2. 4) Formulate and perfect the company's pay policy. 5) Control and adjust.Thirdly, the writer described the significance of the broad banding compensationsystem to incentive the intellectuals in detail: 1) enhance the competitive andability to cope with emergency for enterprise. 2) effectively realize the incentivemeasure to employees. 3) in favor of the improvement of the whole enterpriseachievement.Chapter four is the major part of the whole paper, in which the writer conductsthe reengineering of the Tongyuan's compensation policy based on theoreticalresearch on chapter two and chapter three under the six principles of justice,...