The Design Of Enterprise Senior Managers' Compensation Based On Human Capital Value

As an important part of the enterprise human resources management, a well-designed compensation program will help them developing and growing up. China's economic reform has gone through history of more than 20 years, and also the modern enterprise system framework has been largely built up. However, the executive compensation design level in our country can not reach the request of the market economy. The problems we should solve in executives compensation design mainly appear in such aspects, for example, compensation structure and compensation distribution basis and pay incentives and so on. Based on the analysis of the process of the executives human capital'value realization, we get understand the intrinsic link between human capital value and compensation, and try to design a executives compensation program from the perspective of human capital value.The main conclusions of this paper are as follows:(1) The executive compensation, which based on the value realization of human capital, can be divided into three parts:basic compensation, short-term incentive compensation and long-term incentive compensation. The basic compensation, which is consist of basic wages, social security and allowances, is to meet and guarantee the basic livelihood of executives; short-term incentive compensation mainly reflects in performance bonuses, including individual performance bonuses and team performance bonuses; long-term incentive compensation includes stock incentives, and personnel exploration.(2) Value stock is the basis and premise of human capital value realization, which is reflected in two aspects:First of all, from the perspective of the executives, they should exchange their value stock with enterprises; Secondly, from the perspective of enterprises, they need to offer a reasonable compensation to attract high-level talents, however, this reasonable compensation is basic compensation. Thus, the design of basic compensation is based on the value stock of human capital. Human capital value stock is an intrinsic value, which is accumulated from previous education or training, it appears as knowledge, experience, skills and so on.Combining enterprises practice and study of management, the author set five appraisal indicators of basic compensation as follows:qualifications, work experience, industry experience, generic certificates, as well as professional skills. (3) Short-term incentive compensation is corresponding to the process of value creation, which is appraised on the value that the executives have created for the enterprises during their work. Value creation is mainly embodied in the output of performance, so short-term incentive compensation is designed on the basis of the executives' personal performance and team performance.(4) Assessment of long-term incentive compensation is based on the future value, which will be created in the next round of value realization. Value stock of human capital will increase after a round of value creation, so the enterprises should make a kind of incentive compensation to retain and motivate them to enter the next round of value creation, that make them create more value.