Internal Incentive System Research Of State-Owned Domestic Joint-Stock Commercial Bank Based On Optimal Combined Reward

At present, domestic emerging joint-stock commercial banks and many foreign banks entering into China, by their effective incentive system, greatly attract senior management officers and technical talents of state-owned domestic joint-stock commercial banks, and state-owned domestic joint-stock commercial banks have become their "talents training bases" and are facing great threat. The main reason of such matter is that internal incentive system is not consummate. No talent, sustainable development of state-owned joint-stock commercial banks will be impossible. Therefore, internal incentive system applicable to domestic state-owned joint-stock commercial banks shall be developed as soon as possible.First, from incentive theory and entrepreneur optimal reward contract design theory based on "principal-agent theory" and HR theory, this topic presents theory basis for developing internal incentive system of state-owned domestic joint-stock commercial banks in detail; secondly, introduces successful cases of Citibank, HSBC and UBS Group about developing internal incentive system. Their experiences sufficiently approve that effective internal incentive system is the key of bank governance; and then deeply analyzes existing problems and their reasons in internal incentive system of domestic state-owned joint-stock commercial banks from several aspects; and based on the above-mentioned contents, this topic suggests that position rank system centered with position value is the foundation to develop internal incentive system of state-owned domestic joint-stock commercial banks, introduces "all-round salary" concept, and develops a frame of internal incentive system of state-owned domestic joint-stock commercial banks based on optimal combined salary contract. Finally, to different demands of all kinds of employees, this topic presents corresponding incentive priorities, and presents optimal combined reward contract designs respectively for operational managers and employees. Furthermore this topic states: to operational managers, middle or long term incentive shall be first, and short term incentive shall be second, thus they may actualize maximum profit of bank as well maximizing their own benefits; to employees, short term incentive shall be first, and middle or long term incentive shall be second, thus on the basis of satisfying their lower demand level, their pursuits to high demand level will be stimulated, and their developments will automatically connected with developments of the banks. Based on optimal combined reward contract, this topic researches and analyzes developing internal incentive system of state-owned domestic joint-stock commercial banks. This topic tries its best to integrate theory with practices, to develop an internal incentive system with rather strong practicability and applicable to the characteristics and actual demands of state-owned domestic joint-stock commercial banks, especially, strives for breakthrough on performance appraisal model, long-term incentive, and flexible combination of short-term incentive and long-term incentive.