Reward Systems And Incentive Effects Of State Enterprises

How to push the reform in the state-owned enterprises to a higher level is currently a very hot issue. In the reform, the problem of how to determine the pay of the managers in the state-owned enterprises is extremely sensitive and cannot be neglected. It is so hard to quantify the labor of the managers of these enterprises that it is much more complicated to determine the pay to them than to other employees. Therefore, how to determine their pay is one of the most important tasks in the reform.In the course of the shift from a planned economy to a market one, making constant adjustments of the payment system of the managers in these enterprises is very essential. Up to now, however, an effective and efficient payment system of the managers has not taken shape. Fortunately, a careful analysis of the make-up of the pay to the state-owned enterprises' managers leads to the finding of such problems as lack of creativity in the payment system related to the managers in most companies, its single structure and inability to fully arouse the enthusiasm of the managers, more attention paid to the short-term achievements rather than the long-term ones, the divorce of the pay to the managers from their performance results in quite a few enterprises, too low pay to the managers, and the failure to consider the rewarding for excellent work when changing managers and so on.Based on the above problems, the payment system concerning the managers of higher level in foreign countries and the actual situations in our country, this paper presents a creative design for the payment system of the managers in these enterprises. First, it theoretically analyses the make-up of the pay of the managers of the special human capital in the state-owned enterprises, and then, after a careful study and analysis of the design principle on the payment system and the choices of the performance evaluation indicators, it demonstrates a creative design plan for the payment system related to the state-owned enterprises' managers. In this system, astock option rewarding mechanism is introduced, and some adjustments are made in the make-up of the pay of the managers in those state-owned enterprises which have not been shifted into stock companies or those which have been shifted into stock companies but have not been listed on the stock markets and intend to gain the maximum profits. The system combines subtly the rewarding mechanism with the ownership mechanism and clearly expounds such a comprehensive problem as the short-term and long-term rewarding mechanism of the managers in the state-owned enterprises. Besides, it puts an emphasis on the multiple make-up of the managers' pay and the fact that different enterprises should take different payment system according to their actual situations.In the last part of the paper, a summary analysis of the implementation strategy of the payment system is made in order that the system can be implemented and produce some more stimulating results.