China Telecom Group Headquarters Staff Incentive Mechanism

After a series of restructures of the telecommunication industry system in China through divesture, separation of enterprises from administration and spin-off into two independent entities along the Changjiang River, there emerge seven large telecommunication operators, and the human resource competition in this market becomes increasingly fierce, especially in the area of talented personnel, as foreign telecom operators will enter into this field in different stages after China's entry into WTO. Facing this strong tendency, the goal of this paper is to make the current incentive mechanism of the Headquarters of the China Telecom Group more perfect, enhance its employees'enthusiasm and working efficiency, and retain its key personnel in the intense market competition as well. Based both on theories such as Maslow's Needs Hierarchy Theory,X theory, Y theory and expectancy theory etc. and on many interviews with staff from the Headquarters of the China Telecom Group and other enterprises, and by carefully examining the current material and non-material incentive measures adopted by the Headquarters of China Telecom Group, this paper identifies some major incentive mechanism problems including lack of post analysis and planning, unreasonable salary structure short of transparency and fairness, inefficient stock options unlinked to individual achievement and performance, the asymmetry double-channel promotion mechanism, less dynamic on-job-training method, and lack of objective criteria in performance evaluation, etc, to name just a few. The author aims at providing some operational solutions on the above-mentioned problems and issues. The key focus of this paper is to further study the incentive mechanisms of the Headquarters of China Telecom Group, therefore a better reform plan and constructive suggestions are pointed out primarily in material incentive aspect such as salary system reform in order to widen the wage ranks and establish post-appraisal system. In addition, the enterprise welfare policy must have preferences inclining to the employee who makes prominent contributions and the scope of stock appreciation rights must be enlarged and tied up to the employees'performance. In the non-material incentive aspect, the author puts forward suggestions such as the enterprise culture and education training stimulation, taking vacation with wages and paying more attention to employee career planning and development etc. The author suggests three innovations on the new incentive mechanisms of the Headquarters of China Telecom Group. Firstly, the Chinese telecommunication employees are divided into four layers according to their ranks and contributions, such as decision-making layer, backbone layer, Implementation layer, maintenance layer, at the same time, they are also be divided into seven categories from A to G according to their different positions, degrees, ages, knowledge structure and contributions. According to the four layers and seven categories of employees, those key employees could easily be identified. Secondly, according to the Maslow's Needs Hierarchy Theory, the customized incentive measures targeted at employees falling into different categories and with different needs are set up. Thirdly, a broad-boundary incentive package is proposed so as to provide more room for employees to be motivated.