The Research About Professional Managers Incentive Mechanism Based On Implict Contract

With the separation between ownership and management in enterprise, one of thespecial social classes--professional managers have emerged as the times demand and isgradually becoming the main force in society. Especially, the intense competition ofenterprises, caused by the information and the diversity and variability of the marketdemand, have made the professional manager which is an important part of humanresource plays a more and more prominent role in the enterprise. Further more, theprofessional manager, as compound talents, is extremely crucial to the rise and decline ofthe enterprise. At the same time, with the gradual maturity of market economy, it is ofgreat significance to establish and improve the professional mechanism which isimportant for the survival and development of enterprise.At present, however, there are more researches on explicit incentive mechanism ofprofessional managers, but less on implicit incentive mechanism. Although explicitincentive is widely used in the enterprise, since explicit incentive mechanism inflexiblyfollows basic assumptions from traditional economics "economist" and according tomonetary diminishing marginal utility theory, its effect is far from what is expected. Asto these "elites" professional managers, it is just one aspect to pursue expensive materialreturn, but more demands are to realize themselves; as a supplement, implicit incentivemechanism can satisfy spirit incentive demand of professional managers. This papertakes the professional managers---such a special group as the research object. In thisthesis, based on the previous research, and the combination of the qualitative and thequantative analysis, the informational economics, fairness preference theory andincentive theory, are used to discuss the incentive mechanism of the professionalmanagers.This paper takes the principal-agent relations between the owners and theprofessional managers as the breakthrough point, analyzes incentive model of theprofessional manager, and builds compensation incentive model and stock optionincentive model based on the agency theory, and obtained the influence factors whichaffects the work of the professional manage. Thirdly, in the condition that there is anincome gap between the manager and the enterprise owner, this thesis brings the fairnesspreference of the manager into the principal agent model in the third chapter; moreover,discusses the generated implicit incentive caused by the income gap. Through modelanalysis, the writer argues that the new contract can make the manager increase theirlevel of effort, and bring about a better incentive effect, and can render the owner’s expected utility reach Pareto optimal if the fairness preference has been taken into theconsideration. Finally, this paper brings up some suggestion about the incentivemechanism of the professional manager. The writer maintains “reciprocity” is aneffective way to establish a constructive relationship between owners and managers inboth benign and precipitate the sustainable development of the enterprise.