Incentive Research Of Commercial Bank Manager

Modern banking is a high risk, knowledge-intensive service industry, determined by the characteristics of their industry, talent is the most important capital. So, its competitive advantage depends most on its talented individuals and high-quality talent team. Awareness of Western commercial banks is:quality service, high efficiency, high-yield comes from good people. As the knowledge of the talent is personal rather than banks, so only the implementation of the scientific management of talent and effective incentives, they would willingly to use their own knowledge and skills to contribute for the bank. With the further opening of the banking sector, foreign banks will gradually into the Chinese market, its advanced and flexible management system, as well as high-quality talent team and generous wage treatment will also attract a group of outstanding financial professionals. Because China’s state-owned commercial banks have long been protected by the government policy and the internal reforms have been constrained by a variety of systems, the overall performance a relatively low operating efficiency and management, it is difficult to carry out human resources with the field of international banking competition. The operators in the state-owned commercial banks plays an important role in business, its responsibilities and risks are bigger than the general staff of major, so they need more special incentives, and because of joining the WTO and under the current economic globalization, it is necessary to accelerate the establishment of a modern financial enterprise system and improve their competitiveness and efficiency.At present, the international community pays more and more attention on how to establish effective incentive and restraint mechanisms. Many countries are building a good incentive and restraint mechanisms to improve economic vitality and increase economic performance. A good incentive and restraint mechanisms are beneficial to the banking internal control management, it is a fundamental to achieve the performance of market-oriented institutions. The imperfect of the state-owned commercial banks incentive and restraint mechanisms and the lack of motivation, have been an major factor to impact the building of the ranks of state-owned commercial banks, it must be given adequate attention. Incentive and restraint mechanisms have become a key to the development of state-owned commercial banks. Putting forward a set of incentive and restraint mechanisms which suit for the state-owned commercial banks from China’s national conditions is a profound and significant value relevance research.Scholars at home and abroad have done a lot of research on incentive theories, but it is not too much research in competency perspective. The "ability" mentioned in this article mainly refers to the "competence". Human capital investment is the highest income and the most profitable of all investment. Organizational behavior considers that the performance is a function of ability and incentives, performance = f (ability×incentives), in the same level of incentive, their level of performance depends on the size of individual capabilities, and capacity can be improved by incentives and a series of measures. Therefore, it is essential to research the ability combined with incentives. It is the innovation point of this article, added incentives with capacity and combined bank incentives with human resources to construct bank incentives based on competency.This paper uses the method of normative qualitative and quantitative analysis to research. In the theoretical model, the main analysis theory and methods are Game Theory and principal-agent theory of economics theories, using qualitative and quantitative analysis to research.Logical structure and basic contentThe first part reviewed the research status of the commercial banks’ incentives theory, analyzed problems of China’s commercial banks incentive and restraint mechanisms.The second part showed some concepts like the manager, incentive mechanism, competence and asymmetry information.The third part showed two methods in the selection, the one is randomly assigned mode, the other is a mode of match the ability. Through analysis, I proposed some conclusions.The fourth part added the ability to analysis on the research of long-term economic incentive and restrictive mechanism model. To study the owner and operator of commercial banks to pursue their own utility maximizing behavior impact to the bank business activities under the incomplete information and asymmetric conditions.The fifth part first analyzed the positive and negative impacts which brought by the dismissal, analyzed the optimization problem of whether to fire the intrinsic manager.The sixth part of the article concluded the articles above, proposed the importance of the competence and recommendations of how to improve the ability and the steps of how to construct the incentive mechanism which under the competence model. That is the conclusion and expectations of the whole paper.Innovation of the paper1. The owner should use the mode of match the ability to choose the manager, then he will get a better expectation utility.2. There are more profits that the owner and manager gain when we add ability in incentive mechanism, so the principal should consider the competence.3. After analysis of adding the ability into manager changing mechanism, we know that the more efforts manager does, the higher evaluate of the bank will get, and there is some substitute effect between competence and effort.The drawbacks of the paper1.I should do more research on the method of measuring the ability.2. I only did some research on two-steps model, and not do research on multi-steps.3. The paper analysis on theoretical, it would be better that I can find some cases to research.