Research On YZ Corporation's Compensation Optimization

To mine more profits,and to make the best use of every employee,a suitable compensation system is critical for enterprises.It can effectively distinguish employee value and evaluated employee contribution objectively,give good employees direct motivation,and eliminate incompetent ones indirectly,and maintain stable and healthy internal atmosphere for organization in long-term.On the contrary,unsuitable system will deviate from the purpose of distribution according to contribution.It's detrimental to organizational unity,which could brought brain drain,damage enterprise's development.YZ company is a state-owned grain industry enterprise,affiliated to HNYL Group,which is owned by government of He Nan province.The corporation was founded in August 2014,headquartered in Zheng Zhou,main business scope includes:breeding ? producing ? managing ? marketing of crop seeds,farming management,marketing of agricultural products,storage ? purchase and sale of crops.The corporation is a unit member to He Nan collaborative innovation center for grain crops under national “2011 Plan”,enjoying tax relief national and provincial special subsidies and other preferential polices.In Chang Ge,He Nan,it owns a15-thousand-mu-large seed breeding base,which produces grain seeds over 7.5million kg a year.With over 0.2 billion yuan worth of total assets,including80-million-yuan fixed assets,the corporation is fully capable purchasing a full-floor high grade writing building which is located right behind the provincial government compound in the central business circle of Zheng Dong District,the most valuable real estate section of the provincial central city.Among the 38 employees,22 of them own bachelor' degree or above,the corporation owns relatively sufficient human resource,low average employee-age and reasonable organization structure.As a typical state-owned traditional industry enterprise,YZ corporation suffers several characteristic issues in its compensation management.First,timeworn managing philosophy.Old-time planned distribution plays critical role,no room for distribution according to contribution,compensation does not link to employeevalue;Second,rigid employee evaluation standard.Without detailed,reasonable working process and jobs responsibility,employee work can not be evaluated objectively and clearly.Compensation level is positively correlated only with rank.A graduate with a master degree gains salary as much as a same-rank technical secondary school graduate,even less sometime;Third,unfair appraisal system.Old fashioned mutual scoring and manager's balance brings subjective,nepotism inevitably;Forth,disproportion.Executives' absolute income exceeds common employee too much,compensation of middle and senior manager possesses way too high proportion in total salary.Fifth,unclear compensation management positioning.No significant correlation with corporation's strategic planning,compensation management plays more important roles in employee insurance than employee distinguishing,employee objective income is lower than other corporation's in the same industry.By analysis of YZ corporation's various issues in compensation management,this paper tries to figure out solution to the current dilemma.First,organizational optimization.Then,definite responsibilities of all departments.After all these work above done,optimize the compensation system,establish regulations guaranteeing implementation of the new system.The optimization of compensation system of YZ do need reference from successful private enterprises.But,as a traditional state-owned enterprise,there still are some restrictions to be considered.One is “minimum wage standard” and “salary gap”set by provincial government.This means employee salary shall not grow significantly along with the sharp rising of the corporation's profits.Two is the corporation's duties in maintaining social stability and security of employee insurance.The corporation should try its best maintaining current salary level even while suffering huge loss.Three,which is the most critical point that,for the compensation system of YZ is originated from government departments' executive standard,ranks and positions still being important component in it.