Study On The Motivation And Effectiveness Of Employee Stock Ownership Plan Implemented By Shanxi Fenjiu

State-owned enterprises are an important force to protect people’s interests,and deepening the reform of state-owned enterprises is a major task to achieve the goal of "two hundred years".According to the report of the 20 th Party Congress,the core competitiveness of SOEs has become a measure of their excellence and strength,including the mastery of advanced technology,high-quality human resources and continuous innovation.The improvement of the above indicators can be achieved through the incentive of employee stock ownership plan in the mixed ownership reform.Shanxi Fenjiu,the first state-owned enterprise in Shanxi to implement an employee stock ownership plan,announced its employee stock ownership plan program in 2018 as a breakthrough to enhance its core competitiveness.This paper takes Shanxi Fenjiu as a case study to analyze the motivation and effect of implementing employee stock ownership plan in state-owned enterprises.This paper focuses on the motivations and effects of the employee stock ownership plan in Shanxi Fenjiu.The literature review section is based on a review of the motivation,role mechanism,and implementation effects of employee stock ownership plans,which lays the foundation for the following research analysis.In the section of theoretical foundation and analysis,this paper first defines the concepts of mixed ownership reform and employee stock ownership plan,and then uses two-factor theory,employee subject theory,principal-agent theory,and technological innovation theory as the theoretical foundation to analyze the effects of employee stock ownership plan on improving governance to enhance corporate performance,enhancing innovation to enhance corporate performance,optimizing human resources to enhance corporate performance,and taking risks to enhance corporate performance in stateowned enterprises.This paper provides a framework for the subsequent research.Secondly,this paper compares the development history of employee stock ownership plan in China,analyzes the current situation of development,and then takes the implementation of employee stock ownership plan in Shanxi Fenjiu as an example to introduce in detail the background and motivation of the implementation of employee stock ownership plan in the case company,and analyzes the mechanism of the effect of its employee stock ownership plan on corporate performance around the case company.Finally,the paper uses market research method,financial index analysis method,and entropy method to evaluate the effectiveness of Shanxi Fenjiu’s employee stock ownership plan in the short term,long term,and comprehensive aspects respectively.Through a comprehensive analysis of the case of Shanxi Fenjiu’s employee stock ownership plan,it is found that,firstly,the motivation of the employee stock ownership plan is to improve the corporate governance structure,to stimulate the internal employees’ vitality,to improve the overall performance of the company,to cope with the fierce external competition,and to deepen the reform of state-owned enterprises.Secondly,the four mechanisms of the employee stock ownership plan are "reducing agency costs and improving corporate governance system","stimulating innovation vitality and improving innovation input and output","improving employee quality and optimizing corporate human capital","collaborating with employees at all levels and enhance risk-taking capacity";finally,after analysis,it is found that most of the indicators of profitability,solvency,operating capacity,and development capacity of the case companies have a significant upward trend,so this paper concludes that Shanxi Fenjiu has a positive impact in the market after implementing the employee stock ownership plan,which ultimately improves the overall business performance of the company.The paper concludes with relevant suggestions in relation to the shortcomings of Shanxi Fenjiu in the implementation of employee stock ownership plan: first,expand the share of employee stock ownership to increase the number of beneficiary employees so as to better stimulate the overall vitality of the enterprise and promote the performance of the enterprise;second,continuously implement the employee stock ownership plan to have a long-term restraining effect on employees and give full play to the long-term incentive effect of the employee stock ownership plan;third,develop a suitable Thirdly,the company should develop its own plan,pay attention to the design and selection of performance evaluation mechanism,combine with the current situation and development strategy of the company,and ensure the smooth implementation of the employee stock ownership plan.It is hoped that this paper will provide reference for the implementation of employee stock ownership plans in subsequent companies.