The Study On "the Annual Salary System" In China

After nearly half a century's development, the"annual salary system"which is origined from western developed countries has now becomed the main component of payment system in western developed countries. As an incentive system for organisation operators,"annual salary system"could motive managers.After entering China in 1990s, the"annual salary system"is used widely, we have a few modes of annual salary system and accmulate enough valuable experiences. Certainly, we have detours during the utilizing of annual salary system, but through which we could learn a lot from the them.The"annaul salary system"with chinese characteristics is in the procession of formation, though there are some problems in it. That's why it is so important for us to study"annChapter 1:The theory basis of"annual sala ual salary system"in China from a realistic point of view. This thesis's aim is to know the theory basis of the existance of"ananul salary system"through studing the system by connecting Marxist theory and the Western incentive Economics Theory.Besides that, it will help us to find out the development of"annual salary system"in China, then take effective measures to promote annual salary system's development.There are seven chapters in this thesis, the basic contents of the chapters are as follow:ry system". Marxist economics and economics both have the theories about"annual salary system".The following are the related theories of"annual salary system":property rights theory, theory of distribution according to work, theory of allocation accoding to the factors in procuding which are contents of Marxist theory consist the theory basis of our country's"annual salary system". Marxists believes that property rights are the basis of"Residual Claim"property rights. The allocation theory of Marxist theory emphasizes the importance of"allocating according to one's work"and believes that this theory also could be applied for the mental workers. Theories of the primary stage of socialism stress the importance of allocating according to the factors in producing, and believe that the capability of operators in a organisation is also the factor to production, which is also a factor for all to consider as a producing factor. The principal-agent theory, fair theory, expectations theory, human resource theory, entrepreneurs competition theory, reward according efficiency theory which are all the theories from economics are the theory basises of"annual salary system"and have close relationship to"annual salary system".Chapter 2: The development of theories on annual salary system. Recently, the developments of theories on annual salary system are developed deeper and deeper, some valuable theories are emerging continuously. The fruits of their researches mainly concentrated in the following areas:1,The study on the basic theories of"annual salalry system";2,Studies on the components,standards and criterias of implementations of"annual salary system";3,Studies on the motivated operators;4,The research on the period of assessment;5,The research on assessment indicators and salary measurement system;6,The research on how the operators should bear the risk of operating the organisation;7,Researches on stocks and options;8,The research on the supervision and restraint mechanisms;9, Studies on the status, role and impact of "annual salary system".These results of research play an important role in promote the development of "annual salary system" theory in our country.Chapter 3: Specific models and situations of implementations of"annual salarysystem"both in China and other countries. There is a long history for"annual salary system"in foreign countries, there are "American model", "Japanese model" and the"German model"and"Korean model."Since it enters our country from 1990s,there are a few kinds of models of"annual salary system"all over our country, there are"Wuhan model","Shenzhen mode","Hangzhou model","Sichuan model","Jiangsu model","Liaoning model","Jilin model","Lanzhou model."These models are becoming perfect in the process of operating.Chapter 4: The necessities ,prerequisites and difficulties of implementing"annual salary system"in our country. It is very necessary to implement"annual salary system"in our country, the necessities are as follow:1,the need for introducing advanced management experience from western countries.2,the need of different kinds of allocation system.3,in order to make them give the best performances.4,it is a way to measure the perfromance of managers.5,the implementing of the"annual salary system"could promote the management to a higher level. Therefore, we know the necesities of implementing the annual salary system, apart from them,we should know the prerequisites for impelmenting the system, they are: 1, the establishment of modern enterprise system is the prerequisite of implementing important; 2, perfect salary measurment system is another prerequisite of the existance ; 3, a whole set of salary standard; 4, the existance of professional manager market is importtant; 5, the existance of perfect laws and regulations is another prerequisite which is necessary. We may meet some difficulties during implementing the"annual salary system", All the above i have mentioned will decide the annual salary system's future development in our country.Chapter 5:The analysis on framework and the main content of"annual salary system"in China. The key components of"annual salary system"in our country are:1,basic revenue 2, incentive revenue3, risk revenue 4,the revenues from stocks and futures. Among the four elements, the basic revenue maintains the daily life of the operators; and incentive revenue for the operators who achieved business goals; risk revenue goes to the operators when they doing risk operating; Stocks and futures work as a long-term incentive, they play a very important role.Chapter 6: The analysises about characteristics, problems, reasons, and lessons during the implementation of"annual salary system"in our country. The"annual salary system"in our country have five characteristics:1,the range for its implementation is limited;2, the big salary disparity of the operators ;3,the performances of operators decide the operators'amount of salary;4,this system could motive and restrain the operators;5,it performs well in promoting as it has ability of combination of long—term incentive and short—term incentive. There are some problems during implementing annual salary system because of few researches on"annual salary system"and few experiences on implementing the system,for example: the range of objectives of implementing"annual salary system"is not sure; the criteria of salary is not clear enough. The causes for the above mentioned is that: the theoretical nesearch is lagged behind ; the structure for legal person management of one company is not reasonable; the accessment criteria is not consistent and the unsymmetry information. Certainly, we also accumulate lots of experiences through implementing"annual salary system". Moreover, we acquire some lessons by implementing"annual salary system", after learning the lessons we could promote the devleopment of"annual salary system"and deepen our understanding on the difficulties of implmenting the system.Chapter 7: Discussion about the"annual salary system"with Chinese characteristics. China's"annual salary system"formula should be established on the basis of the specific conditions with Chinese characteristics. The basic concepts for annual salary design in our country is that: we should design the salary system from China's national conditions and characteristics of coporates; its devlopment of model should move on from easily to difficultly; we should put the market in center; all the things related should take shifts according to the time, the place and the conditions; putting all the sets all together. Designing"annual salary system"according to these ideas, we should obey to some basic priciples: insisting that distribution according to work unifying distribution according to the element in production; the amount of salary depends on the performances of operators; proper attention to both efficiency and fair, proper attention to risk and revenue; regualtiing expenses of the managers; according to the policy; paying dual attention to fixed revenue and risk revenue; paying equal attention to short—term incentive system and long—term incentive system. All these principles are the ones we should obey to when we esbalish"annual salary system". All the followings are what we should do during establishing"annual salary system":1,speeding up the process of modern enterprise system's construction;2,establish a good regulation system;3,we should have scientific and reasonable incentive standards;4, we should combian material incentives with other kinds of incentives;5,the establishment of management operators'market;6,to promote the development of intermediate services organization; To speed up the establishment of"annual salary system", establishing inside and outside monitoring systems is necessary."The annual salary system"is developing ,I maintain that it will become perfect during its development and an annual salary system with Chinese characteristics will be established in future.There are two creative points in this paper: 1,it points out the types,contents and development trends of"annual salary system".Based on the studies of modes of implementions of"annual salary system"in foreign countries China, the thesis points out the specific mode of"annual salary system"of our country,at the same time,it breaks through the traditional concept that the"annual salary system"is conposed by two or three parts,but holds that there are four parts constitute the"annual salary system"and views reward revenue and risk revenue as the components of operators'annual salary insteadly. it also puts forward that the"annual salary system"of our country will develop toward standardization and regulation.The second creative point in this paper is that : affirming the importance of marxist theory in the formation of"annual salary system". It believed traditionaly that the"annual salary system"formed in western countries, therefore, the theory of western economics is the only theory basis of"annual salary system", maxist theory has little to do with it. After doing research, I think the point is one—sided .Marxists always attached great importance of allocation theories and practical issues which are the basis of"annual salary system". Therefore, in my opinion ,Marxist economic theory and Western economic theory both are important in the formation of"annual salary system". They are the theory basises of"annual salary system".