Research On The Impact Of The Incentive And Constraint Mechanism To The Managers On The Performance Of State-owned Commercial Banks In China

At the present time, the state-owned commercial banks in China have a good many deficiencies in management and are deepening reform. The aim is to establish the perfect corporation governance and improve the efficiency of management and bank performance. As the part of the reform, setting up and improving the incentive and constraint mechanism to the managers has a great value in theoretical analysis and practical operation.From the corporation governance point of view, the paper ties to make a research on the impact of the incentive and constraint mechanism to the managers of the state-owned commercial banks on the bank performances. Firstly, on the base of the reviews of the interrelated theories and studies, the paper sets up the framework to analyze the relationship between the performance and the incentive and constraint mechanism to the managers of the state-owned commercial banks, and analyzes the mechanism of the effect of the incentive and constraint mechanism to the managers on bank performance. Secondly, through the empirical analysis, it is found that the incentive mechanism to the managers doesn't have a prominent effect on bank performance. In addition, the inside and outside constraint mechanism cannot restrict the behaviors of the managers of the state-owned commercial banks because of the faultiness of the mechanism. Then it results in the failure in the decision-making mechanism and brings the huge moral hazards to bank operation. At last, the paper points out that we must improve the inside mechanism and make full use of the outside market mechanism to make the incentive and constraint mechanism to the managers effect together.