Research On The Compensation System Of State-Owned Commercial Banks In China

Designing an income distribution system which fits for a modern commercial bank and aligning the compensation strategy with its business strategy, for a state-owned bank ,is an important task in the process of the reconstruction of its ownership and the transition of its inner operation system. An appropriate compensation system can not only motivate staffs but also assure them to struggle for the bank's goal. Furthermore, it can attract and retain talents.In the light of the characteristics of commercial banks, China's commercial banks are already similar in form to real commercial banks, however, their inner operation systems have just begun to transform and needs a long way to go and a tough task to perform before they become modern commercial banks in essence. Currently, the domestic researches of the ownership reforms of state-owned commercial banks focus on corporation governance, risk controlling, financial reconstruction, organizational structures, business models and so on, while those touching on compensation management are relatively few, and the conclusions drawn by scholars differ.For the purpose of scientific research and practical use, this thesis takes into consideration both scientific research and practical use, combines theory deduction and case analyses, and integrates domestic features and international practice. With the summary and then comparative analyses of the practices and experiences of other commercial banks at home and abroad, this thesis proposes incentive mechanism by compensation in the light of main problems with the incentive mechanism of compensation, which fits for the characteristics of state-owned commercial banks. The proposals could be a reference for establishing competitive compensation policy for state-owned commercial banks.Based on the comparative research, this thesis puts forward some thoughts for redesigning compensation systems in state-owned banks, which include aligning the compensation system to the bank's business strategy, nurturing compensation philosophy, establishing the effective portfolio of compensation, and setting different compensation corresponding to different posts. In addition, in accordance with the rule of applying theories to practice and testing theories with practice, this thesis redesigns compensation systems of state-owned banks, taking Bank A as an example, in the hope of testing the conclusions in this thesis with practice.