Research Of EVA Based Manager Compensation Motivation Mechanism Of State-owned Enterprises

This paper first analyzes the behavioral characteristics of state-owned enterprise managers with game theory, reveals the relationship between managers and owners. The targets of managers and owners are not uniform, and even can be said that there are disagreements and contradictions. The state-owned enterprise's special relationship are more likely to breed all the manager's short-term behavior and speculation, and even the administrative owner of the rent-seeking behavior and collusion occurred. State-owned enterprises to establish a reasonable pay incentive system not only has the necessity and urgency and considerable complexity.Then, the paper introduces some basic theories that are used to discuss salary incentive system, including the enterprise contract theory, the principal-agent theory, human capital theory of economics area and incentive theory of management field. Enterprise contract theory in the perspective of trade organization of transaction efficiency, extends transaction concept from market to the enterprise interior; The principal-agent theory researches on how to design the optimal contract incentive agent in the interest conflict and asymmetric information environment; Human capital theory thinks in economic development, people's factors is the key factor of economic development, the quality of mainly depends on people, rather than the natural resources abundant pain or the amount of capital; Incentive theory believes that "motivation" decided whether a person efforts and hard. Capability, ability to understand and level of effort work on the actual performance of work together. Pay not only refers to the monetary or individual labor remuneration, also including the equivalent of individual in labor process of achievement and realizes personal value after the satisfaction. Through the interpretation and application of these theories, combined with existing research findings and results, along the internal logic design to identify the theoretical basis of summing up a series of state-owned enterprises pay incentive system to be studied, including the need for objective, comprehensive range of standard patterns of the actual effect of various incentive mechanisms, followed by the operator to maximize shareholder wealth of human nature and the assumption, using qualitative research methods reveal the traditional compensation design problems, while a quantitative designed to analyze the operators of EVA-based incentive pay program proposed EVA Incentive program.Then, this paper introduces the concept of EVA, EVA formula and detailed explanation of the three parts of the EVA adjustment factors and the reason of adjustment. Based on the analysis of EVA target, brings forward the transverse comparison of salary incentive scheme. From the thought of EVA and EI to transverse comparison, overcomes transfer problem from simple EVA evaluation, can objectively measure managers, and considering the performance between different industries or internal management level, take care of the gap compared to managers, promoted managers in industry or between industry competitiveness. This paper introduces the five principles of incentive mechanism in horizontal comparison for state-owned enterprises and institutions:I linking pay with performance, risk and liability matching, both short and long term interests, taking into account cash balance of efficiency and the principle of gradual. Based on the five principles, this paper discussed the mixed models of incentive scheme:a fixed combination of individual performance pay bonuses as part of basic pay to protect the operator, then do not cap the EVA performance bonus incentive compensation as part of the operator. But the owner of the management in order to prevent short-term speculative line, to postpone the impact of changes in the effective separation to avoid the risk of the operator, stable business operations during the transitional period, an additional bonus to assess changes, changes in shareholder value, the buffer time-bonus bank. Combine the objective indicators and stock options to build mixed incentive system.Through the case analysis verify the policy of EVA based performance evaluation system operators and incentive model is feasible. This article chooses the special state-owned enterprises-amilitary institution for example, introduces the properties and current status. By pointing out existing problems and demand of changing puts forward the system reform, recommended processes and matters needing attention. For military institution, this paper has designed for EVA based system for special adjustment, to adapt to these unique needs of enterprise.To sum up, through the combination of theory and practice, in the state-owned enterprises, EVA as the core of the lateral incentive mechanism is feasible in China, is improvement of current salary incentive system, is the requirement of connotative development, can achieve the win-win result between owners and operators. The research resu Its can be a successfu I guiding for the system reform of military institutions.But the author is also aware of the shortcomings of this study where governance structure of China's state-owned enterprises, there is a complex and diverse background, in this environment, the depth of the research questions, develop, comprehensiveness, or to be further improved.