State-owned Enterprise Managers Humane Incentive Mechanism Design

There are many reasons for SOEs' long-term poor performance, among which improperly dealing with "managers' motivation" may be the most fundamental one. Moreover, there are often two kinds of inclination in the past economics papers: Firstly , most deal with the motivation of the manager of state-owned enterprise in terms of economic benefits, and only a few deal with spiritual motivation; Secondly, most deal with the encouragement of the manager of state-owned enterprise in terms of positive motivation, and very few deal with negative motivation(restrain). For this very reason, we have put forward a kind of new incentives mechanism: on one side, indentifying encouragement with restraint; on the other side, giving considerations both to material need and spiritual need.Because this kind of incentives mechanism is based on meeting manager's humanized demand, so it is called humanization motivation mechanism. Focusing on this theme, we have done the following work mainly:First, we have put forward the concept of " Strategic idiosyncratic human capital ".From this starting point, we regard SOEs' managers in transition period as a transitional type of manpower capital between heterogeneous manpower capital of strategy and social capital. Therefore, SOEs'manager can't be called " entrepreneur" in strictly sense, they can only be called" quasi entrepreneur": On one hand, they still have some non- economic attribute under the traditional condition ; on the other hand, they gradually have some attribute which the entrepreneur should have under market economy conditions .Second, focusing on the different roles that impersonal capital and human capital plays in enterprise ownership arranging, and considering the relation between them, we put forward our own opinion :no matter how much property right impersonal capital owner may have in an enterprise ,they will never succeed without human capital owners 's directional controll in enterprises management. It is only through human capital owners ' participant in management that impersonal capital can function wonderfully. Human capital owners should share property rights and interests by taking part in the arranging of enterprise's ownership .That is to say, only making the human capital participate in obtaining the surplus of enterprises, impersonal capital could fundamentally make human capital work devotelly and realize their capital value . On this basis, we have put forward "the internal cause motisvation mechanism", thinking that the human capital as an equal contract participant, should share some enterprise ownership through the contract. This part of ownership of enterprises, is fundamentally a derivative fromhuman capital property right. Because this kind of encouragement could function only through the manpower capital himself, and will determine the function of impersonal capital, we call it" internal cause encouragement". Among all kinds of economic incentives, this determines the fundamental status of incentives from human capital property right which generally exist in the form of stock.Third, we have studied drawback in the current manager's incentives mechanism of state-owned enterprise and two kinds of inclination existing in the past economics thesis : First, mostly study the encouragement of the manager of state-owned enterprise in terms of economic benefits, regarding the manager of state-owned enterprise not only as " economic people ", but as " social people " . He has a demand for material, and a demand for social status, being respected ,etc. and the level of latter is much higher than the former. So we must carry on encouragement of material benefits, currently paying attention ,to spiritual encouragement. Second, most deal with the encouragement of the manager of state-owned enterprise in terms of positive incentives, and very few deal with negative incentives (restrain). In fact, from psychological analyses, people have a two-sided character: he should be encouraged and be restrained in thought and behavior, and the same with manager of state-owned enterprise. For this reason, we have constructed the humanized manager's motivation mechanism of state-owned enterprise, and thinking it reflect exactly the principle of "human first, and should developing fully".