Business Unit Performance Salary: Policy Analysis And Research

In2006, China decided to implement the reform of performance-based pay inChinese public institutions; in2009, the State Council decided to implement it inpublic institutions by three steps; then in2011, the State Council proposed to thereform of classifying them, in this context, the author focuses on the performancewage reform of public institutions. The reform can promote to the overall reform ofthe institutions, encourage the staff and improve the service level and operationalefficiency. The reform, which embodies the efficiency and the fair, is the inevitablerequirement to build a harmonious society. Therefore, it is important to study thereform.The paper starts from the background of the reform and expounds the mean ofthe performance-based pay, the course of the wage reform in Chinese institutions, theinevitability of the reform, and the four principles. By studying the related documentsand participating in related studies, the author points out the five main problems in thereform. The five problems are the imperfect management of the total amount ofperformance pay, the unstable funds for performance pay, the gap in the pay, theimperfect performance appraisal system and the irregular subsidies and allowances.The author does the empirical analysis of public hospitals, for example.On the datum of national statistics and the surveys, the author points out thelarger wage gap between different industries, regions and departments. By regressionanalysis of the survey datum, the performance pay has a significant effect on jobsatisfaction and pay satisfaction. On the basis of the survey, the author indicates thefour main problems in the reform of performance pay in Chinese public institutions,which are the lower remuneration, the lack of financial investment, the unreasonablewage gap and the imperfect performance appraisal system.Finally, according to the four principles, the profound understanding of theproblems and the causes, the author proposes the corresponding countermeasures.First, to ensure the success of the reform, the propaganda, education and trainingshould be strengthened, and the relevant policies, laws and regulations should beimproved. Second, the total amount management of performance pay should becombined with the classifying. Third, the supervision should be strengthened toensure the enough funds. Fourth, the merit wage gap should be narrowed. Fifth, theperformance appraisal system should be improved and the oversight, accountability and feedback mechanisms should be established. Sixth, the reform of performancepay should be combined with the specification of the subsidies and allowances, andall departments should be closed together to monitor and implement the related work.