Shanghai DG Company's Compensation System Optimization

The competition among enterprises is subject to their human resource which is considered as the corporate prime resource to survive and develop. How to attract and maintain the talent people through efficient human resource system, especially compensation system, when fighting in such intensive competition environment? How to realize the people-oriented management? How to maintain and stimulate employees while sustain reasonable profit? These questions haunt in the entrepreneurs’heads every day. The company has to be aware that the compensation is no longer the simply paying or rising of the salary. Instead, a brand new compensation system and methodology should be applied to meet the employees’need and reinforce the human resource management in total. The people-oriented management cannot be established without a scientific and rational compensation system.DG Co. Ltd is a private company providing educational product and services. Due to the small scale and short history, the backward human resource management system needs to be regulated and improved for the better development. When facing the increasingly serious competition, the former compensation system cannot support the company growing anymore. The imperfection and inefficiencies of the system impact the employees’ activeness, creativeness and initiative and hinder the future development of the company.The thesis studies the present problem of the compensation system of DG Co. Ltd based on the theories of contemporary human resource management, compensation management and organizational behaviors. To begin with the brief introduction of compensation theory, incentive theory and several new tendencies in compensation system design, the author then unveil the problems and defects of the present system through the result analysis of the compensation satisfaction survey. Finally, the author provides re-design a new system which can adapt to the development of the company based the present situation. In addition, the reinforcement of the compensation regulation is stated as the key to ensure the smooth implementation of the new compensation system. Meanwhile, the establishment of the welfare system is also suggested to improve the company cohesiveness and reduce the labor cost.