JTQC Study Of The Corporate Performance-related Remuneration

Under the age of rapid economic development, human resources play more andmore roles in enterprise management. One of the most real and important issues facedby many firms is how to improve performance and sustain a high level performance. Inorder to enhance competitive and adaptive abilities, many firms have explored variouseffective methods of increasing productivity. Making a radical organizational change isone of such commonly used methods. However, management practice showed thatalthough measures of organizational structure change can reduce costs, they cannotimprove organizational performance. In order to survive in a fierce competitiveenvironment, firms need not only excellent leadership and innovative internal operationprocess, but also a system of performance management based on strategic planning.Many companies are experiencing a transition of management stage of “commend andcontrol” to a new era of viewing employees as developable resources. This studyinvestigates the issues and problems in HUF and proposes a performance managementsystem based on management by objective (MBO).HUF incorporated many merits of MBO and applied the philosophy of objectiveorientations and process of objective management into its performance system. So thesystem became operationalizable and practical. Based on a thorough analysis of thecurrent status of performance management, HUF proposed ideas of MBO basedperformance management system—guiding philosophy, mission, basis, and buildingobjectives. Measures of building the new performance management system includedprocess, emphasis, management roles and employees’ professionalism. Lastly, thispaper demonstrated that performance management will be effective only when it isintegrated with strategic objectives.The performance management system in HUF has dealt with an issue ofover-emphasis organizational level performance and less-emphasis individual levelperformance. It links performance evaluation and objective management, integratesindividual and organizational objectives, and consequently builds a new workingstandard system. It helps organizations to realize objectives and thus can be an effective tool of scientific management. Although human resource practices in most companieshave not developed such result oriented performance systems, the result orientedperformance system has become a trend in the management field.