Research On Enterprise First-line Managers Incentive Mechanism Design

The comprehensive development of society includes the progress of material civilization and spiritual civilization, and the core power of development is whether the productivity and production relations could promote each other. The enterprise that is an important organizational units to promote social progress provides goods or services to the society by using all kinds of factors of production(land, labor, capital, technology and entrepreneurial talents, etc.). So the enterprise is a kind of resource allocation mechanism in essence, which could achieve the optimal allocation of the social resources, reduce the transaction costs of the society, and promote overall social progress.The development of enterprise depends on scientific corporate governance, and the theory on corporate governance is an important part of enterprise theory, which based on the modern corporation as the main object, supervision and incentive as the core content. The research not only contains supervision to operator in the corporate governance structure,also emphasizes how to ensure the effectiveness of the company decision-making through the corporate governance structure and mechanism, so as to protect the interests of the various stakeholders of company.The grass-roots management is the management pattern relative to the middle and senior management in the corporate governance structure, which is organizing people to accomplish specific plans according to the plans of middle management. However, the grass-roots management that is directly related to the quality of the product or service is the foundation of company development.The grass-roots manager is the key of the grass-roots management. Although the company grasps more comprehensive information relative to the grass-roots managers, the grass-roots managers have more specific information about themselves and common employees. There is information asymmetry between the grass-roots managers and company which may cause the adverse selection and collusion that the grass-roots managers may seek personal gain at the expense of the interests of the company by using their private information. The grass-roots managers may selectively disclose information on their side to the company, and may hide information and behavior with the help of the common employees or other grass-roots managers. So, this paper study the grass-roots manager’s incentive mechanism in retailing. The main contents include:First, the paper study the principal-agent, mechanism design, collusion, grass-roots management theory, the grass-roots management in order to research the collusion-proof mechanism. Second, the paper analyzes the characteristics of human resource management in retailing, the performance management and promotion in company A, and the present situation of the grass-roots management in the company. Third, the paper study the adverse selection because of asymmetric information between the grassroots manager and company, how the company selects the most suitable the grass-roots manager through the external or internal recruitment, in order to avoid the grass-roots manager don’t conform to the requirements of the job. In addition to the adverse selection, asymmetric information may also make the grass-roots manager to collude with common employee and other grass-roots managers to hide their information and behavior. Based on the two kinds of possible existence collusion, this paper studies how to design the collusion-proof mechanism and offers suggestions.