catalogue
I. Introduction
(1) Advantages
(2) Disadvantages
Verb (abbreviation of verb) Problems that enterprises should pay attention to when using performance pay 6 pages
Things that enterprises should pay attention to when using performance pay.
Seven. Conclusion .......................................................... 10
On the strategic significance and matters needing attention of performance pay in enterprise management
Since the reform and opening up, China's economy has achieved rapid growth that attracts worldwide attention. The global market brings opportunities and challenges for China enterprises to participate in international market competition. These opportunities and challenges require the operators of China enterprises to pay more attention to the implementation of the strategy, that is, the effective implementation of the strategy. Among them, the employment incentive mechanism based on "people-oriented"-performance pay, as a new incentive innovation system, has been highly praised by many theorists and practitioners. Performance pay refers to a wage system that pays wages on the basis of performance evaluation of individuals or organizations. Under the performance pay system, the attention of the whole organization is mainly focused on the reward of employees' performance. The organic combination of human resources and performance pay will effectively improve the work efficiency of public institutions. Problems that enterprises should pay attention to when using performance pay; And around the enterprise to achieve sustainable development, performance pay in enterprise management is how to learn from each other.
Enterprise, performance appraisal, Scientific Outlook on Development, risk prevention and control, appraisal work, capital cost, appraisal system, value creation, SASAC, four key points.
introduce
The concept of performance pay is not new. At the beginning of the 20th century, porters in Shanghai were paid according to the quantity they carried. In the eighteenth century America, the income of farm olive pickers was paid according to the number of olives they picked. In today's society, the word performance pay/bonus is generalized, which usually includes commission and bonus. A large number of management practices show that the failure of enterprises lies not in the quality of strategic planning, but mostly in the poor implementation of strategies. Today's popular strategic execution tools were born in western Europe and American countries with developed market economy. Practice has proved that they can also help enterprises achieve breakthrough results. Because China enterprises and western enterprises have different cultural backgrounds, when using western management tools, we must fully consider the unique internal and external business environment of China enterprises. There are many problems in the strategic implementation of many China enterprises: for example, some companies can't carry out their strategies, only list various goals, but there is no support from any measures, action plans and budgets; When some enterprises implement strategic performance management, only the human resources department promotes the implementation, and the top management of the company does not participate, which leads to difficulties in the implementation process and finally has to give up; Some enterprises can't grasp the key assessment indicators when implementing performance appraisal, and only push the assessment indicators from employees' job responsibilities, which can't reflect the enterprise's emphasis on performance and the traction on employees' behavior; Some enterprises ignore the participation of grassroots employees when implementing strategic performance management, and the lack of communication between superiors and subordinates leads to conflicts in performance management; Some companies only regard performance reward as a means of bonus distribution and position promotion, and the incentive method is single, which is difficult to meet the multi-level needs of employees; Some enterprises pay too much attention to financial performance and ignore non-financial performance, only pay attention to the interests of investors and ignore the interests of customers, employees and related stakeholders, which eventually leads to the decline of enterprise performance; Some enterprises regard performance appraisal as performance management, lacking the systematic management process of performance planning, performance implementation, performance appraisal and performance return, which leads to the failure of performance management to effectively support the company's strategy.
At present, in the process of promoting internationalization, Chinese enterprises must construct enterprise strategic performance suitable for the internal and external business environment of the company. Only in this way, the strategic planning and performance management system can be effectively linked, and the implementation of enterprise strategy in China can be solved.
High salary can attract and retain talented, diligent and professional employees. But a reasonable salary should not be confused with a huge bonus. Identity economics believes that the practice of performance pay shows the existence of distrust. It tells employees that employers don't believe they will do the right thing. In fact, incentives must be effective. In any case, there are no magic rules about bonuses and stock options. Without good planning, the incentive mechanism will never work. )
Identity economics provides us with a new way to think about work and pay. The motivation should not be the control system, but the performance of duties: such as flying a plane, raiding the beach, standing up to put out the fire and so on. In the financial industry, this is called fiduciary responsibility. This is an obligation, an obligation to serve customers and seek greater benefits for the organization.
In today's highly competitive market system, enterprises are facing various challenges, including some favorable conditions and many severe challenges. Generally speaking, although the international financial crisis has not completely passed, there are still many uncertain factors, which will guide enterprises to further improve their value creation ability, improve the quality of development and achieve sustainable development. Enterprises should base themselves on the present, plan for the long term, strive to create new competitive advantages, continue to work hard on "grasping reform, adjusting structure, improving quality, controlling risks and increasing strength", give full play to the guiding role of performance appraisal, and realize a new leap in value creation.
Second, the meaning of performance pay
Performance pay, also known as performance pay, bonus pay or salary linked to assessment, is a salary system that focuses on the jobs that employees are hired, determines the post level according to technical content, responsibility, labor intensity and environmental advantages and disadvantages, determines the total salary based on the economic benefits of enterprises and labor prices, and pays labor remuneration based on employees' labor achievements. It is a close combination of labor system, personnel system and wage system. Performance pay consists of basic salary, age salary, post salary and reward salary.
According to Marx's three kinds of labor theory, performance pay is mainly based on the third kind of labor of employees, that is, solidified labor, which is a typical wage system that regards achievements as heroes and determines employees' salary with actual and final labor results. There are mainly piecework wage system and commission system. According to its original meaning, performance pay should be based on work performance and labor efficiency. However, in practice, because the quantification of performance is not easy to operate, in addition to the piece-rate salary and commission system, we also refer to the extra incentive salary based on employee performance. The predecessor of performance-based wage system is piece-rate wage, but it is not a simple wage form linked to the number of products, but a wage system based on scientific wage standards and management procedures. Its basic feature is to link the salary income of employees with personal performance. Performance is a comprehensive concept, which is broader than the quantity and quality of products. It includes not only the quantity and quality of products, but also other contributions of employees to the enterprise. Although the performance pay paid by enterprises to employees also includes basic salary, bonus and welfare, they are not independent, but organically combined. According to the ranking of 500 companies by American Fortune magazine in 199 1 year, 35% enterprises implemented performance-based pay system, while before1year, only 7% enterprises implemented this method. Performance pay system can improve work performance. If it can play a better role, employers must be sure that they can effectively evaluate job performance. The traditional performance-based salary system is usually individual performance, and the form of recognition for employee performance improvement is usually to increase the basic salary within the specified time every year.
Characteristics of performance pay
Compared with the traditional wage system, the main characteristics of the performance wage system; First, it is conducive to linking employee compensation with quantifiable performance and integrating incentive mechanism into the relationship between enterprise goals and personal performance; Second, it is conducive to the tilt of wages to outstanding performers, improving enterprise efficiency and saving wage costs; Third, it is conducive to highlighting team spirit and corporate image, increasing incentives and employee cohesion.
Its basic feature is to link the salary income of employees with personal performance. Performance is a comprehensive concept, which is broader than the quantity and quality of products. It includes not only the quantity and quality of products, but also other contributions of employees to the enterprise. Although the performance pay paid by enterprises to employees also includes basic salary, bonus and welfare, they are not independent, but organically combined, which embodies the comprehensive characteristics of performance pay.
The imperfection and negative effects of the performance-based salary system are mainly: it is easy to reward those who perform well, and there is no constraint on those who perform poorly. The excessive reward for those who perform well is easy to cause some employees to hide their performance. Therefore, the accurate evaluation and effective supervision of employees' performance is the key to the implementation of performance pay.
Third, the advantages and disadvantages of performance pay
(A), the advantages of performance pay to enterprises
1. Linking one's income directly with one's work performance will encourage employees to create more benefits without increasing the fixed cost of the enterprise.
2. Strict and long-term performance pay system is an effective way for the company to continuously improve the working ability and working methods of employees and improve their performance.
3. This method rewards employees with good performance, and at the same time, it can acquire and retain employees with good performance.
4. In the recession, although there is no bonus, because of the low wage cost, the company can not lay off employees, so that employees have a sense of security and increase loyalty; The economy is picking up, and the company also has sufficient talent reserves.
(B), the drawbacks of performance pay to enterprises
1. Performance pay encourages competition among employees and undermines trust and team spirit among employees. Employees will block information, be conservative, and may even compete for customers. This method is not suitable for those enterprises that need teamwork to have good output.
2. Performance pay encourages employees to pursue high performance. If the employee's performance is inconsistent with the interests of the organization (department, company), personal performance may improve and organizational performance may decrease. At this time, this method loses its value. For example, in order to make a deal, a salesman may make many promises of free service to customers, and the company may invest a lot of money to fulfill the promises.
3. Employees may harm the interests of customers in pursuit of high performance. For example, the salesperson of an insurance company exaggerates the value of the policy in order to make a deal. If the customer finds out, he may ask for surrender, and at the same time, the insured will have distrust of the insurance company. For another example, in order to increase efficiency, doctors may prescribe high-priced prescriptions for patients and do unnecessary expensive tests. This practice violates the purpose of the hospital and will also damage the image of the hospital.
4. In administrative institutions, performance pay is paid by unit leaders, which will make unit leaders more powerful and easily lead to more serious corruption of unit leaders.
Four, the enterprise decision-making level in the establishment of performance management system should include five contents:
The first is to clarify the company strategy. It mainly includes corporate mission, vision and core values, corporate strategy, business strategy, functional strategy and strategic environment scanning. Defining the company's strategy is mainly for the next step to formulate a performance management system that can effectively support the company's strategy, and guide the company's various business activities to always focus on the strategy, so as to establish an organization with strategy as the core.
The second is to establish a performance management system and implement the responsibility mechanism. The performance management system mainly includes the design of performance appraisal content such as strategic KPI, and four links in performance management operation, such as performance planning, performance implementation, performance appraisal and performance reward. That is, the enterprise regularly evaluates the last performance cycle according to the strategic performance management system, evaluates the performance of the management and the person in charge of each position, and links the evaluation results with personal career development, personal ability improvement, salary and benefits and other incentive mechanisms.
The third is to maintain organizational cooperation, including vertical cooperation and horizontal cooperation. Vertical cooperation mainly refers to the vertical consistency of company goals, department goals and post goals, emphasizing the vertical decomposition of indicators, that is, communication and cooperation between superiors and subordinates; Horizontal cooperation mainly refers to the horizontal decomposition of cross-departmental goals through processes, emphasizing the horizontal decomposition of indicators, that is, communication and cooperation between parallel departments or parallel positions.
Fourthly, according to the organizational performance goal and employee's post performance goal, the post qualification system and competency model are established to improve the strategic execution ability of the organization and employees.
Fifth, to cultivate a corporate culture that supports performance management, it is especially necessary to do two jobs, namely, performance coaching and performance communication, which are essential in the four links of performance management system. To do these two tasks well, we need to strengthen the leadership of middle and high-level enterprises.
5. How to apply performance-based compensation management in enterprise management.
The significance of performance pay to enterprises lies in that employees' different performance leads to different wage systems. It is a floating salary that exists every year. , but it is not a permanent increase in fixed wages. Performance pay is not limited to assembly line workers, but can be used in any position in any company, including banks, accounting firms, law firms and so on. Its purpose is to find and reward good employees and encourage everyone to work harder in a better way. Performance pay is undoubtedly the "stimulant" of unit vitality. Only by truly mobilizing the enthusiasm of the whole unit and fully mobilizing the potential of all employees can work efficiency be effectively improved. Of course, the fairness of performance-based pay reform assessment methods will directly affect the level of social services. To formulate a fair and just evaluation method, we must fully carry forward democracy, solicit opinions extensively, and put the implementation of the whole policy in a fair, open and transparent supervision environment.
So how to improve performance pay?
(1). There must be accurate methods and means to measure performance;
(2) At least in theory, it can be proved that the performance pay scheme adopted will have a decisive impact on employees;
(3) The functional relationship between performance pay and salary must be made clear;
(4) Provide excellent employees with opportunities for promotion and promotion.
When implementing the performance pay system in enterprise management, the distribution of performance pay should adhere to the principle of "distribution according to work, giving priority to efficiency and giving consideration to fairness", with strict procedures and strengthened supervision.
Implement total control. The total performance pay of public institutions consists of Tianjin local standard subsidy, basic salary of last year1February and retained living salary. After being approved by the personnel department and the financial department of the government at the same level, each unit can only allocate within the approved total amount in accordance with the standardized allocation procedures and requirements.
Improve the allocation procedure. The first is to formulate a distribution plan. The distribution plan involves the vital interests of each staff member, and it is necessary to solicit the opinions of staff members extensively and try to be fair and reasonable. When making the plan, it is necessary to refine and quantify the work objectives, assessment methods and responsibilities of each post, and submit them to the workers' congress for repeated discussion and revision to ensure the scientific and operability of the plan; It is necessary to highlight the principle of combining "responsibility with rights" and formulate perfect assessment rules; It is necessary to sign letters of responsibility at all levels, and the responsibility should be implemented to people. In addition, the treatment of retirees must be considered when formulating the plan, and retirees should refer to the standards of government retirees. The second is strict assessment. The key to the smooth implementation of the plan is to strengthen internal assessment, do a good job of accountability, and honor rewards and punishments fairly; It is necessary to set up an assessment leading group and conduct strict assessment; It is necessary to disclose the assessment system, assessment methods, assessment results and operational procedures in a timely manner; It is necessary to assess and score work performance on a monthly basis and cash performance pay; We should carefully analyze and evaluate the rationality and operability of the scheme, and discuss and modify it in time if there are defects in the scheme. In addition, we should do a good job in the ideological work and interpretation of staff, dredge them ideologically, resolve local contradictions and ensure the normal operation of performance appraisal.
Strengthen supervision and inspection. The first is to standardize the examination and approval procedures. Each unit shall implement performance pay, and the plan shall be approved by the workers' congress, approved by the competent department of industry, and reported to the personnel and financial departments for the record. The personnel and financial departments shall, according to the local economic development and the overall wage level, verify the total performance pay of the unit, and finally publicize and cash the individual performance pay according to the assessment. Second, the departments of discipline inspection, organization, personnel, finance and auditing should strengthen inspection, review and supervision, and promptly correct violations of discipline. Third, accept social supervision through public reporting telephone, setting up suggestion boxes and suggestion books, and hiring social supervisors, and often hold symposiums to listen to the opinions and suggestions of the staff of the unit, and timely modify the unreasonable components in the plan to ensure the fair and reasonable distribution of performance pay in public institutions.
Attention problems linked to performance pay;
(a), responsible for the enterprise profit and loss balance, that is, there is a performance bottom line requirements, to reach the performance bottom line to enjoy the full basic salary. If you can't reach the performance bottom line, you can only get part of the basic salary (at least not less than half of the basic salary), which is generally 50% of the basic salary. The bottom line of performance generally refers to the break-even point obtained from the analysis of the quantity, cost and profit of an enterprise.
(2) The general manager can control the reward and reception expenses in a certain proportion, which is linked to the total performance.
(3) Executives get performance commission, and the commission ratio can be increased according to different performance quotas;
(4) Acting general manager, deputy general manager and general manager can get dividends, excellent work performance and even registered shares after they have served for a certain number of years.
Six, enterprises need to pay attention to when using performance pay.
(1) Guide enterprises to pay more attention to the efficiency of capital use and improve the quality of development.
After 30 years of rapid development of reform and opening-up, China's economic scale has expanded rapidly, and its total economic output has leapt to the forefront of the world, but it has also paid a heavy price for resources and environment. Since the establishment of SASAC, many enterprises have made great progress, but the development is still uneven. Some enterprises' internal development ability is not improved fast enough, the development mode is still relatively extensive, and the foundation of profit growth is not stable. Some enterprises excessively pursue scale expansion, occupy too much invalid capital and use capital inefficiently. In this international financial crisis, some large international enterprises went bankrupt or got into trouble. One of the same reasons is excessive expansion, blind mergers and acquisitions, and a large amount of capital invested in inefficient areas. We should take this as a warning. In the future development, how to guide enterprises to do what they can, not only to maintain the necessary development speed, but also to pay attention to capital return and development quality is a new challenge to performance appraisal.
In order to improve the efficiency of capital use, enterprises should firmly establish the awareness of capital cost, not only pay attention to the production and operation costs, but also consider the capital cost, realize real full-cost accounting and ensure investors to get more returns. We should attach great importance to problems such as redundant construction and overcapacity that may occur during the investment process, and do not blindly pursue production capacity, output and market share. We must strictly observe discipline and earnestly "resolutely not invest in high-risk areas beyond our control and resolutely not invest in projects that damage the value of shareholders."
(2) Guide enterprises to pay more attention to strengthening their main business and adjust and optimize their structure.
In the process of coping with the international financial crisis, a remarkable change of large multinational companies in major developed countries is to vigorously divest non-main business assets, clean up inefficient assets, sell non-core businesses, and constantly increase structural adjustment and industrial upgrading. After the adjustment, the original technical and management advantages have been consolidated, and the competitiveness of the main business has been further enhanced. How to guide enterprises to strengthen their main business, intensify adjustment and seize the commanding heights of economic development is a new challenge faced by performance appraisal.
Focusing on strengthening the main business and maximizing the income of the main business, we should focus on three key links: First, we should seize the great opportunities provided by the adjustment of international and domestic economic structure, highlight strategic priorities, clarify the main direction of attack, further adjust and optimize the structure and change the mode of economic development, allocate resources more rationally, and promote the high-end concentration of funds, technology, talents and other resources to the main business and value chains such as R&D, design and brand building. Second, strictly control the investment direction, focus on the development of advantageous industries and products, strengthen the assessment of the economic added value of investment projects and prevent excessive expansion in accordance with the strategic adjustment requirements of the state-owned economy layout and main business determined by SASAC. Third, persist in making progress and retreating, and do something and do nothing. With the courage and determination of a strong man to break his wrist, we should speed up the liquidation of non-main business and inefficient assets and strive to achieve new breakthroughs in structural adjustment and industrial upgrading.
(3) Guide enterprises to pay more attention to risk prevention and control and achieve steady and rapid development.
At present, the unemployment rate in developed countries remains high, consumption and investment are still relatively weak, the international capital market is still unstable, a large amount of hot money flows out of developed countries, and new asset bubbles and investment risks are still accumulating, which does not rule out the possibility of hitting the real economy again. Due to the political and economic pressure brought by the economic recession, many countries have introduced protective measures, and trade frictions are increasing. At the same time, the foundation of China's economic recovery is still not solid, and the old and new contradictions are intertwined in economic operation, which makes it more difficult to maintain stable and rapid economic development, promote the transformation of economic development mode and adjust the economic structure. China will continue to implement a proactive fiscal policy and a moderately loose monetary policy to maintain the continuity and stability of macroeconomic policies, but at the same time, it will fine-tune the strength, rhythm and focus of macroeconomic policies. In this situation, how to make enterprises keep up with the changes in the market and policies and take precautions against risks in time is a new challenge faced by performance appraisal.
Doing a good job in risk prevention is an important basic work for enterprises to achieve good performance. At present, we should focus on the following three points: First, we should firmly establish an advanced awareness of prevention, be prepared for danger in times of peace, adhere to steady operation, resist the temptation of short-term interests, and especially be cautious in entering high-risk fields such as stock market and futures. Those who enter these fields should standardize the procedures and strictly assess. Second, we must establish and improve the risk management and control system. In view of the weak links and management difficulties in enterprise development, optimize the design of assessment indicators, and implement dynamic adjustment and continuous improvement according to the characteristics of different development stages. It is necessary to strengthen the construction of internal control system, strengthen capital budget control, strictly control the level of assets and liabilities, strictly control cash flow, and strive to reduce operational risks. Third, we must effectively avoid the risks brought by "going out". Do a good job in market demonstration and demand investigation, strengthen the evaluation of overseas political, economic, social, legal environment, finance, taxation, auditing system and other risk factors, and control all kinds of risks to a minimum.
(4) Guide enterprises to pay more attention to sustainable development and enhance their international competitiveness.
The international financial crisis has done great harm to the real economy and eliminated a number of enterprises. However, many enterprises respond sensitively, adjust their development strategies in time, speed up the optimization of organizational structure and product structure, continuously improve their technical ability and management level, cut costs drastically and improve their competitiveness. A group of transnational groups reborn from the ashes not only consolidated their traditional competitive advantages, but also formed new competitive advantages through innovations in systems, mechanisms, technologies and management. How to make enterprises adapt to the new changes in the current competition pattern, constantly improve their core competitiveness and sustainable development ability, and remain invincible in the more intense market competition is a new challenge faced by performance appraisal.
Focusing on guiding enterprises to achieve sustainable development, performance evaluation should follow the following principles: First, strengthen the evaluation of independent innovation ability. Pay close attention to the development of science and technology, concentrate superior forces, increase R&D investment in key areas and occupy the commanding heights in the future, improve the institutional guarantee for scientific and technological innovation capacity building, and improve R&D efficiency. Second, we should strengthen the cost assessment. Low cost is a major comparative advantage for China enterprises to participate in international competition. Facing the situation that multinational companies cut costs drastically, enterprises should have a sense of urgency. Strengthen the whole process cost management, reduce procurement costs, optimize the use of raw materials, improve technology and management processes, reduce management costs, and ensure cost competitiveness. It should be noted that cost reduction is a continuous process, which cannot be at the expense of long-term competitiveness, and the project expenditure related to the long-term development of enterprises cannot be easily reduced. Third, we must strengthen the assessment of energy conservation and emission reduction. Optimize the energy structure, improve energy efficiency, vigorously develop clean energy technologies, reduce greenhouse gas and pollutant emissions, and form a clean development mode with low energy consumption, low pollution and low emission as soon as possible.
Enterprises should take the comprehensive implementation of economic value-added assessment as an important measure to deal with the new challenges in the post-crisis era, constantly strengthen the orientation of value creation, and provide more powerful and effective guidance for enterprises to achieve sound and rapid development. The key to the assessment of economic added value is to accurately grasp the "three orientations", highlight the "four key points" and make good use of the "four policies".
The "three orientations" are: first, highlight the capital attribute of enterprises, guide enterprises to enhance their value creation ability and improve the level of capital return. Second, efforts should be made to improve the quality of development, guide enterprises to strengthen their main business, control risks and optimize their structure. Third, highlight sustainable development and guide enterprises to pay more attention to independent innovation, strategic investment and long-term returns.
The "four key points" are: First, improve the efficiency of the use of existing funds, optimize management processes, improve product structure, and reduce inventory and accounts receivable. Second, pay close attention to the disposal of non-performing assets, businesses that do not belong to the core business of the enterprise and have low long-term returns, resolutely reduce them and withdraw in time. Third, improve the quality of investment, take whether to create value as an important criterion for allocating resources, and ensure that the return on investment of all projects is higher than the cost of capital, and the return on investment is greater than the investment risk. Fourth, optimize the capital structure, effectively use financial leverage and reduce the cost of capital. It is necessary to integrate value management into the whole process of enterprise development, grasp the key factors driven by value, and decompose and implement responsibilities at different levels.
The "four policies" are: First, encourage more investment in R&D, and regard R&D expenses as the assessment score of profit calculation. Second, venture capital is encouraged to acquire strategic resources, and a large amount of exploration expenses are invested in enterprises, and a certain proportion is used as research and development expenses. Third, encourage investment in sustainable development, and deduct the projects under construction that meet the main business from the capital cost. Fourth, limit the investment in non-main business, and calculate the non-recurring income by half. These policies will play an important role in improving the quality of enterprise development and realizing sustainable development. Enterprises should make full use of these policies, formulate supporting measures, improve the assessment system, and ensure that the policies are effective.
Seven. conclusion
The nonstandard and unscientific salary management in Chinese enterprises has seriously hindered the development of enterprises. With the continuous development of market economy, salary management is the most effective and direct management means for enterprises to attract and motivate employees. Enterprise managers should change their ideas, establish a scientific and effective performance compensation management system suitable for the development stage of enterprises as soon as possible, realize the goal of attracting, retaining and motivating talents, and finally serve the strategic objectives of enterprises.
refer to
Author: Qiu Shi, Vice Director of State-owned Assets Supervision and Administration Commission of the State Council. SASAC
Author: Wang Xiaogang "Best Practice of Strategic Performance Management"
Author: Huang Mei, Tang Dexiang, "Efficiency Wage and Its Institutional Arrangement in Game Theory"
Author: Su "Human Resource Potential Mining and Performance Pay Practice in Public Institutions"