From political praise to stock options: Reforming compensation systems in the people's republic of China

Abstract

The recent reforms in the People's Republic of China have brought into focus the system of compensation in Chinese enterprises. This paper examines the evolution of compensation schemes in China, with a special emphasis on the reforms of recent years, the obstacles they face, and the prospects for the future.

Performance-related pay in Chinese professional sports

“…This may well be seen as an indicator of the potential for other organizations with similar characteristics within a collectivistic society. Although developing a new motivational framework in China may be a gradual process that will be met with opposition (Shenkar and Chow, 1989), situations involving the need for individual abilities and performance with available objective measures are likely to be more receptive. It will also be important to have organizations where managers have the autonomy 'to select differential monetary rewards to motivate the workforce according to individual performance' (Zhu and Dowling, 1994: 7).…”

Confucianism, socialism, and capitalism: A comparison of cultural ideologies and implied managerial philosophies and practices in the P. R. China

“…The reward system was established on the socialist values and beliefs that people are not motivated by material incentives, and everyone should sacrifice and thus be compensated equally. Consequently, poor performers received the same reward as did excellent performers (Nevis, 1983;Shenkar & Chow, 1989). Those who performed better only got political praise such as "model worker" (Shenkar & Chow, 1989).…”

“…Consequently, poor performers received the same reward as did excellent performers (Nevis, 1983;Shenkar & Chow, 1989). Those who performed better only got political praise such as "model worker" (Shenkar & Chow, 1989). Promotion and succession of senior management was conducted on the basis of political loyalty, and sometimes social connection [i.e., guanyi] played a far more important role than technical factors such as managerial skills.…”

Changing patterns of rewards in Asia: a literature review

“…Over 30% of studies are on this area, which covers characteristics of old reward systems, transformations and future challenges of the new systems, such as in China (Shenkar and Chow 1989, Jackson and Littler 1991, Child 1995, Ding and Warner 2001, Japan (Benson and Debroux 1997, Dalton and Benson 2002, Hayashi 2002, Watanabe 2003, McCormick 2004, Pudelko 2004, Kuroda 2006, Ogoshi 2006, South Korea (Bae 1997, Kim and Briscoe 1997, Pucik and Lim 2001, Bae and Rowley 2003 and Singapore (Sharma and Chew 1992, Chi-ching 1997, Wan 2003. A transformation in reward systems happened during the 1970s and 1980s in some Asian countries.…”