1406041 管理专业英语 16周重修免听选考题目

Ø       Translate the following paragraphs into Chinese（50%）短文翻译

 

                                                      ――Frank Bodmer

 

Abstract：This paper looks at the wage system in Chinese state-owned enterprises during the 1980s. While wages remained compressed, there is evidence for the use of incentive mechanisms. Wages were quite sensitive to firm performance, especially at higher levels of the hierarchy. One of the reform measures ― the Internal Salary System, a system of intra-firm contracts ― has contributed significantly to this sensitivity. There is also some direct evidence that it enhanced the effectiveness of the bonus system, and that it helped to increase productivity. This goes towards explaining how the Chinese bonus system was able to overcome the free-rider problems typical of team compensation.

 

An important aim of Chinese economic reforms has been the improvement of the incentives in state-owned enterprises. Before reforms, workers enjoyed almost absolute job security. Wages were tied to a seniority system, and did not depend on effort. This system has been relaxed, and it has at least in theory become possible to dismiss workers, or to tie their salary to their performance. Most prominently, worker compensation has been made dependent on results of enterprise activity such as profits or the attainment of output targets. Thus, incentives for workers to contribute effort should have been improved. Also, the role of the top manager has changed. While he was mainly a recipient of orders before the beginning of reforms, he has started to enjoy autonomy and responsibility for a variety of decisions. The evidence on the labor reforms is generally fairly positive. It has been found that bonus payments have a strongly positive effect on firm productivity and there is evidence for a developing labor market for top managers. However, it has also been found that the wage structure remained compressed at the end of the 1980s.

 

The compressed wage structure is something of a puzzle if one thinks that wages have become dependent on performance. In this case, one would rather expect an increasing wage dispersion. The compressed wage structure also contradicts the idea that managers have been given more responsibilities. Certainly, they had to be compensated for this increased responsibility, to ensure that they acted in the interests of the firm. A further puzzle is how the bonus system proved to be as successful as it apparently was given the well-known free-rider problems of team compensation. The present paper investigates this apparent contradiction. It finds that below the surface of a fairly compressed wage structure much can be found which follows theories of incentive pay. First, it is found that the sensitivity of pay to performance is higher for higher levels of the hierarchy. Second, evidence is found that the Internal Salary System ― a system of intra-firm contracts ― has been important in providing intra-firm control and thereby improving incentives. By increasing the transparency and reducing the monitoring needs, it increases the link from pay to performance for lower levels of the hierarchy and decreases it for higher levels. It is also found to have tightened the link from pay to performance overall, at least when profits are taken as a performance measure. Further, it has had a positive effect on firm productivity. The conclusion is that under the surface of a fairly rigid wage system much can be found which follows modern theories of incentive pay.

 

The average wage and the average bonus per employee are taken in order to give an impression of the sensitivity of compensation to performance, Sales and reported profits are taken as performance measures. Profits would be the economically correct performance measure since the bonus fund should have been filled by the profits. However, it is reasonable to assume that sales would be reported with less error. Therefore, both performance measures are used. The estimates are obtained in fixed-effects regressions, with the inclusion of year dummies, This avoids simply obtaining a measure of he relation of firm size to wages. Table 1 shows the results, and it can be seen that according to both performance measures there was a link between pay and performance. And just as was intended, this ink was stronger for bonus payments than for overall wage; payments, which contradicts the view that bonus payments were treated just like other wage payments. It can also be seen that the relation was weaker for profits. This could be due to the problems of profit measurement mentioned above.

In what follows, wages are taken as the compensation measure and, again, sales and profits are taken as the performance measure. The wage is taken because it is the only compensation measure that s available by groups of workers. First, the sensitivity of wages for he different groups of workers is estimated. The hypothesis is that he sensitivity decreased with the level in the hierarchy. It can be seen in Table 2 that this was indeed the case. The sensitivity of the op manager's wage was clearly the highest, followed by that of the general-managers and engineers, and last by that of the workers; his holds both for sales (upper part of Table 2) and for profits. (lower part of Table 2), Again, the coefficients are smaller in the equations that use profits as the performance measure. Last, the role of the Internal Salary System is investigated. As discussed above, it is expected that its introduction increased the sensitivity of wages for workers since it now became easier to judge their performance.

 

The introduction of the bonus system was a central aspect of Chinese SOE reforms, as already discussed. It was the means to making payments dependent on performance, thereby enhancing effort and productivity. In theory, bonus payments should have been made from an SOE fund to which mostly profits contributed. The link between bonus payments and profits was therefore an important aspect of this reform. The causation is two-way here, of course. On the one hand, higher profits should lead to higher bonus payments. On the other hand, a closer link between pay and performance ― or, in other words, a higher share of bonuses in total wage payments ― should improve incentives and thereby worker effort and firm performance. For this second effect to work, there should be a sufficiently close link between pay and effort. As discussed, this is subject to the free-rider problem typical of team compensation. One hypothesis of the present paper is that the Internal Salary System has contributed to overcoming these free-rider problems. For this to be true, one condition is that the link between profits and bonuses is closer under the Internal Salary System. This is investigated below.

The incentive effects of the bonus system are also investigated below by means of production function estimates. Groves et al. (1994), Yao (1997), and Zhuang and Xu (1996) all found a strongly positive effect. An issue in these papers is the two-way relationship between bonus payments and productivity. Bonus payments should enhance productivity by motivating workers. This is the effect in question. However, since bonus payments depend on firm performance, there is also a reverse effect. Groves et al. (1994) and Zhuang and Xu (1996) have used instrumental variables techniques to account for this, while Yao (1997) has estimated a full structural model allowing for the two-way causation. However, using instruments has not changed the basic conclusion in these papers. In some cases, it even tended to increase the coefficient of bonus payments. In the present paper, no attempt is made to disentangle the two effects. More modestly, it is investigated whether the Internal Salary System tightened the link between firm productivity and bonus payments.

A first condition for the effectiveness of the bonus system is that bonuses are paid mainly out of profits. We should therefore observe a close link between profits and bonus payments. Also, the Internal Salary System should have tightened this link since it provided a way to ascertain whether targets were met. This made the whole system more transparent, giving management more information on workers' performance, reducing monitoring needs and also reducing the possibilities for management not to pay a bonus even when it was justified. To check the link between profits and bonus payments, fixed-effects regressions including year dummies are used again. First, the share of bonus payments is regressed on a dummy for the firm having adopted the Internal Salary System. The first column of Table 4 shows that firms with an Internal Salary System did not rely more on bonus payments than did other firms. This points to a shortcoming of the reforms since bonus payments (as opposed to fixed pay) should have been more attractive to firms with the Internal Salary System. However, it can be seen from the interaction term in the second column of Table 4 that the Internal Salary System was successful in tightening the link between profits and bonus payments.

 

The aim of this paper was to deepen our understanding of the use of incentive pay in Chinese SOEs. It ; was found that there was significant sensitivity of wages to firm performance. And this sensitivity varied positively with the hierarchical position of an employee, just as would be predicted by theories of hierarchy Also, the Internal Salary System strengthened this sensitivity for workers and lessened it for managers. It should therefore have helped to overcome the team problems inherent in bonus payments. This view is further supported by the finding that the Internal Salary System tightened the link between profits and bonus payments. It was also found to have had a positive effect on productivity. The conclusion is therefore that below the surface of a fairly rigid wage system much can be found which follows modern theories of incentive pay. This means that the variation of pay with performance increased, while pay remained fairly insensitive to traditional measures of skill such as education and occupation. It is very probable that such a change caused much less resistance on the part of workers than the outright increase of wage differentials or an increased role for hierarchy, and that it was therefore easier to implement in an environment with strong worker participation.

 

 

Ø       Writing （50%）写作

Please write an article on the following topic. Your article should be no less than 200 words.

Topic: Managers at Different Levels