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Compensation strategies as a motivational and retention tool

Davies Doug, Liang Wei and Zhang Xinyan

Introduction

This chapter looks at the issue of compensation in a private company in China, coupled with the expansion of the business from a domestic operation to an international focus with mixed success. Commencing with an inequitable and illogical salary and bonus system, the organisation moved from a ranking system of evaluation to a points-factor system, and followed this with a stock option plan to improve retention and motivation, which resulted in creating more problems than it resolved. A form of gain-sharing was then introduced in its place, with better results. The case study also examines the evolving form of the company from ...

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