The practice of motivating employees with wages in the Public sector of the People's Republic of China

Chzhan Khaichzhou Master's Degree, the faculty of Sociology, M. V. Lomonosov Moscow State University 119 234, Russia, Moskva oblast', g. Moscow, ul. Leninskie Gory, 1, str. 33, of. 1, str. 33 chzhan_khaychzhou@mail.ru Other publications by this author

The system of motivation of employees of the public sector in China is characterized by a certain bone, which is different / distinguished all communist legal systems. However, in recent years, the liberalization of the economy has also affected the public sector, which has also affected the mechanisms for stimulating labor productivity in public authorities and state-owned companies. As a consequence, the topic of such discussions is topical, and the interest in it does not subside both national and foreign science of political economy.

In the system of personnel motivation through wages in the public sector of the PRC economy, three models can be distinguished, used within the framework of 1) administrative authorities, 2) state-owned enterprises and 3) state-owned companies operating as joint-stock companies or limited liability companies

The amount of remuneration of civil servants and employees of state corporations, as well as the corresponding allowances, in accordance with the norms of legislation, depends on the position held by a particular person. The legislator identifies the following elements of the monetary maintenance of employees:

1) basic salary;

2) official salary;

3) payment for the rank of a civil servant (in total, the civil service system in China includes 15 ranks);

4) superannuation ^[1].

The amount of the basic salary traditionally remains quite low. The holder of the 15th rank receives about 1.3 thousand yuan (13.5 thousand rubles) per month, and the chairman of the People's Republic of China - 11.3 thousand yuan (about 118 thousand rubles). For comparison, the average salary in China is about 6 thousand yuan. In megacities such as Shanghai, Beijing or Hangzhou, it ranges from 9 thousand to 11 thousand yuan ^[2].

The main part of the income of employees is made up of stably paid incentive payments that go beyond the basic salary. However, the average size for most employees (holders of rank 11 – 8) is relatively low, despite the periodic expansion of the variable part of the monetary remuneration. However, at higher levels of the service hierarchy, the amount of incentive payments begins to play a significant role. Most representatives of the public sector receive in the form of allowances to the basic salary from 3.2 thousand to 6.2 thousand yuan ^[3].

The role of a significant tool of material motivation and stimulation is often played by a lump-sum salary supplement, which relies on special working conditions, and bonuses awarded for performing particularly important and complex tasks ^[4].

The facts of official awarding of employees are also the basis for receiving lump-sum payments. In the latter case, it should be emphasized that the amount of material incentives in each particular case may vary significantly depending on the specific type of public service and the status of the award. The amount of remuneration may vary from 1 to 2 sizes of the official salary ^[2] .

The overall salary scale of civil servants involved in the functioning of the economy remains quite low by world standards. Thus, according to data at the beginning of 2020, the average income of the heads of 29 state corporations in China was 62.3 thousand yuan (650 thousand rubles) per month, which is only about 5 times higher than the average salary in Beijing ^[5].

Directly at state-owned enterprises, other incentive schemes for personnel through salaries are used.

After abandoning the system of a single 8-tariff wage system, a four-part payroll system began to be widely used at state-owned enterprises. The income of employees of enterprises consists of the basic salary, additional payments for seniority, official salary, subsidies and bonuses. The basic salary is clearly fixed, but rather low (its value may not exceed 1 thousand yuan, i.e. 10.4 thousand rubles). Payments for the duration of the employee's total work experience and incentive payments are added to it, depending on the duration of work at this enterprise (at the current place of work). The amount of the additional payment for the length of service is quite small and in reality has little effect on the motivation of employees.

The official salary is on average about 60% of the size of the main one and is determined using a complex system of coefficients that take into account the intensity and complexity of the work performed, as well as the requirements for the personal qualifications of the employee ^[6].

Subsidized payments or benefits are accrued, firstly, in the form of monthly payments if an employee has a higher education or a high degree of professional classification confirmed at the official level (as an analogy, we can cite the system of working categories in the Russian Federation). The amount of the allowance can range from several hundred to 1.5 thousand yuan (15.7 thousand rubles).  Secondly, enterprises pay subsidies to employees to cover part of the costs of housing and communal services, payment for hairdressers and public baths^[3].

Bonuses are paid based on the results of the company's activities during the year, for the development and implementation of new products in production, etc. The main indicator on the basis of which a decision is made on the accrual of premiums is the amount of profit of the enterprise. Factors such as the amount of income from the sale of manufactured products, the amount of accounts receivable balances, the cost of repayment of loans, the number of episodes related to violations of safety rules at work, the presence of claims to product quality and the proportion of defective products are also taken into account.

It is important to note that there is no fundamental gap in the amount of bonuses between the bulk of the staff and senior staff. The bonuses assigned to the head of the enterprise exceed the average amount of the corresponding remuneration at the enterprise by no more than 4 times.  The amount of the award of the deputy heads of the enterprise and middle management personnel does not exceed 50% of the remuneration of top-level managers ^[7].

In state-owned companies operating as joint-stock companies or limited liability companies, a payroll system is used in accordance with job coefficients. The salary in this case includes the basic salary multiplied by the work complexity coefficient, payments accrued based on the results of work for the year, and a benefit from the company ^[8].

The amount of the basic salary is determined by multiplying the base indicator (in most cases, its size ranges from 600 to 1.5 thousand yuan per month) by the labor complexity factor attributed to a particular position. Individual enterprises also practice the use of additional increasing coefficients that increase the efficiency of production during the reporting period and the employee's performance of personal performance indicators.

Payments based on the results of the year are accrued depending on the length of the employee's work experience at the enterprise and generally play a weak role in motivating staff due to their small size.

Benefits are accrued to employees subject to the availability of certain working qualifications or obtaining a position, at least, of a deputy head of a department or workshop. The amount of the allowance in this case reaches several hundred yuan.

Employees are also paid benefits for ensuring the efficiency of the enterprise. Its size ranges from 10% to 15% of the employee's earnings. The decision on the allocation of the allowance and its amount is made on the basis of the company's performance indicators for the previous year. The limits within which the size of the allowance for persons holding specific positions can change are strictly defined by regulatory documents. The amount of the allowance for the management of the enterprise can be up to 2.5 times higher than the amount of the corresponding payments for ordinary employees ^[6].

In some cases, the salary of employees is supplemented by another material motivation tool: the company allocates an employee who has been working at the enterprise for more than 1 year a "labor share" that allows him to participate in the distribution of profits. At the same time, the operational management of the unit is carried out not by the employee himself, but by the company of unit holders ^[7].

The development and introduction of new products, working methods, and proposals for rationalization of production are encouraged by awards. As a rule, the latter are divided into several degrees depending on the economic effect achieved. The amount of the bonus can reach from 1% to 20% of the employee's income taxable earnings for the previous 3 years. Some companies charge bonuses in the amount of 1% to 10% of the additional profit received due to the merits of the employee ^[2].

It is also often the practice of assigning distinguished new employees or young professionals a monthly allowance of 500 – 900 yuan (5.2 – 9.3 thousand rubles) or a one-time payment of an average of about 2 thousand yuan (21 thousand rubles) ^[7].

In general, the system of "salary" motivation of employees in the public sector is characterized by a rather low role of the basic salary and seniority allowances. The main earnings of employees are provided by the official salary, the coefficients of collective and personal efficiency at work that increase the amount of earnings, allowances and surcharges directly related to the effectiveness of staff work, their professional development and career growth. At the same time, mechanisms are actively used to avoid an excessive gap in the income level of senior employees and the bulk of the staff. The difference in the salary level is strictly limited, the level of remuneration is tied to the formalized requirements imposed on each specific employee. 

The equalizing principles of remuneration accrual are closely and quite harmoniously combined with purely market ones. The latter makes it possible to motivate employees to highly productive work, improve their qualifications, receive education, participate in the rationalization of production, and at the same time makes it possible to minimize conflicts between senior employees and the bulk of the staff, as well as to avoid the occurrence of such a destructive factor as awareness by the bulk of employees of the injustice of the payroll system.