Weng, Jingjing
(2012)
Pay system reforms in public service units in contemporary China: the implementation and impact of performance-related pay.
PhD thesis, London School of Economics and Political Science.
Abstract
The reform of pay systems in China has received growing attention from
scholars over the past two decades. However, despite the great attention given to
the business sector in China, one significant category among the pay studies in
the Chinese public sector has been missing. In recent years, the Chinese
government has started to implement a new wave of reform in the national
payment system: performance related pay in the public service units (PSU,
“shiye danwei”), which form a cluster of public service providers operating
alongside core government and separate from other state-owned or statesponsored
organisations. Compared to the extensive discussion of public sector
pay in Western countries, there has to date been no academic research on pay
systems in the Chinese PSU sector, leaving a significant gap in our
understanding of the key changes in and challenges to its human resource
management in different organizations. This thesis conducted in-depth case
studies on the pay system reforms in six state schools and in one publishing
organization, exploring a range of research objectives which draw on the New
Economics of Personnel (NEP) theory and such motivation theories as
expectancy theory, goal-setting theory, agency theory, cognitive evaluation
theory and equity theory.
The case study results were found to be consistent with the NEP predictions. The
two cases indicate that, although the principle of linking pay to individual
performance has been well accepted by employees across PSUs, performance
related pay was better implemented and more successful in the publishing
organization than the state schools. The introduction of performance related pay
in schools does not appear to have achieved the government’s objective of
encouraging higher performance but did have other positive consequences such
as retaining teachers in rural areas and possibly balancing the teaching resource
in the longer run in addition to some unintended outcomes at the same time.
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