Development of State-owned Enterprises and Private Enterprises in China

As an indispensable part of China's economy, state-owned enterprises have been playing a pillar and leading role in recent decades. However, with the arrival of the spring of reform and opening up, private enterprises have developed rapidly, and the proportion of private economy in the national economy is increasing. On the other hand, most private enterprises are small in scale, slow in development, declining or even closed down. There is a common understanding of the problems of private enterprises in China: backward management concept and lack of management skills; Family management, organizational dysfunction; Responsibility, power, interests are unclear and unequal; The system has not been established or implemented; Excessive concentration of power, rule by man; The quality of employees is mixed; Poor corporate culture soil; Lack of core competitiveness and so on. These problems have become a huge obstacle to the further development of private enterprises. How should private enterprises achieve a breakthrough? Is there anything worthy of learning or vigilance from the experience of state-owned enterprises? These are all major issues that private enterprises must face directly.

Natural differences have created different development paths.

Enterprises are not power departments, but profit-making economic organizations. However, the management system and organizational operation of state-owned enterprises are quite different from the standards of real enterprises. Managers of state-owned enterprises are generally appointed by superiors, and middle-level enterprises are mostly composed of professional and technical personnel, thus forming a state-owned enterprise leader to guide enterprises according to the management form of government agencies, and professional and technical personnel of middle-level managers to organize enterprise operations according to engineering and technical principles. Therefore, leaders of state-owned enterprises want power and money, so they call state-owned enterprises independent economic entities, learn from western enterprises and gain full autonomy; When the leaders of state-owned enterprises want welfare benefits and the selection system is opaque, they regard state-owned enterprises as government agencies and build a talent system with high welfare benefits and isolation from society; When state-owned enterprises encounter difficulties in market competition, they don't want to solve problems with management and change, but ask the government for policies and use them to keep enterprises alive.

Compared with state-owned enterprises, it is the first principle for private enterprises to participate in market competition. Marketization determines that private enterprises cannot rely on policy development, and participating in social competition is the only way out. In private enterprises, many business operators are owners, so they can freely control human capital. In addition, the recruitment appointment system can be implemented, and the independent mobility of operators and the independence of enterprise decision-making are also high. Therefore, due to the differences in nature, although private enterprises can't get policy support, they can avoid having to bear the incidental policy burden appointed by superiors like leaders of state-owned enterprises, so as to gain the independence of business decision-making and give full play to their talents.

Maintaining a high degree of autonomy and independence is a powerful competitive weight for private enterprises, and it is also the cornerstone for private enterprises to stand on and win.

Incentive mechanism is the breakthrough of enterprise talent management

We must admit that state-owned enterprises are still the "highland of talents" in China today because of their unique industry monopoly ability and relatively stable working conditions. The salary of state-owned enterprises is based on simple factors such as academic qualifications, professional titles and length of service, which completely ignores the incentive mechanism of getting more for more work, which directly leads to the loss of a large number of talents since the reform and opening up. In view of the unreasonable salary distribution of state-owned enterprises, it is necessary for private enterprises in China to redesign the material and spiritual incentive system. According to the survey of the 200 largest companies in the United States by Happiness magazine, the CEO's salary basically consists of 2 1% salary, 27% bonus, 16% long-term incentive and 36% stock income. Drawing lessons from the practice of American enterprises, we can consider basic salary and performance salary. The basic salary is determined according to academic qualifications and professional titles. Because people with high academic qualifications and professional titles can undertake more important and complicated work, they can get higher salary standards and pay them in the form of wages. The main forms of performance pay are bonus, performance income, commission and stock option. Taking assessment, achievement and performance as standards, on the one hand, we carry forward the concept of "more work and more pay", on the other hand, we widen the income gap except basic salary. In the design of spiritual incentive system, compared with the state-owned enterprises' lack of planning, cronyism and unclear powers and responsibilities from enterprise strategy to personal development, private enterprises should help employees improve their career development planning, establish a good employment system and appropriately delegate power.

Whether the incentive mechanism is reasonable is the key for private enterprises to break through the bottleneck of talent management, give full play to talent ability and stimulate talent potential.

Supervision mechanism creates the continuity of enterprise vitality

In the case of separation of ownership and management rights of state-owned enterprises, it seems difficult for investors (countries) to play a positive role in the incentive mechanism for managers (leaders of state-owned enterprises appointed by superiors) and workers (employees of state-owned enterprises) without strong supervision. Therefore, any viable enterprise must be able to effectively supervise the behavior of all employees.

There is a saying in a large private enterprise group that I taught: supervising you does not mean not trusting you. Indeed, supervision is to ensure the effectiveness and standardization of management, regardless of trust or not. Establishing relatively perfect rules and regulations and strictly implementing them with clear rewards and punishments is the basis for optimizing the supervision mechanism. In today's China society, due to the influence of traditional culture and institutional conditions, the cost of re-employment for most workers is relatively high. Therefore, they have the motivation and willingness to maintain and promote the development of enterprises. Besides using rules and regulations to supervise, it is also feasible to give full play to the enthusiasm of employees and supervise subordinates, peers and even superiors.

Whether to establish and implement an effective supervision system is one of the important indicators to measure the management level of enterprises, and it is also the core element of building a dynamic enterprise.

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Analyzing the shortcomings of state-owned enterprises is not to criticize for the sake of criticism, but to learn from their experience and avoid going into the same misunderstanding. It is true that the development of private enterprises is tortuous, but the prospects are bright. Different industries, different fields and different stages of development have different modes and means of development. However, the only constant is change. In today's rapidly changing technology and increasingly fierce competition environment, enterprises must maintain a high degree of flexibility and vitality, constantly adjust the contents and objectives of their own system activities to meet the requirements of environmental changes, and take corresponding reform actions, that is, only by continuous innovation can they continue to survive in the competition, move towards sustainable development and achieve evergreen.