Incentives to SOEs' employees a test for reform

CHINA HAS DECIDED TO carry out a pilot employee stock ownership project in some State-owned enterprises this year which will allow eligible employees to buy a certain amount of company stocks, according to a guideline issued by the State-Owned Assets Supervision and Administration Commission of the State Council, the country's top SOE watchdog, on Thursday. Beijing Youth Daily commented on Friday:

By making employees equity holders to make them work harder for the benefit of the company, the initiative is apparently aimed at improving the competitiveness of SOEs. Expected to make a major difference to most SOEs and their employees, the move will lay the ground for personnel management reform.

Some SOE employees do not perform to their potential because of their weak sense of belonging when it comes to their company. On the other side of the spectrum are employees who excel in their jobs because the private companies they work for, such as Shenzhen-based Huawei Technologies Co Ltd and Pingan Group, support employee stock ownership.