Economic Management Journal

May 2014, Volume 3, Issue 2, PP.26-34

Study on the Compensation System with SixDimensional Chinese Culture Components in

Modern Chinese Firms
Shuo Wang, Changzheng Zhang, Yang Li
Xian University of Technology, School of Economic and Management, Xian, China, 710054

Abstract
The compensation management practices mainly depend on the guidance of classical western compensation management theory,
which leads to the obvious shortage of good localized compensation management theory and methods. Under this condition, the
chinization of compensation management theory has been the urgent task facing the HR management scholars of China. The paper
tries to renew the explanation of compensation system stemming from the perspective of Chinese employees think patterns and
cognitive habits, based on the empirical summarization and literature review. Based on the work above, the paper proposes a
Chinese-style compensation system with six dimensions, which includes compensation for heart involvement, compensation for
hard work, compensation for pleasure, compensation for warmness, compensation for trust, and compensation for innovation. The
Chinese comprehension of compensation system is helpful to the understanding and support of employees, and is good for
managers to adopt more effective compensation communication with Chinese features which can enhance the motivation effect of
compensation.
Keywords: Compensation System; Compensation Management; Localization; Compensation Components Model

710054

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