The Ministry of Labor and Social Security has ordered a new salary system to be introduced to reward achievements and performance.

Local governments are being called to play a more active role in supervising the reform and carry out the policy depending on local circumstances.

The ministry said it includes assets and technology when distributing salaries so that employees get paid according to the share of stocks they own.

It has suggested a salary system that is based on the actual work performed by different workers.

The reform is expected to inspire workers to contribute more to their enterprises.

Previously, SOE employees doing different jobs all earned about the same, but this did not encourage them to work harder.

Salaries for the same job in different corporations will vary according to the performance of each enterprise and on other factors, such as how hard employees work, the ministry said.

Different methods of payment will also be introduced -- for example, some workers will be partly paid in stock shares, others could earn commission.

Salaries of directors and executives will be determined by their jobs after discussion about their performances at meetings involving shareholders and the council of directors.

Research and development staff who play a major role in a corporation's development will get a much higher salary than others, according to the ministry.

Some authorized enterprises will allow employees to hold stocks.

Scientists will be encouraged to trade their research achievements for company shares -- although such trade-offs will be limited so that they are worth no more than 20 percent of the firm's registered capital. Innovations in high-tech fields can also be traded for stock, to a total of 35 percent.

The ministry stressed that employees who are also shareholders should also shoulder risks.

(China Daily 12/21/2000)