An Empirical Study on Issues in Taiwanese Employee Reward Plans

The human resources are the most important input for the enterprise, so the management of talents is necessary. Especially under level-management philosophy, the agency problem between owners and professional managers often influence the pursuit of enterprise's value maximization. Therefore, an effective rewarding system can make the agent bear some performance responsibility, and can lighten the idle duty problem. Based on this argument, first, this research examines the implementation of a reward plan with employees' bonus and employees' warrant, and whether it can improve the enterprises' performances and shareholder's value. Second, this research uses the Mishkin test (1983) to analyze whether the investors have rational pricing to employees' reward system.