和暖控股：薪酬体系变革

This case discusses the evolution of the compensation system at Henuan Holdings Co., Ltd. (hereinafter "Henuan"), highlighting the variety of its compensation components and the iteration of its incentive mechanism with a particular focus on its partnership system introduced in 2015. The company has diversified its compensation packages beyond basic salaries to include performance bonuses, special bonuses, super dividends, and non-material incentives such as honors and training opportunities. Meanwhile, its incentive mechanism has undergone three major changes: 1) Between 1995 and 2003, when China's real estate industry was still in its embryonic stage, Henuan chose to pay fixed salaries; 2) From 2004 to 2014, amid a real estate boom, Henuan introduced performance bonuses and special incentives in pursuit of nationwide expansion and fast turnover; 3) After 2015, as the real estate sector entered a correction period, Henuan decided to refocus on tier-1 and tier-2 cities while at the same time transitioning from a traditional real estate developer to a service provider. In line with this strategic reorientation, the company rolled out project partnership, city partnership, platform partnership, and group partnership models, thus replacing or supplementing existing performance bonuses with project dividends, super dividends, and equity incentives. By the end of 2018, Henuan's partnership system had helped to increase both company profits and employee compensations. Despite these win-win results, it remained to be seen if further improvements would be needed in this regard. Moreover, as Henuan began transitioning from real estate development to real estate operations and asset management in 2017, it also faced the question of whether to revise its compensation system. Henuan needed to learn from experience to ensure the effectiveness of its compensation system in this fast-changing environment. This case presents the adjustments made to Henuan's compensation system over the more than 20 years of its history. By analyzing this case, students will gain a comprehensive understanding of compensation system design, including how to determine compensation and incentive structures. More importantly, they will recognize the importance of the compensation system in supporting corporate strategy implementation. Since this case gives a detailed account of Henuan's existing partnership models, students will also acquire knowledge about the partnership system now adopted by a growing number of companies, including its definition, applicability, and advantages and disadvantages.