Beijing restaurant offers model for SOEs' reform

The Qianmen branch of Sijiminfu, a roast duck restaurant with only 90 square meters of floor space in downtown Beijing, reported net profits of nearly 3 million yuan ($468,750) last year, an outstanding achievement. The restaurant's recipe for success is not spices or cooking methods, but a unique management philosophy that means key employees are included in a profit-sharing scheme.

The so-called dividend-sharing mechanism sees employees with management responsibilities take home a share of the profits based on their performance and investment, giving them access to financial rewards that were once exclusively for major shareholders. These employees share 20 percent of the profits within the annual target, plus 60 percent of profits above the annual target.

"The practice of dividend sharing could help the ongoing State-owned enterprise reform drive," said China Enterprise Reform and Development Society deputy head Zhou Fangsheng.