Managers are very important for the success of any organization and incentive is the motivational force which increases the performance of the managers and ultimately the performance of the corporation increases. In this essay I will discuss the importance of incentives which are given to the managers and its impact on the efficiency on the organization’s governance. I will discuss these points in terms of the organization of China. We will try to find out whether the culture of incentives exists in the firms of China or not. This essay will discuss the relationship of managerial incentives with the performance of China’s listed firms. It has been found that company owners consider incentives as an investment instead of considering it just a financial outlay. Owners can get commitment of managers and can achieve the desired results for the organization.