The reform of payment and compensation system of Governmental Research Institutes(GRIs) is an important part of the reform of Chinese S&T system.In the past two decades,a new payment and compensation system that link the researchers' payment and compensation to their performance was gradually set up and implemented in GRIs,which has an incentive effect on the R&D skills to a certain extent.However,there are still some problems with this system in terms of the limitation of incentives,the absence of rules and regulations in management as well as the instability of budget,which are greatly needed to be adjusted and regulated.After making a deep analysis on these problems, some suggestions are given in this paper.