With a sample of A?share listed companies in China from 2014 to 2020， the study examines the relevance between a new incentive mechanism of employee's follow-on investment and enterprise's total factors productivity. The results show that the follow?on investment can significantly improve the total factors productivity， that reducing non?efficient investment and increasing innovation output are two important paths for employee's follow?on investment to affect enterprise's total factors productivity， and that， compared with senior executive employees， the effect of motivating non?executive employees is more significant， which also confirms from another perspective both the importance to develop real economy and the enhancement of supervising incentive mechanisms. Heterogeneity analysis shows that in terms of corporate characteristics， employee's follow?on investment in non?state?owned listed companies and listed companies with a lower level of governance can more effectively promote the enhancement of enterprise's total factors productivity； while in terms of external market environment factors， the implementation in regions with a higher degree of marketization and by listed companies with more intense competition in the industry has a more significant effect on the promotion of enterprise's total factors productivity.