Effect Of The Pay Gap Between The Performance Of The Company

In recent years, the increase of internal pay gap has become a topic of wide public concern. As of eighteen major victory convened, the program of reform of the income distribution again. Our current salary structure design is reasonable, there are issues which need to be addressed are worth thinking about. Remuneration has always been closely related to the self-interest of the employees, a sensitive indicator of the pay gap of employee sentiment will turn directly affect the performance issues. For now, for the study of the pay gap within the executive team accounted for the majority, and the relative lack of research on the relationship between executives and ordinary employees pay gap and corporate performance. And, in theoretical circles, there are still two conflicting theories of competition theory and behavioral theory. Therefore, in-depth study on this issue, will help us to further deepen the reform of the enterprise pay system, compensation management science is a very important theoretical significance and practical significance.Taking into account07year ago, on the accounting treatment of2007the implementation of the new accounting standards that may be caused by the different impact of selected2007-2011All A shares listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange market data, in accordance with the nature of ultimate control different samples into the sample data of the sample data of state-owned enterprises and non-state-owned enterprises to study and normative research and empirical research method of combining, constructed between executives and ordinary employees absolute pay gap relative pay gap between the two explanatory variables to study the pay gap between the impact on business performance. Meanwhile, in order to verify the different level of risk and remuneration conditions, whether there is to adjust the regulation of the relationship between pay gap and corporate performance variables, this paper introduces a ranking of the company’s total leverage and pay levels in the industry as an adjustment variable to test the changes in the level of risk and pay the overall state of whether to play a regulatory relationship between pay gap and corporate performance. After this article through empirical testing methods for the pay gap between the role of the internal executives and general staff of the Chinese enterprises in the effect of corporate performance test and the perfect favorable policy recommendations on the subsequent compensation design system.This article of seven chapters, starting from the point of view of theoretical analysis and empirical research system, in-depth study of the pay gap between the performance of the company within the company executives and ordinary employees relations. The main content of each chapter is as follows:Chapter1, Introduction. Large by the widening of the pay gap in China’s internal widespread social concern this topic leads to research questions, and the main content of this paper, the research methodology and framework, as well as innovation.Chapter2, the literature review. From the management of the salary structure, the pay gap between the results of the relationship, performance pay design foundation three carding literature. In this section, a review of previous literature on the domestic and foreign research in related position, on the conclusions of the study of the various summary; Secondly, to explore the various experts and scholars on related subjects through research methods; Finally, the theoretical basis of the research to sort out for the rest of this study provide a reference for.Chapter3, the theoretical analysis and assumptions. At home and abroad for the pay gap affect the company’s results for the relationship between the two main theories:Tournament theory and behavioral theory, the two theories is summarized and analyzed. Followed by defining the concept of "pay gap" of the executive team, absolute pay gap relative pay gap is constructed of two explanatory variables, including the the monetary pay gap include equity incentive pay not only the calculation of the pay gap gap. On this basis, this chapter in the final of the assumptions of this research.Chapter4, the research design. The main factors that affect the pay gap role in the performance of the company, while the introduction of the company’s total leverage and pay levels ranked as the interaction terms of the pay gap. This is because the different risk levels and pay levels, the pay gap between the performance of the company is different. This study take into account the data of the different industries in different years, so adding two dummy variables:industry dummies and time dummies to control model.Chapter5, the empirical research. In this part of the explanatory variables and control variables on the performance of the company to an empirical test. This article select the total return on assets ROA alternative variables as the performance of the company, taking into account the company’s size, governance structure, the company’s growth and the impact of regional differences. This paper is expected to Tournament theory and behavioral theory be the performance of the company in a different case in the state-owned enterprises to be effective, that is, the relationship between the performance of the company and the pay gap is an inverted U-shaped; while in the non-state-owned enterprises, the support Championships theory. The final conclusion is either state-owned enterprises or state-owned enterprises, are in support of tournament theory. Behind the regression results also robust test. Basic earnings per share EPS, Tobin’s Q value alternative to total assets yield ROA regression, to make a test of the robustness of the model, to enhance the reliability of the conclusions of the article. Finally, the results show that the conclusion of this article is sound.Chapter6, conclusions and policy recommendations. By the conclusions of this study are summarized on the basis of summing up in front of the main content, and on the basis of research findings, combined with China’s actual situation and put forward relevant countermeasures and suggestions.Chapter7, study limitations, and follow-up study. This chapter is to point out the limitations of the study as well as the direction of future research.The innovation of this paper are mainly the following four points:(1) of the enterprise in accordance with the different nature of equity, divided into state-owned enterprises and non-state-owned enterprises, two types of study. Is unique in the level of corporate governance because state-owned enterprises and state-owned enterprises management to consider the personal political future, in the development of the pay gap often pay more attention to the fairness, these are non-state-owned enterprises, it is necessary to equity nature of the enterprise classification.(2) more accurate definition of the pay gap. Most of the previous articles executives average salary defined on the top three executives average pay, unlike the previous article, this article in accordance with the provisions of Article217of the Companies Act, all executives to consider, including the calculation of average pay. Includes not only monetary remuneration paid to the executives, and also includes equity incentive compensation in the calculation of average pay executives, this design is more reasonable and more accurate.(3) the introduction of the company’s level of risk and remuneration ranking as the interaction terms of the pay gap. The introduction of the two interaction terms, can be expected to test different level of risk and remuneration conditions the pay gap different impact on the performance of the company, as well as the regulation of the level of risk and pay levels.(4) the introduction of the control variables of the company’s growth. Employees in which the enterprise environment will directly affect their sense of identity for the existing pay gap, a great relationship with the level of company growth. Pay gap too large sense of unfairness in part, was personally optimistic about the prospects for the future development of a high-growth companies, to make up for. The introduction of the control variables, the explanatory power of the model will be improved to some extent.