Property Rights,Market Level And Employees Compensation Stickiness

How to motivate employees has been a long-term concern of the enterprise. Scholars have paid more attention on executive compensation and motivation than employees. Based on the institutional background of China’s "dual track" economic pattern and market reform,the author studies employee compensation stickiness with the perspective of property rights and market level. Furthermore, the author also studies the effects of labor protection on employee compensation stickiness with the implementation of "Labor Contract Law". With taking "Labor Contract Law" as a proxy variable for labor protection, the author use the 2005-2014 A shares of China listing Corporation as the sample data to make empirical test. The results show that general employee compensation is sticky in state-owned enterprises but not in non-state-owned enterprises. Given the market reform, the results shows that the district of both the higher market level and lower market level in state-owned enterprises, the employee compensation are sticky. While in the non-state-owned enterprises, the employee compensation of lower market level are significantly sticky, but that of lower market level are not sticky.Considering the exogenous variables of labor protection, the results shows labor protection intensifies general employee compensation stickiness in state-owned enterprises but it doesn’t in non-state-owned enterprises. On the one hand, this article explains the causes of the compensation stickiness of the state-owned enterprises from the property rights, and puts forward the policy implications. On the other hand, this article also provides evidence for the economic consequences of the implementation of the "Labor Contract Law".