Internal Pay-gap?Product Market Competition And Firm Performance

Income distribution is the focus which related to national economy and people's livelihood,China has never stopped the pace of its exploration.With the continuous improvement of the degree of economic marketization in China,the problem of excessive income gap is highlighted,which stimulates the introduction and expansion of China's salary limitation policy.However,about the relationship between the internal pay gap and the performance of the company,although there are some exploratory research,there are still controversial and did not come to a unified conclusion.Moreover,if the relationship between the two showed significant differences in different nature or different competitive environment in the enterprise still lack of in-depth discussion.Therefore,this article from the following three aspects,to explore the above issues with the means of multiple regression analysis:(1)How does the internal executives-employees pay gap impact of business performance?(2)In the enterprises with different nature of the property tights,whether there is a difference on the impact between internal pay gap and business performance?(3)Does the product market competition bring adjustment to the relationship of between the internal salary gap and the company performance?We hope to draw a conclusion in line with the actual situation and provide a reference to companies and the government to design a reasonable pay system and give full play to the salary gap on the incentive role.The results show that,on the basis of the inverse U-shape relationship between the internal pay gap and the overall performance of the company,the turning point of the inverse U-shaped curve is smaller in the state of the state-owned enterprises than in the private enterprises,and with the increase of the market competition,the twist will be right.This indicates that the affordability of state-owned employees in the existing situation is weak and the optimal internal salary gap should be expanded in the case of high competition in the product market.This shows that there is a range effect of China's internal executives-employees pay gap on the promotion of corporate performance.In the current situation,the range that internal pay gap have incentive effect in the state-owned enterprises is less than that in the private enterprises,and the range of the promotion effect should be expanded in the case of high competition market.The conclusion has three points of significance:First,we fully affirm the relevant policies that start the salary restrictions from the state-backed firm is reasonable in some extent.Secondly,we propose that the government should take industry differences in to account when restraining the internal pay gap and promoting the fairness of income.For enterprises with high competitive pressure,we can consider relaxing the internal salary gap in order to give full play to the economic promotion.Thirdly,it is suggested that the government should pay full attention to the construction of external competitive environment and pursue a good market competition mechanism in the meantime of promoting salary limitation policies.In this way,we can expand the incentive range of pay gap and promote the overall performance improvement of all industries.