Take Listed Companies For Example:the Region Comparison Of Compensation Gap's Effects On Business Performance

Researches on compensation gap and enterprise performance involves how the enterprises establish compensation system to motivate executives and staff's work enthusiasm,but the relationship between compensation gap and enterprise performance influences by various factors,from internal factors to the external environment.In order to have a deeper understanding about the causes and effects of the way in which executives-employee compensation gap influences enterprise performance,this paper selects 369 companies listed on the Shanghai Stock Exchange or on the Shenzhen Stock Exchange as the research object.The method of research mainly adopts normative research combined with empirical research.By analyzing the the reality of executives-employee compensation gap of our country,this paper puts forward a hypothesis of inverted "U" shaped relationship and executives-employee compensation gap's impact on enterprise performance is various in different areas of China,etc.In order to verify the hypothesis above,the part of empirical research in this paper studies on the model with quadratic term of the compensation gap to verify this inverted "U" shaped on the basis of the discussed relationship between executives-employee compensation gap and enterprise performance;Depending on the office location of these enterprises,the selected sample enterprises can be divided by region to research the relationship between compensation gap and enterprise performance in different regions with different economic development level and consumption level.In order to eliminate the effects of other factors on the enterprise performance,the enterprise scale,asset-liability ratio,number of staff,nature of equity and other control variables is added into the the empirical research.Main research conclusions are:(1)the inverted "U" shaped relationship between executives-employee compensation gap and the enterprise performance means that with the enlargement of the gap,company performance declines after rising first.It shows that moderate widening compensation gap is helpful to motivate the enthusiasm of executives and employees so as to increase the business performance,but the excessive compensation gap may cause unfair perception of ordinary employees which will cause adverse impact on business performance.(2)the local economic development level may affect employee equity preference intensity.The employees in the eastern region may have a stronger ability to accept compensation gap,and the western employees who have egalitarianism thought can barely bear the gap.According to the results of the study,this paper put forward the following suggestions:When a company is to formulate compensation system,the compensation between executives and employees should be controled in a reasonable range;Companies should pay more attention to the salary incentive in order to motivate the employee to work hard;When making compensation system,the regional economic development should be taken into consideration.