An Empirical Study On The Relationship Between Executives-employees Pay Gap And Firm Performance Based On Enterprise Life Cycle

With the development of China’s economy,the gap between the senior executives and the ordinary employees are getting more and more,and it gradually becomes one of the hot topics for scholars in the word.The more compensation gap don’t only affect the working relationship between executives and ordinary employees,but also reduce ordinary employees productivity,even affect the economic performance of the entire enterprise.The pay gap related literatures are very limited,especially the research about empirical and staff of the pay gap aspects are more scarce and the research views are different.This paper chooses the data of companies which come China’s Shanghai Stock Market and Shenzhen of A-share listed to carry out empirical research and analysis in 2012-2015,and introduces the enterprise life cycle,and uses the cash flow symbol method to analyze the life cycle of the sample enterprises,and research the specific relationship between executives-employees compensation gap and firm performance.This paper chooses the method of combining the summary method,the quantitative and the qualitative analysis method and the empirical analysis method.The research results show that the salary gap of the manufacturing company listed on the A-share listed company has a positive effect on the performance of the firm,that is,the bigger the salary gap.The higher the the match,which is consistent with the theory of the tournament.This paper also validates that the salary gap between employees and employees in the growing and mature period is positively correlated with the performance of the firm,but recession enterprises pay gap performance is negatively related to the enterprise.This paper puts forward the following two suggestions for the limitation of the research: First,establish a reasonable salary incentive strategy.Second,consider the characteristics of different enterprise life cycle,combined with the actual situation of enterprises to develop a suitable salary gap.Research significance: In theory,the empirical study of this paper enriches the relationship between executives-employees pay gap and firm’s performance,and promotes the improvement of compensation performance theory in our country.The study has high theoretical research value.In practice,this paper starts from the perspective of enterprise life cycle,and divides the listed companies of A-share manufacturing industry into the stages of the life cycle.It provides a broad space for the performance of the executives-employees pay gap,The development of pay strategy has a practical role in guiding.The innovation of this paper is that this paper is not only limited to the pay gap between executives,but also research salary gap between executives and employees,and the introduction of corporate life Cycle theory.This study is no longer limited to the static analysis which were coming the previous salary gap and enterprise performance,enriched the dynamic analysis of the pay gap.The application of qualitative andquantitative methods for division of life cycle,are no longer using only a single method to distinguish between different stages of life cycle and to explore the theory of behavior and the theory of which theory is more suited to the manufacturing industry.To verify the enterprise life cycle,the region of the enterprise have the moderating effect on the relationship between the salary gap and the enterprisen performance.