Research On The Effect Of Dismissal And Turnover Intention On Managers' Incentive

In modern enterprise system,the separation of ownership from management gives rise to the principal-agent relationship.As rational economic man,the principal and the agent both count the cost and seek to maximize their self-interest.Because of information asymmetry,the enterprise can not observe managers' behavior directly,and can only evaluate their behavior by some related indicators indirectly.Managers likely does something which is bad for enterprise's interest depending on his information advantage for their own interest.In order to prevent managers' moral risk,the enterprise should make appropriate compensation policy which can motivate managers to provide the optimal behavior and maximize its interest.By studying managers' replacement,we can find that there are two reasons leading to their leaving,dismissal and resignation.The enterprise can not observe mangers' resignation in advance,and managers can not observe enterprise's dismissal either.Actually,dismissal intention and turnover intention both influence managerial incentive,so the relationship between the two intention and managerial incentive should be studied.This paper uses two-phase model to study managerial incentive and firstly studies dismissal intention and turnover intention.Through building and analyzing the model,we can arrive at the equilibrium of dismissal and resignation.The conclusions are as below.Dismissal intention can be affected by managers' ability,the influence coefficient between managers' effort degree in the first phase and basis compensation and dismissal pay in the last phase,dismissal cost and the proportion of monopoly.Turnover intention can be affected by dismissal intention,managers' ability,the influence coefficient between managers' effort degree in the first phase and basis compensation in the last phase,the non-monetary utility sensitivity and the proportion of monopoly.The paper studies the effect of dismissal and turnover intention on managers'incentive by building the incentive model relying on the studying of dismissal intention and turnover intention.The conclusions are as below.The relationship between managers' effort degree and turnover intention is reversed.The relationship between sharing proportion and turnover intention is positive.When the influence coefficient between managers' effort degree in the first phase and dismissal pay in the last phase is bigger than that between managers' effort degree in the first phase and basis compensation in the last phase,the relationship between managers' effort degree and dismissal intention is positive,and the relationship between sharing proportion and dismissal intention is reversed.On the contrary,the relationship between managers'effort degree and dismissal intention is reversed,and the relationship between sharing proportion and dismissal intention is positive.In addition,managers' effort degree can also be affected by dynamic basis compensation mechanism,managers' ability,the proportion of monopoly and the non-monetary utility sensitivity.