Research On Situational Factors Of The Incentive Effect Of The Pay Gap

At present,there are two major theoretical system,discussing the incentive effect of the gap of salary,and the two theoretical system is controversial.It has not been unified so far.And the essences of existing research is focused on corporate performance,and no further empirical test.Executives in practice,the phenomenon of excessive remuneration is always common on,the pay gap is also expanding.This paper is mainly aimed at revealing the reasons of the debate through the different explanation of compensation gap in different points situation.Using data from China's Shanghai and Shenzhen A-share listed companies from the year 2010 to 2015 to In-depth analysis of the effective situation to the pay gap's incentive result.Firstly,it discussed the effect of the situation of promote to the executive pay gap's incentive performance.The situation of promote is divided into time limit if there are opportunities for advancement as well as the size and the time.The target is to analysis the different performances of the executive pay gap.Secondly,it explored the effect of the situation of comparison to the executive pay gap's incentive performance.It mainly means ordinary employees' reaction to the longitudinal wage gap and horizontal gap,in order to test two kinds of compensation gap inspired employee' motivation or makes employees feel exploited and slacking.Finally it from the two aspects to describe the appropriate situation to gap of salary incentive effect.When it explores the first situation,it found that the incentive effect was chanced after the changing of the promotion.In the situation of internal promotion,salary gap can significantly improve enterprise performance;but the benefit was losing both in the situation of inside and outside promotion & the external promotion.In further,in the situation of internal promotion,the time of promotion had influence to the incentive effect of the pay gap.Only the promotion time was limited in a reasonable scope,can the incentive effect of pay gap achieve to the largest.When it explores the second situation,this paper tested the effect of two kinds of pay gap on employee's work enthusiasm,that is,the vertical pay gap and the horizontal pay gap between employees.It is found that the horizontal pay gap has a greater impact on employees than the vertical pay gap,and the greater the horizontal pay gap,the better the performance of the firm.Using the method ofmatching samples to re-examine the relationship between horizontal pay gap and corporate performance,the study found that compared to the lower staff salaries,the higher staff salaries can really improve business performance.Compared to the central and western regions,the eastern region of high pay companies is more conducive to improving performance.Accordingly,this paper will provide reference for the staff positions and salary settings.