The Relationship Between Compensation Fairness And Executive Turnover Rate

The resignation of senior management is not conducive to the development of the enterprise,which will not only cause the loss of outstanding talents,but also increase the economic burden of the enterprise.In recent years,frequent reports of executives' resignations have aroused widespread concern in the society.Studying the factors of executive turnover will help enterprises to take more targeted measures to reduce the turnover rate of executives.Based on the data of A-share Manufacturing Listed Companies in Jiangsu,Zhejiang and Shanghai from 2014 to 2018,this article explores the relationship between compensation fairness and executive turnover rate by using empirical research methods.On the basis of previous studies,this article improves the measurement method of compensation equity,and adopts two formulas to define compensation equity.Using two kinds of formulas to define the compensation fairness,this paper finds that the ratio of executive salary in different enterprises can affect the executive turnover rate.Education level can also affect the compensation fairness.In other words,it is more reasonable to take personal investment into account when calculating the fairness of salary.In addition,the relationship between compensation fairness and executive turnover rate is more obvious in companies whose assets are larger than industry mean.In addition,in order to test the influence of enterprise's asset size on the relationship between compensation fairness and the turnover rate of senior executives,enterprises are divided into high asset size sample group and low asset size sample group according to whether they are higher than the industry average asset size.Through comparison,the result shows that the relationship between the turnover rate of senior executives and salary fairness is more obvious in enterprises with assets larger than the industry average.The research shows that enterprises,especially those with high assets,need to pay more attention to the fairness of compensation to retain talents.