Study of Compensation Gap Effect on Corporate Performance

Abstract

Before 1970s, China applied traditional economic system in which equal distribution mechanism was used for compensation allocation. However, equal compensation distribution mechanism could no longer satisfy actual needs due to economic system reform. As a result, current distribution system appeared and is still working. Change of equal distribution leads to compensation gap and has raised the following questions: Can compensation gap affect employee’s work enthusiasm? How does it affect? Employee’s work enthusiasm can directly influence corporate performance, and thus makes compensation gap become a key factor in corporate development. The influence relation between compensation gap and corporate development is the research task of this thesis. Questions come one after another. Will different compensation gaps generate different influence effects? This thesis conducted investigational analysis on the above questions to confirm the influence relation in between. At last, it reached conclusions and thus can provide certain guidance for real life with practical research significance.