TITLE:
Does the Regional Sense of Social Fairness Really Narrow the Executive-Employee Pay Gap?
AUTHORS:
Ting Guo
KEYWORDS:
Social Fairness, Executive-Employee Pay Gap, Employee Productivity, Company Performance
JOURNAL NAME:
Modern Economy,
Vol.10 No.6,
June
28,
2019
ABSTRACT: Based on Chinese traditional Confucianism and under
the policy background of “salary limit order”, this paper uses tournament
theory and social comparison theory to research and analyze the relationship between regional social fairness and the executive-employee
pay gap, its effect on employee productivity and the effect of the matching
relationship on company performance incentives. Based on the questionnaire
survey of China’s comprehensive social survey from 2010 to 2016 and the data of
all A-share listed companies in China, we find that the regional sense of
social fairness will significantly increase the salary gap of companies, and
the higher the sense of social fairness, the greater the incentive effect of
the salary gap on the production efficiency of ordinary employees, and the
correct match between the sense of social fairness and the salary gap will
promote the development of the performance of local enterprises. This means
that the cultural environment will deeply affect the micro-governance of
enterprises. We should attach importance to the role of hidden factors in the executive-employee
pay gap, promote the rationalization of the income distribution pattern, and
promote the development of the economy stably.