{"title":"Do companies compare employees’ salaries? Evidence from stated-owned enterprise group","authors":"Chuang Lu , Yuhao Niu","doi":"10.1016/j.cjar.2022.100252","DOIUrl":null,"url":null,"abstract":"<div><p>The mechanism by which enterprises set salaries is vitally important to employees and is especially relevant to the reform of state-owned enterprises (SOEs). This paper investigates the effect of comparing employee compensation based on a sample of A-share SOE groups from 2008 to 2018. We find that when employee compensation at one company sharply increases, the employee compensation of other companies controlled by the same group will increase sharply in the following year. Further analysis shows that when employees’ sense of unfair compensation is stronger, when employees are less replaceable and when enterprises’ ability to pay is stronger, the effect of employee pay comparison is stronger. Increased employee salary does not improve enterprise performance, however, suggesting that such salary adjustment is ineffective. This paper expands the research on employee compensation and provides useful insights for optimizing the design of compensation contracts and promoting compensation reform in SOEs.</p></div>","PeriodicalId":45688,"journal":{"name":"China Journal of Accounting Research","volume":null,"pages":null},"PeriodicalIF":1.9000,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S1755309122000326/pdfft?md5=45854216ffe0ef88ea0db42ef002d9bf&pid=1-s2.0-S1755309122000326-main.pdf","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"China Journal of Accounting Research","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1755309122000326","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 1
Abstract
The mechanism by which enterprises set salaries is vitally important to employees and is especially relevant to the reform of state-owned enterprises (SOEs). This paper investigates the effect of comparing employee compensation based on a sample of A-share SOE groups from 2008 to 2018. We find that when employee compensation at one company sharply increases, the employee compensation of other companies controlled by the same group will increase sharply in the following year. Further analysis shows that when employees’ sense of unfair compensation is stronger, when employees are less replaceable and when enterprises’ ability to pay is stronger, the effect of employee pay comparison is stronger. Increased employee salary does not improve enterprise performance, however, suggesting that such salary adjustment is ineffective. This paper expands the research on employee compensation and provides useful insights for optimizing the design of compensation contracts and promoting compensation reform in SOEs.
期刊介绍：
The focus of the China Journal of Accounting Research is to publish theoretical and empirical research papers that use contemporary research methodologies to investigate issues about accounting, corporate finance, auditing and corporate governance in the Greater China region, countries related to the Belt and Road Initiative, and other emerging and developed markets. The Journal encourages the applications of economic and sociological theories to analyze and explain accounting issues within the legal and institutional framework, and to explore accounting issues under different capital markets accurately and succinctly. The published research articles of the Journal will enable scholars to extract relevant issues about accounting, corporate finance, auditing and corporate governance related to the capital markets and institutional environment.
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