Internal Compensation Gap and the Sustainable Development Ability of Manufacturing Enterprises &amp;lt;br/&amp;gt;—Based on the Moderator Variable of ESOP

Zhitao Peng

doi:10.4236/ojbm.2021.96163

Abstract

The article uses A-share to list manufacturing companies from 2015 to 2019 as a sample to examine the impact of the internal salary gap between executives and employees on the company’s sustainable development capabilities. The study found that there is an inverted U relationship between manufacturing executive and employee salary gap ratio and employee productivity and sustainable growth rate; ESOP can reduce the inhibition of excessive internal compensation on employee productivity; the detailed study found that ESOP design motivation can only improve from the employee perspective, such as low employee contribution ratio and wide employee participation range, excluding related industries. The article expands the scope of research of the internal compensation on the sustainable development ability of the manufacturing enterprises and the adjustment effect of the ESOP, thus providing reference value for the manufacturing enterprises to design and implement the ESOP.

Highlights

With the process of reform and opening up, many industries in China have absorbed foreign manufacturing skills and organizational governance knowledge to varying degrees
Under the measurement caliber of both internal compensation gap ratio, the primary term of IPG is significantly positive at the 1% level with coefficients of 0.0246 and 0.0.0148 respectively, indicating that the internal compensation gap promotes employee production efficiency; the secondary term of IPG is significantly negative at 1%, with coefficients of −0.0000966 and −0.0000355, which indicates that the large internal compensation gap ratio inhibited employee productivity without other factors
In the measurement caliber of both internal compensation gap ratios, the primary term of IPG is significantly positive at the 1% level with coefficients of 0.0018 and 0.00106, respectively, which indicates that the internal compensation gap promotes the sustained growth rate without other factors; the secondary term of IPG is significantly negative at 1%, with a coefficient of −0.00000894 and −0.00000319, which indicates that the internal compensation gap ratio suppresses the sustained growth rate without other factors

Summary

Introduction

With the process of reform and opening up, many industries in China have absorbed foreign manufacturing skills and organizational governance knowledge to varying degrees. There are many problems, such as internal control problems. Many companies began to use Western incentives to align executives’ interests with the owners of the company, with a result of rising ex-. In the context of Confucian culture emphasizing the idea of “equality” (Chen et al, 2020), and our country’s social system highlighting common prosperity, the “Sky-high salaries” of corporate executives will always arouse public attention and discussion

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Conclusion