Abstract
Pay, the main component of enterprise cost, serves as an effective tool for enterprises to attract, motivate and retain employees. The research on the pay mechanism effect upon enterprise performance is aimed at maximizing the efficiency of pay strategy while maintaining labor cost. Employees’ perception of pay strategy mainly comes from the pay dispersion. This study attempts to examine the mechanism of pay dispersion and enterprise performance through investigating157 enterprises across seven different industries mainly including Manufacturing Industry (N = 55), Software Service (N = 41), Wholesale and Retail Trade (N = 21). While controlling variables at industry and enterprise level, this research applies hierarchical linear regression model into analyzing association between pay dispersion and performance. The results show that (1) The relationship between the horizontal pay dispersion and the profit margin is a nonlinear correlation. (2) The effect of horizontal pay dispersion on sales margincould be moderated by pay level.
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