Journal of Korean Society for Quality Management (품질경영학회지)

Korean Society for Quality Management (한국품질경영학회)
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The Compensation Gap between Top Management Team(TMT) and Employee, and Firm Performance : Moderating Role of Promotion Probability and Opportunity, and Satisfaction with TMT

경영진과 종업원 간 보상격차가 기업성과에 미치는 영향 : 승진가능성 및 기회, 경영진에 대한 만족도의 조절효과

  • 최석봉 (고려대학교 글로벌비즈니스대학)
  • Received : 2021.08.03
  • Accepted : 2021.08.13
  • Published : 2021.09.30
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Abstract

Purpose: Prior studies have sought to find antecedent to improve firm performance. However, research on compensation systems and employees' psychological mechanisms have been relatively limited. In this sense, this study has investigated the impact of compensation gap between TMT and employees on firm performance, and explored the factors that affect the above relationship. Specifically, this study analyzed the direct impact of compensation gap on firm performance. In addition, the process of compensation gap to firm performance is assumed to be significantly influenced by employees' recognized promotion system and satisfaction with TMT. Therefore, we examined moderating effects of both promotion probability and opportunity, and satisfaction with TMT on the relationship between compensation gap and firm performance. Methods: For empirical test, financial variables were collected from TS-2000 database, and moderating variables were collected form Job Planet for listed firms in Korea. We conducted hierarchical regression analysis to test hypotheses. Results: The findings of empirical analysis are as follows. First, compensation gap between TMT and employees had a positive effect on firm performance. Second, when promotion probability and opportunity was high, the effect of compensation gap on firm performance was strengthened. Third, when satisfaction with TMT was high, the positive effect of compensation gap on firm performance was also strengthened. Conclusion: Our findings have expanded prior research on human resource management and labor relation by identifying the positive role of compensation gap between TMT and employees on firm outcome. Moreover, our results also indicated that promotion probability and opportunity, and satisfaction with TMT, which has not been addressed well in previous studies, were important conditions enhancing the positive relationship between compensation gap and firm performance. Finally, this study suggest several theoretical and managerial implication with future research direction.

Keywords

References

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