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Title: Workers' incentives in a rapidly changing economy : contextual analysis on the choice of payment systems in Chinese automotive companies
Author: Huang, W.
Awarding Body: University of Cambridge
Current Institution: University of Cambridge
Date of Award: 2009
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Why do managers keep adopting and operating performance pay even if it frequently does not work as intended? The answer calls for a contextual analysis of the factors that influence managerial choice of payment systems. China provides a particularly interesting country for research, because its relatively young market economy has a recent history of heavy state intervention. This thesis uses case study research method which draws on two competing theories: Institutional Theory and New Economics of Personnel. Five hypotheses deriving from this framework provide the basis for an analysis of both national Chinese survey data and of six detailed case studies at enterprise level in the Chinese automotive industry. The analysis suggests that the six Chinese automotive companies were influenced by external institution isomorphic pressures to adopt market-oriented, performance-related and job-based payment systems. Pressures arose from both market reforms and government promoted national wage policies. The strength of these companies’ response appeared to be influenced by their ownership characteristics: whether state-owned, privately owned, or jointly owned with foreign firms. Strategic considerations of product market competition and of job programmability were among the key determinants of payment systems and of the degree of leverage of performance pay. In addition, core employees’ perceptions of equity and comparability played an important role in reshaping the payment systems and pay structures. This thesis concludes that management have had to reconcile these competing demands on the payment systems and pay structures. The consequence is that, in practice, payment systems and practices diverged substantially from firms’ official pay strategies.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available