The purpose of this paper is to provide a comprehensive review and critique of what we already know about pay systems in Chinese state‐owned enterprises, to identify the gaps in the literature and to stimulate more research in this area.
The paper first describes the policy issues at the macro‐level (government policies) in order to put micro‐level pay practices in a pertinent context. Then the paper provides a detailed review and critique on current empirical studies on pay practices in Chinese enterprises, their antecedents and consequences. Finally, the paper identifies potential research questions and provides some directions for future research.
The paper concludes from the extensive review of the current literature that the following research areas merit attention: Why do some firms pay their employees more than other firms? Why do we observe different types of internal pay structures among firms? What are the consequences of these different structures? Why is the link between pay and performance weak in some firms but strong in others? Under what conditions pay‐for‐performance enhances firm performance?
The paper is one of the most comprehensive reviews of the literature on compensation practices of Chinese companies.
