Performance Pay in China: Gender Aspects

Abstract

We provide an in‐depth analysis of gender differences in performance pay in China based on a unique dataset — the Life Histories and Social Change in Contemporary China — that provides information on the different components of pay including performance pay and base pay as well as a wide array of pay determining characteristic. The share of performance pay is documented and its determinants, including gender, analysed. Particular attention is paid to gender differences in the different dimensions of performance pay: the probability of receiving it; the magnitude conditional upon receiving it; and their product being the overall unconditional magnitude. Gender differences in these dimensions are decomposed into components due to male–female differences in the endowments of characteristics that explain these dimensions of pay, and gender differences that arise even when men and women have the same endowments of such characteristics with the later component, often taken to reflect discrimination.

Gender Earnings Differences in China: Base Pay, Performance Pay, and Total Pay

“…See, for example, Meng (1998); Ng (2007); Wang & Cai (2008); and Zhang et al, (2008). A detailed analysis of the determinants of the share of performance pay in total compensation is provided in Xiu and Gunderson (2011). Since the mid-1990s, there has been a growing literature on gender pay differentials in China. The studies tend to find a substantial unadjusted earnings gap, 2 which has been increasing in the past two decades (i.e., the ratio of female-to-male earnings has been declining).…”

“…Although research findings have shown an increasing portion of total pay in the form of bonuses (Warner 1996;Chiu, Wai-Mei Luk, and Li-Ping Tang 2002), most organizations believe that differentials in the bonus payments between individuals and between groups of individuals should be minimized so as to maintain harmonious and stable relations within the organization (Cooke 2001). Xiu and Gunderson (2011) provide more detailed analysis of the determinants of the different components of pay as well as gender or pooled weights) or the extent to which controls are added for factors such as firm ownership or occupation or rank (models 1-3). The majority (between 2/3 and 80%) of the malefemale pay gap appears to be attributable to pay differences for the same pay-determining characteristics.…”

“…See, for example, Meng (1998); Ng (2007); Wang & Cai (2008); and Zhang et al, (2008). A detailed analysis of the determinants of the share of performance pay in total compensation is provided in Xiu and Gunderson (2011).…”

“…Although research findings have shown an increasing portion of total pay in the form of bonuses (Warner 1996; Chiu, Wai‐Mei Luk, and Li‐Ping Tang 2002), most organizations believe that differentials in the bonus payments between individuals and between groups of individuals should be minimized so as to maintain harmonious and stable relations within the organization (Cooke 2001). Xiu and Gunderson (2011) provide more detailed analysis of the determinants of the different components of pay as well as gender differences in different dimensions of the performance pay component: the probability of receiving performance pay; the magnitude conditional upon receiving it; and their product being the overall conditional magnitude. They find that the discriminatory component is larger for the conditional magnitude where discretion can be more at play, and smaller for the probability of having a performance pay system where discretion is less likely to be at play.…”

Towards a hybrid model? A systematic review of human resource management research on Chinese state-owned enterprises (1993–2017)

“…The career experiences (e.g., recruitment, pay, and promotion) of men and women are different in Chinese SOEs due to gender discrimination Leung (2002); Xiu and Gunderson (2013) Resourcebased view…”