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Pay Systems in Chinese State-Owned Enterprises: A Review

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Intellectual Contribution by Lihua Wang

Contribution Title

Pay Systems in Chinese State-Owned Enterprises: A Review


Chinese Management Studies


Joel Nicholson and Jun Zhu




The design of an effective compensation system has become one of the most important tasks for managers in state-owned enterprises in China under the current market-oriented economy. While some researchers have begun to focus on the wage system in Chinese state-owned enterprises, the literature is at best fragmented. This paper provides a comprehensive review and critique of what we already know about pay systems in Chinese state-owned enterprises and identifies the gaps in the literature. We also provide suggestions on three important sets of questions for future research: (1) Why do some firms pay their employees more than other firms? (2) Why do we observe different types of internal pay structures among firms? What are the consequences of these different structures? (3)Why is the link between pay and performance weak in some firms but strong in others? Under what conditions pay-for-performance enhances the firm performance? We hope our effort will stimulate more research in this area.

Complete Citation

Wang, L., Nicholson, J. and Zhu, J. (2009). "Pay Systems in Chinese State-Owned Enterprises: A Review." Chinese Management Studies, 3(4), 328-355.


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