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Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model
Journal of Investment and Management
Volume 5, Issue 6, December 2016, Pages: 93-98
Received: Sep. 4, 2016; Accepted: Sep. 22, 2016; Published: Oct. 14, 2016
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Author
Zhang Chaoxiao, School of Management, Sichuan University of Science & Engineering, Zigong, China
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Abstract
A game model is designed to analyze the relation between employee’s ability structure and enterprise’s incentive structure. And some factors’ impaction on incentive structure is analyzed, such as employee’s ability, risk aversion, output error, and product price. The intrinsic mechanism of employee classification according to their ability level is also analyzed. The result reveals that under competitive working environment employee’s ability level should be kept consistent, employee with different ability levels can’t be classified by themselves, and piece rates should be kept direct ratio to employee’s ability level and product’s market trend. Although strict balanced incentive structure comprises of fixed wage and prize or promotion, balanced conditions can not usually be satisfied in real situation, so that fixed wage, piece rate wage, and prize or promotion should be combined to form a suitable proportion structure. Prize or promotion mechanism will strengthen the steepness degree of incentive structure, which will strengthen incentive effect under the condition of employee’s participation restriction.
Keywords
Ability Structure, Incentive Structure, Game Model
To cite this article
Zhang Chaoxiao, Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model, Journal of Investment and Management. Vol. 5, No. 6, 2016, pp. 93-98. doi: 10.11648/j.jim.20160506.11
Copyright
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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