The Mechanism Of Pay Dispersion On Team Performance

As a critical topic of design and management of pay system,pay dispersion has been receiving much more attention from scholars and managers.For a long period of time,there has been no consensus on the effect of pay dispersion on team performance.Team performance may be positively or negatively influenced with the increase of pay dispersion.Employing the Championship Theory and Organizational Politics Theory,this study explores the situation where the incentive effect of pay dispersion and the cost of influence activities coexist,focusing on the mechanism of pay dispersion on team performance,considering the mediating effect of employee participation.The results demonstrate that there is an inverted U-shaped relationship between pay dispersion and team performance,as well as the relationship between pay dispersion and employee participation.Employee participation completely mediates the inverted U-shape relationship between pay dispersion and team performance.Moreover,trust between leaders and members exerts a moderating effect on the inverted U-shaped relationship,with the knowledge-based trust enhancing it.We can come to a conclusion that there exists a most appropriate level of pay dispersion that can help the team performance achieve the best.When establishing or improving the pay system,leaders or other policy-makers should well consider the possible negative influence of excessive pay dispersion,carefully watch out the change of employee participation and make adjustments in time.In addition,what the trust based on can affect the team performance as well.Knowledge-based trust centering around mutual understanding and predictable behaviors can enlarge the incentive effect of pay dispersion,but may increase the influence cost at the same time.Therefore,while constructing the knowledge-based trust relationship,objective performance appraisal and other rigid means should be included to avoid the motivation of implementing influence activities,thus reducing the negative effect of influence cost on team performance.