Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model

Zhang Chaoxiao

doi:doi:10.11648/j.jim.20160506.11

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Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model

Zhang Chaoxiao

Published in Journal of Investment and Management (Volume 5, Issue 6)

Received: 4 September 2016 Accepted: 22 September 2016 Published: 14 October 2016

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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.

Published in	Journal of Investment and Management (Volume 5, Issue 6)
DOI	10.11648/j.jim.20160506.11
Page(s)	93-98
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Ability Structure, Incentive Structure, Game Model

References

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[12]	Michael S. Weisbach (2006), “Optimal Executive Compensation Vs. Managerial Power,” NBER Working Paper.
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APA Style

Zhang Chaoxiao. (2016). Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. Journal of Investment and Management, 5(6), 93-98. https://doi.org/10.11648/j.jim.20160506.11

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ACS Style

Zhang Chaoxiao. Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. J. Invest. Manag. 2016, 5(6), 93-98. doi: 10.11648/j.jim.20160506.11

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AMA Style

Zhang Chaoxiao. Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. J Invest Manag. 2016;5(6):93-98. doi: 10.11648/j.jim.20160506.11

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@article{10.11648/j.jim.20160506.11,
  author = {Zhang Chaoxiao},
  title = {Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model},
  journal = {Journal of Investment and Management},
  volume = {5},
  number = {6},
  pages = {93-98},
  doi = {10.11648/j.jim.20160506.11},
  url = {https://doi.org/10.11648/j.jim.20160506.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20160506.11},
  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.},
 year = {2016}
}

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TY  - JOUR
T1  - Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model
AU  - Zhang Chaoxiao
Y1  - 2016/10/14
PY  - 2016
N1  - https://doi.org/10.11648/j.jim.20160506.11
DO  - 10.11648/j.jim.20160506.11
T2  - Journal of Investment and Management
JF  - Journal of Investment and Management
JO  - Journal of Investment and Management
SP  - 93
EP  - 98
PB  - Science Publishing Group
SN  - 2328-7721
UR  - https://doi.org/10.11648/j.jim.20160506.11
AB  - 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.
VL  - 5
IS  - 6
ER  -

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Author Information

Zhang Chaoxiao

School of Management, Sichuan University of Science & Engineering, Zigong, China

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APA Style

Zhang Chaoxiao. (2016). Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. Journal of Investment and Management, 5(6), 93-98. https://doi.org/10.11648/j.jim.20160506.11

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ACS Style

Zhang Chaoxiao. Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. J. Invest. Manag. 2016, 5(6), 93-98. doi: 10.11648/j.jim.20160506.11

Copy | Download

AMA Style

Zhang Chaoxiao. Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model. J Invest Manag. 2016;5(6):93-98. doi: 10.11648/j.jim.20160506.11

Copy | Download

@article{10.11648/j.jim.20160506.11,
  author = {Zhang Chaoxiao},
  title = {Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model},
  journal = {Journal of Investment and Management},
  volume = {5},
  number = {6},
  pages = {93-98},
  doi = {10.11648/j.jim.20160506.11},
  url = {https://doi.org/10.11648/j.jim.20160506.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20160506.11},
  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.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Studying on the Relation Between Ability Structure and Incentive Structure Based on a Game Model
AU  - Zhang Chaoxiao
Y1  - 2016/10/14
PY  - 2016
N1  - https://doi.org/10.11648/j.jim.20160506.11
DO  - 10.11648/j.jim.20160506.11
T2  - Journal of Investment and Management
JF  - Journal of Investment and Management
JO  - Journal of Investment and Management
SP  - 93
EP  - 98
PB  - Science Publishing Group
SN  - 2328-7721
UR  - https://doi.org/10.11648/j.jim.20160506.11
AB  - 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.
VL  - 5
IS  - 6
ER  -

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