| dc.description.abstract | The influence of salary structure on organization performance has always been an interesting topic of labor economics. Tournament theory proposed by Lazear and Rosen (1981) indicated that pay gap existing in all levels of organization can induce individuals to strive for promotion, and further more enhance organizational performance. Later on, Lazear (1989) also proposed another viewpoint on pay equity. When manager level and division of labor within an organization becomes more and more specialized , the organization’s performance hinges on the level of cooperation between managers, rather than the ability of individual managers. Therefore, companies emphasizing teamwork should take a more compressed wage
structure.
This research uses the information of both NBA’s and MLB’s past ten seasons (2000 to 2009 seasons) as the research sample to explore the influence of a team’’s salary structure on its performance, and to explore whether two different professional sports leagues are supported by different salary structure theories. Then this study further classifies both NBA and MLB players according to positions on the team ,and investigates the influence of their salary structures on winning percentage in the hope of providing advice on business strategies when the team pays players.
The empirical results show that no matter in NBA or MLB, the higher total salary a team has, the higher winning percentage it shows. In order to enhance team winning percentage, NBA salary distribution shows a relatively large salary structure; however, MLB presents a relatively compresed one. In terms of players’ positions, among NBA players, there is non significant the salary structure of strikers such as centers and forwards is obviously more
compressed, compared with that of backs; and the salary structure of MLB players at all fielding positions shows a more compressed salary structure.
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