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The research methods I have used include primary data collection methods and secondary data collection methods or qualitative and quantitative research methods. For the secondary data collection methods, many companies’ salary structure and corporate reporting including ROA, Sales performance and productivity will be gathered from the internet and on the official websites of companies.

In order to collect the primary data, I will adopt a lot of effective methods. .First, face-to-face or on-the-phone interviewing HR managers and employees is a must in order to have an in-depth insight into the relationship between salary and employee performance or firm performance. Secondly, observation will be adopted so as to have a better idea about managers and employees’ opinions about salary and incentive power of reasonable pay level. Through the observation, I will get the relevant information to justify whether salary is the dominant factor influencing firm performance. Finally, survey research method will be utilized. Questionnaire, as one of the Quantitative research method takes as a very effective form of survey and. McDaniel & Gates (2008:286) said no survey research could be done if a questionnaire is not used. Thus, questionnaires will be used and this method is useful to our gathering the information how managers and employees feel about their satisfaction and performance.

Sampling is a must while dong survey or questionnaire. Some key international companies will be chosen. And in order to figure out if the importance of salary varies from industry to industry, different industries will be examined in the survey. Other factors will also be considered because one of the research questions is to determine whether salary and other factors together influence the firm performance. The following table can be used in the survey.

Industry Salary Age Working hours Responsibility Like work

Industry A

Industry B

Industry C

Industry D

The panel data model is taking multiple cross - section in the time sequence, selecting sample observations constitute the sample data simultaneously. Time-series and cross-section data are combined to one case that general specified sample of all are given in a certain time period, hence it can make a comprehensive observation of each sample unit.

The form and Classification of panel data model

The general form of the panel data model :

Panel data model is to consider that the change of the k economic indicators depend on the change of N individual in the time points.

Including

--the number of members that are in the individual cross-section, in this paper, N is the number of firms what we have selected as sample;

-- The total number of the observation period for each section members , in this article, is the number of the observation period, such as the period from 2006 to 2011, is 6;

-- The constant term of the model;

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