The design of Intra-firm compensation dispersion is an important activity in compensation management.Scholars hold their different viewpoints of how compensation dispersion affects personal and organizational performance.Tournament theory suggests that compensation dispersion provides strong incentives to employees,leading to more work satisfaction,higher work efforts and improving enterprise performances.However,behavior theory suggests that greater compensation dispersion increases envy and dysfunctional behaviors among team members, adversely affecting personal and organizational performance.Both of these two theories are supported by some empirical studies.These two theories were reviewed,summarizing and analyzing their ideas.Future studies of this field are put forward.