An effective recruitment strategy is crucial to organizational success and central to this is the employment proposal to prospective employees. A study at the University of Massachusetts looked at the various aspects of the HR offering, including work life balance, reward, and performance policies, as they relate to prospective employees’ job choice decisions. The results suggest that work life balance has a stronger incentive effect than reward and performance policies, and this was found to be the case across both men and women, although it was a greater incentive to women.
Key Topics: Pay mix policies; Incentives; Work–life balance
Title of Reviewed Article: Pay Mix Policies as (Dis)Incentives in Motivated Job Choice Decisions
Researchers: Kimberly K. Merriman, Lauren A. Turner, Monica Galizzi, and Michelle Haynes Baratz (University of Massachusetts).
Publication: Translational Issues in Psychological Science, 2016, Vol. 2 No. 2, pp. 184–191.
Setting the Scene
When it comes to attracting potential employees, the job posting is often the first engagement with such individuals, and these job postings give information that helps prospective employees evaluate if it is the right fit for them (Schmidt, Chapman, & Jones, 2015). Prior research found that providing information in these job postings relating to HR and pay policies was particularly useful for this evaluation (Schmidt et al., 2015).
Milkovich et al. (2010) noted a number of differing pay mix strategies that companies employ. The researchers of this study focus on three of these strategies, namely, a market match policy which focuses on competitive pay, a performance driven policy which focuses on performance related pay, and a work life balance policy which focuses on employee fringe benefits.
These strategies allow companies to allocate money to employees in varying ways and thus reinforce company values and distinguish themselves from competitor in the market. As such, the form of total reward can be used as an incentive, distinct from the value of total rewards for employees, and is potentially a more cost efficient way for companies to manage reward (Phillips & Gully, 2015), but in order to be effective in this companies need to understand the preferences on employees and potential employees. For example, research suggests that women place a higher value on work life balance and less value on pay when reviewing job options (Barbulescu & Bidwell, 2013; Konrad, Ritchie, Lieb, & Corrigall, 2000).
To further examine this area, the researchers reviewed the pay mix policies in the context of strategic recruitment. They specifically investigate the effect on job appeal of job postings which are the same aside from differing on aspects of pay mix policy. Extending prior research, the researchers also investigate if women place a higher value on work life balance than men.
How the research was conducted
This study had 92 participants, who were selected through Amazon Mechanical Turk (MTurk), which facilitates the recruitment of individuals for “human intelligence tasks”. All participants were US residents and from various backgrounds.
Based on a hypothetical job posting, participants were asked to assess the job appeal of the job posting. The researchers create job postings to represent three HR policy mix conditions, while keeping the job title and job description consistent. These three conditions were market match, performance-driven, and work–life balance. The market match condition focused on the fact that compensation was competitive. The performance-driven condition focused on the fact that compensation would be potentially high if employees performed well. Finally, the work–life balance condition focused on the fact that the company valued and supported high work–life balance.
Key Research Findings
Results found that there was no difference between men and women in their perceived likelihood of receiving a job offer.
Of the three job posting conditions, the work–life balance condition was found to be more appealing to potential employees than the market watch or performance driven conditions. Of the market watch or performance driven conditions, no difference in appeal was found.
The difference in appeal between the work life condition and the performance driven
and market match conditions was found to be greater for women.
The study findings suggest that both men and women favour work-life balance when compared with pay and performance focused reward strategies. The findings also show that this preference is significantly stronger in women than men, which is consistent with prior research, and highlights a growing recruitment and reward issue, namely the potential need to modify what companies offers in exchange for work depending on different demographics.
Organizational and Reward Implications
The results highlight that spending more of reward, such as offering higher salaries, isn’t always the most cost efficient strategy in attracting the best employees, with work life balance seen as a more attractive proposition to potential employees. Often when companies are faced with recruiting challenges the default response is to increase the compensation on offer, but this is a strategy that can be relatively easily replicated by competitors. Companies should consider tailoring their reward offering to the preferences of potential employees to create a cost efficient strategy and one that better serves the goal of attracting the best employees, while distinguishing itself from competitors.
At a time when the call for gender equality has never been louder, this research brings attention to some of the differences in reward preferences between the sexes. Companies should consider if their reward offering is attractive to the candidates they are trying to attract. The current study suggests that women could be discouraged from applying for jobs at a company that did not appear to encourage work life balance, thus potentially limiting the diversity of the candidates who apply for jobs at such companies.
This research offers a timely reminder that what attracts one prospective employee to a company may not attract another, and that companies should consider the need to cater for various needs in order to attract a diverse workforce. Given the nature of the participants used for this study, further research with larger and more specific participant groups will help to further validate the generalizability of this study’s findings.
Source Article: Merriman, K. K., Turner, L. A., Galizzi, M., & Haynesbaratz, M. (2016). Pay mix policies as (dis)incentives in motivated job choice decisions. Translational Issues in Psychological Science, 2(2), 184-191.
Published by: American Psychological Association
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Barbulescu, R., & Bidwell, M. (2013). Do women choose different jobs from men? Mechanisms of application segregation in the market for managerial workers. Organization Science, 24(3), 737–756.
Konrad, A. M., Ritchie, J. E., Jr., Lieb, P., & Corrigall, E. (2000). Sex differences and similarities in job attribute preferences: A meta-analysis. Psychological Bulletin, 126(4), 593–641.
Milkovich, G., Newman, J., & Gerhart, B. A. (2010). Compensation. New York, NY: McGraw-Hill Irwin.
Phillips, J. M., & Gully, S. M. (2015). Multilevel and strategic recruiting: Where have we been, where can we go from here? Journal of Management, 41(5), 1416 –1445.
Schmidt, J. A., Chapman, D. S., & Jones, D. A. (2015). Does emphasizing different types of person– environment fit in online job ads influence application behavior and applicant quality? Evidence from a field experiment. Journal of Business and Psychology, 30(2), 267–282.