THE DYNAMICS OF SALARY NEGOTIATIONS: EFFECTS ON APPLICANTS' JUSTICE PERCEPTIONS AND RECRUITMENT DECISIONS

One aspect of attracting new employees that has historically been ignored by recruitment researchers is salary negotiations. In this study, we used a hypothetical scenario design to depict salary negotiation experiences in which we varied the levels of salary offer, the behavior of a company and its representative, and the deadlines for receiving a signing bonus. MBA students served as study participants who read the scenarios and responded to questions about perceived organizational attractiveness and job acceptance decisions—two important recruitment outcomes. As hypothesized, our results indicated that salaries, a company's responsiveness to candidate questions, and a company representative's expression of derogatory comments all impact recruitment outcomes. However, exploding signing bonuses had no significant effects, calling into question the negative connotation practitioners have of exploding compensation schemes. Our justice framework revealed that many of the effects that we found for our manipulations on participants' judgments regarding our recruitment outcomes were mediated by perceptions of organizational justice. Finally, we found some evidence of the frustration effect, as procedures that were considered fair worsened rather than mitigated the negative effects of unfair outcomes on job acceptance decisions.