It is commonly assumed that compensation and rewards systems reflect the cultures of the organizations that implement them, but what type of message is being received by your organization’s job applicants? Recent research (Kuhn, 2009) used an experimental study to investigate how simple statements about an organization’s compensation structure in a job posting would affect how applicants view organizational culture. The researcher conducted an additional study to see how differences in compensation structure statements would affect applicants when they were forced to choose one organization over another.
THE RESEARCH RESULTS
The study found that applicants were more likely to perceive an organization’s culture as individualist when that organization’s compensation structure statement suggested that employees would be rewarded for individual performance or skill. In contrast, applicants were more likely to view an organization’s culture as collectivist when that organization included a compensation structure statement suggesting that employees would be rewarded with profit sharing across the company or from taking part in a high-performing team. This is a notable finding because, aside from commonly held assumptions, little empirical research exists on this topic.
WILL EMPLOYEES FIT IN?
The researcher also noted that some job seekers may be more likely to be high on idiocentrism, meaning that they view themselves as “independent entities” such that personal achievements would naturally take precedence over group achievements. The research found that the relationship between idiocentrism and the applicant’s attraction to a company was affected by the applicant’s perceptions of the company’s culture in the following way: Applicants who perceive the company’s culture to be highly individualistic and are more idiocentric themselves are more likely to be attracted to that company. On the other hand, applicants who perceive the culture as not very individualistic, and are less idiocentric themselves, the chances are greater that they will be attracted to that company.
THE BOTTOM LINE
In sum, perceptions of organizational culture matter, especially when job applicants are forced to choose one organization over another. And if perceptions of organizational culture are affected in part by the language used in job postings, organizations should be careful about whether they are sending the right or the wrong message to their job applicants. They should also consider that a job posting is a fairly inexpensive way to provide a realistic job preview to potential new employees, which could prevent eventual turnover.
Kuhn, K. (2009). Compensation as a signal of organizational culture: The effects of advertising individual or collective incentives. The International Journal of Human Resource Management, 20 (7), 1634-1648.
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