Pay Mix Policies as (Dis)Incentives in Motivated Job Choice Decisions

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Abstract

Effective employee recruitment strategies are critical to organizational success. When faced with recruitment challenges, a common response by firms is to increase pay level, an incentive that is somewhat easily competed away as other firms follow suit. The following instead examines the incentive effects of pay mix in motivated job choice decisions. Relevant research is reviewed to establish the conceptual foundation. Then through experimental design, we investigate whether job postings that are alike on all substantive qualities except pay mix policy distinguish job appeal in a systematic way. Our findings provide preliminary support for stronger incentive effects with a work–life balance pay mix policy, relative to market-match and performance driven pay mix policies. Job postings that conveyed a work–life pay mix were rated as significantly more appealing by both men and women. Further, this pattern of preference was distinctly larger for women relative to men, which speaks to the practical aspect of attracting a gender-diverse applicant pool. Findings will inform research and practice on the incentive qualities of total compensation (pay and benefits), often given short shrift in comparison to the monetary component of compensation alone.

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