Can “Meaningful Impact” keep your salary down?

How  does a company’s mission and values affect applicants’ willingness to negotiate salary or make compensation demands?

Marko Pitesa at Singapore Management University is part of a research team that investigated language and framing around “social impact” in jobs. They find that the intrinsic fulfilment or moral satisfaction of a job as being “For The Greater Good” can hold back salary expectations.

Read the original article:  https://doi.org/10.1287/orsc.2023.1675 

Transcript:

Hello, and welcome to ResearchPod, thanks for listening and joining us today.

A passionate job seeker stumbles upon a job posting from a socially conscious organization. They are thrilled by the opportunity to make a positive impact on the world, but then they notice the salary. Let’s say it doesn’t quite align with their expectations. What’s their next move? Try and negotiate for more, or does that risk being perceived as compromising their commitment to the organisation’s mission?

Today, we’re immersing ourselves in a thought-provoking study by Associate Professor Marko Pitesa of Singapore Management University, an experienced academic who has conducted his work as part of an international team. Their investigation looks at whether job candidates inadvertently believe that requesting extrinsic rewards, such as a higher salary, is counterintuitive to the prosocial image of an organisation.

We will delve into the intersection of social impact organizations, job candidates, and the complexities of compensation. Research also denotes that some managers assume that a job candidates interest in extrinsic work motivation means that their intrinsic motivation is lower, this is not always the case.

Let’s start by introducing the concept “Social impact framing”. It refers to organisations framing themselves around missions of goodwill, dedicating themselves to the greater good. They tell employees that their work is changing the world for the better. By doing so, a positive social impact is achieved through work. Here’s the intriguing part: Social Impact Framing often attracts employees with strong intrinsic motivation—those genuinely passionate about the mission to help people. But it may also inadvertently create an expectation that employees should accept lower pay because the fulfilment of that mission should suffice. Companies can display an expectation that candidates should accept work as desirable because it meets their intrinsic needs.

However, the question arises; how do organisations use language and framing around social impact? If so, showcasing the intrinsic fulfilment or moral satisfaction of a job as being “For The Greater Good” can result in applicants hesitancy to speak up about extrinsic needs, like pay, for fear of conflicting with the organisation’s values and expectations. This could constitute a “motivational norm violation” – the social and professional faux pas of saying anything that might be seen as against the organisation’s norms and standards about being motivated for the right reasons. As a result, candidates suppress their compensation demands.

Before we dive into the study, let’s set the stage. Have you ever wondered how a company’s mission and values affect applicants’ willingness to negotiate your salary or make compensation demands? Marko Pitesa at Singapore Management University is part of a research team that aimed to answer precisely that question through a series of studies.

His research sets out three hypotheses, investigated across five studies. Hypothesis 1 asked whether ‘An organization’s use of social impact framing for work is positively related to job candidates perceived motivational norm violation in making compensation demands.’

In one of these studies, conducted at a Mid-Atlantic university, Pitesa and his team gathered 438 undergraduate students as participants. They were asked to watch an introductory video featuring a CEO of a hiring company. The company was in the process of recruiting students for positions to supervise their recruitment table.

Now, here’s where it gets interesting. The participants were divided into two groups: one exposed to the “social impact framing” and the other to the “control condition.” In the social impact framing group, the company was presented as a mission-driven organisation dedicated to making the world a better place through quality education and mentorship. The work was described as meaningful and driven by a higher purpose. In contrast, the control group received an equally positive description, but the focus was on skills and competency, without emphasising social impact.

So, what did the study reveal? Well, it turns out that the participants in the social impact framing group perceived a higher level of “motivational norm violation” when it came to making compensation demands. In other words, they felt that speaking up about pay would deviate from the organization’s norms and values. On the flip side, the control group showed a greater willingness to negotiate their compensation, and they even requested higher pay compared to the social impact framing group. This suggests that emphasising social impact may deter candidates from seeking higher compensation, as they perceive it as a deviation from the organisation’s values. This, overall, provides strong support for Hypothesis 1.

Now, let’s take a look at Hypothesis 2; ‘An organization’s social impact framing is negatively related to job candidate compensation demands.’

Just like in the previous study, the social impact framing group was exposed to an introductory video featuring a CEO who portrayed the hiring organization as a socially conscious entity. In this case, the company’s mission was to improve education by helping students expand their vocabulary through meaningful work. In this experiment, participants were randomly assigned to either the “social impact framing group” or the “control group.” The researchers posed as a hiring company with a unique task – recruiting workers to create high-quality sentence examples for words that 7th graders could incorporate into their vocabulary. For example, if the word “reiterate” was given, the participant could say “the teacher asked the student to reiterate her question as it was noisy in the classroom.”

There were two measures of compensation introduced, participants were told that the company offers $1.50 for a task but they could request a higher amount. Participants were then asked to report their willingness to negotiate the payment by selecting “no” to a higher amount or “yes”, and therefore opt in for a higher amount. Those who selected “yes” were asked to use a sliding scale between $1.50 and $4.

As suspected following from the first study, that participants exposed to social impact framing were less willing to negotiate their compensation. In fact, a significantly lower number of them chose to request a higher amount of money for their work when given the opportunity. This supports hypothesis 2 – that social impact framing would negatively associate one’s willingness to negotiate. In other words, the more a company emphasizes its social mission, the less likely candidates are to demand higher compensation.

Onto the next one, Hypothesis 3 – ‘Perceived motivational norm violation mediates the negative relationship between an organization’s social impact framing and job candidate compensation demands’.

In another study, the team recruited 900 adults from the online platform Prolific. These participants were informed that they would take part in a work simulation, stepping into the shoes of a job candidate. They were shown the same videos used in previous studies, highlighting the hiring company’s social impact framing. They were given ratings from 1 which meant “strongly disagree” to 7 which is “strongly agree”. Then they were asked to what extent they would feel comfortable asking for monetary compensation for work being offered. They were also asked how likely they would ask for more money, and lastly, if pay was requested how much more money would they ask for.

Participants exposed to the social impact framing condition reported feeling less comfortable about asking for more pay compared to those in the control condition. What’s more is that the perceived motivational norm violation played a critical role in those negotiating tendencies. There was a negative overall effect on social impact framing against the measures of compensation demands, as well as a participant’s comfort with negotiating, and their willingness to negotiate.

Overall, this research highlights that the effect of social impact framing in hiring and retaining employees goes beyond mere perception. It influences candidates’ comfort levels, their willingness to negotiate, and the actual demands they make when it comes to compensation. Perceived motivational norm violation emerges as a key factor in this process. The way a company presents its values and mission can significantly influence job candidates’ perceptions of compensation negotiations. The power of social impact framing in shaping these perceptions is indeed a thought-provoking topic.

Thank you for joining us today on ResearchPod. Stay tuned for more captivating research discussions in the episodes to come and be sure to check out the links in today’s episode description for more on Marko Pitesa’s research.

Until next time, see you soon!

Also published on: https://researchpod.org/business/meaningful-impact-keeps-salary-down

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