Individual Differences in Attractiveness of Jobs Based on Compensation Package Components

Abstract

The primary purpose of the present study was to examine the effect of salary level, amount of leave per year, the extent of cost-sharing for health care insurance coverage, and type of retirement plan on individuals' job choice within a United States employment context. Salary, amount of vacation time, cost of health insurance, and type of retirement plan predicted the likelihood that individuals would apply for a position as well as accept the position if it were offered to them. While the type of retirement plan had an effect, there was virtually no difference based on whether the retirement plan was a defined benefit pension plan, a 401 K plan, or a company stock plan. There were no interactions between compensation plan components suggesting recruits do not consider salary as a substitute for benefits. Marital status, benefit history, attitudes towards earnings, and risk propensity predicted the relative importance placed on salary and specific benefits in the compensation package.Key words compensation . employee benefits . recruitment . medical insurance . retirement plan Compensation systems have long been considered as a factor impacting organizations' ability to attract and retain employees (Bretz et al. 1989;Lawler 1990). The effect of non-wage benefit packages on the attraction of employees would seem to be especially important since "fringe" benefits as a percentage of total payroll costs are growing (Bureau Employ Respons Rights J (2010) 22:195-211 of Labor Statistics 2006Harris 1993;Hart and Carraher 1995), and research suggests that employees undervalue typical benefit packages by as much as 30% (Gerhart and Milkovich 1992). However, surprisingly little empirical research has been conducted to determine how benefits influence individuals' job choice decisions. Therefore, the primary purpose of the present study was to examine the effect of salary level, amount of leave per year, the extent of cost-sharing for health care insurance coverage, and type of retirement plan on individuals' job choice. Additionally, individuals' decisions may be affected by work values and attitudes as well as background and demographic variables (e.g., Judge and Bretz 1992;Hyde and Weathington 2006;Ravlin and Meglino 1987a, b). Thus the secondary purpose of this study was to examine the relation of various background and attitudinal variables on the importance of the four measured aspects of the compensation package on job choice decisions.

Behavioral Effects of Sustainability‐Oriented Incentive Systems

“…Against this background, several studies examine the effects of different characteristics of incentive systems on employee behavior. Specifically, they examine the effect of type of incentive system (Turban and Keon, ; Kuhn and Yockey, ; Hannan et al ., ; Weibel et al ., ), salary level (Aiman‐Smith et al ., ; Hannan, ; Tetrick et al ., ), type of retirement plan (Tetrick et al ., ), career chances (Aiman‐Smith et al ., ) and type of feedback (Hannan et al ., ) on employee behavior (e.g. employee attraction, work motivation).…”

Benefits and Strategic Outcomes: Are Supplemental Retirement Plans and Safer Driving Related in the U.S. Trucking Industry?

“…The findings of studies looking at the employee preferences for firms with supplemental retirement benefits have found results consistent with studies of plan participation and investment decisions. Demographics such as age and marital status have been identified as variables related to stronger preferences for retirement plans (Dencker et al, ; Tetrick et al, ). These findings are consistent with both the P‐O fit view and utility view of benefit attraction.…”

“…Like all insurance plans, they are a form of reducing risk because they provide greater certainty of income and less variance in its distribution. Thus, applicants with a greater general propensity against risk are more attracted to firms that offer a supplemental retirement insurance plan (Tetrick et al, ) and are more likely to continue working for them (McCarthy, ; Vardaman, Allen, Renn, & Moffitt, ).…”

“…We propose a number of mechanisms that would suggest such a relationship. This includes the notion that companies with retirement plans are more likely to attract employees who are less risk seeking and therefore will also be less risk seeking in their actual driving behaviors, resulting in lower accident rates and fewer incidents of illegal driving behaviors (Dencker, Joshi, & Martocchio, ; Tetrick, Weathington, Da Silva, & Hutcheson, ). Other mechanisms include offering supplemental retirement plans as part of a paying‐above‐the‐market compensation strategy or as part of a high‐performance work system (HPWS).…”

The influence of corporate social performance on employer attractiveness in the transport and logistics industry

“…Turban and Keon, 1993;Tetrick et al, 2010). Therefore, we assume a trade-off between potential employees' (different) CSR-related values and their pay expectations as job seekers.…”