People don’t ask for more pay when company is ‘good’

"There's an implicit assumption that money and altruism don't mix. Money taints attempts to do good. Even if job candidates might not necessarily subscribe to this view, they're assuming that hiring managers will," says Insaya Hussain. (Credit: Getty Images)

People applying for jobs at altruistic organizations may feel too guilty to ask for more pay, research finds.

Both for-profit and nonprofit organizations increasingly employ “social impact framing” that emphasizes that their work has welfare benefits for society.

Although companies might have entirely noble intentions when using social impact framing, a recent study by Insiya Hussain, assistant professor of management at the McCombs School of Business at the University of Texas at Austin, illustrates how it may work against prospective employees during salary negotiations. Specifically, job candidates exposed to such messaging feel it would be against company norms to ask for higher pay.

“This speaks to a broader social phenomenon about how we view money when it comes to doing good,” Hussain says. “There’s an implicit assumption that money and altruism don’t mix. Money taints attempts to do good. Even if job candidates might not necessarily subscribe to this view, they’re assuming that hiring managers will.”

The research appears in the journal Organization Science.

Hussain and coauthors found that job candidates who were exposed to social impact framing refrained from negotiating for higher salaries because they felt uncomfortable with that request.

They were concerned that asking for a greater material reward when an organization emphasized altruistic goals would be seen as inappropriate by those with hiring power, and they might thus be viewed unfavorably.

The researchers describe this attitude as a “self-censoring” effect, which Hussain says is a novel finding for research on social impact framing and wage demands. Prior work assumed that candidates sacrificed pay for meaningful work. Hussain and colleagues show this effect may be driven by job candidates feeling uncomfortable with such negotiation.

Whether companies are intentionally using social impact framing to suppress pay is unclear. But, regardless, the researchers suggest managers should be aware of what it may be costing the company in terms of human resources. They suggest that if managers are educated about their motivation purity bias, they can better temper their approach to prospective employees who ask about material rewards.

They also recommend managers create greater transparency about company norms and values regarding compensation, and that they offer job rewards based on objective criteria instead of salary negotiations.

“Job seekers could consider whether companies that stress social impact take care of their own employees—financially or otherwise,” Hussain says. “And companies shouldn’t assume that extrinsically motivated workers don’t care about the job and aren’t willing to work hard to perform well.”

Coauthors are from Singapore Management University and INSEAD.

Source: Judy Kinonen for UT Austin