Owen School Research Pinpoints Lasting Effect from Perceived Lack
of Consideration and Respect in Up and Down Job Markets
October 15, 2008
Media Contact: Scott Addison
Public Relations | Gabbe Group
(212) 220-4444 | scott.addison@gabbe.com
Companies competing to secure the best talent should tread more carefully when it comes to the use of aggressive job negotiation tactics, indicates a new study from the Vanderbilt Owen Graduate School of Management.
The research, conducted by Vanderbilt professors Ray Friedman and Neta Moye, finds that the perceived mistreatment of potential employees during the recruitment process has a significant and lasting impact on workers’ long-term relationships with employers. In fact, the use of aggressive or high-pressure negotiation tactics can significantly decrease an employee’s long-term commitment to a company, as it signals a lack of consideration and respect that can poison the perspective of new employees for months and even years.
To pinpoint the impact of these aggressive tactics, the researchers surveyed MBA students and alumni of a southeastern university about their recruitment experience in a wide variety of industries, including manufacturing, consulting, technology, health care, entertainment, investment banking, government, accounting, non-profit and education. In the first experiment, 68 graduate business alumni who graduated between 1998 and 2002 were asked to recall the recruitment process for their current job – including the employer’s negotiation tactics – and the employee’s current turnover intentions. The second analysis posed the same questions over a six-month time period to 135 graduating MBAs from the same university who had just accepted a post-graduation job offer.
“Exploding Job Offers” and Other Aggressive Tactics
Employers who negotiate aggressively often use such tactics as slow response, bullying and so-called “exploding job offers” to secure a commitment from potential employees. “In the case of an exploding job offer, an applicant might receive an offer of a $100,000 salary with a $15,000 signing bonus, but with each day that passes without the applicant accepting the offer the signing bonus shrinks by $3,000,” said Friedman, Brownlee O. Currey Professor of Management at the Owen School.
The impact of such aggressive negotiations transcends both good and bad job market environments, according to the study. When jobs are plentiful, organizations that pressure their recruits lose potentially valuable employees because the applicants feel they are being unfairly pressured during the negotiation process. In tighter recruitment markets, applicants who feel they are mistreated during the negotiation might still accept the job from the offending organization, but the effects of the hostility can linger for years.
The potential harm of these high-pressure tactics should cause employers to make their recruiting strategies more friendly. “While these actions are designed to reduce job applicants’ negotiating power, it’s pretty clear that it is the employer that ultimately suffers the consequences,” Friedman said.
The study – “The Lingering Effects of the Recruitment Experience on the Long-Term Employment Relationship” – was co-authored by Profs. Friedman and Moye along with Merideth Ferguson of the Hankamer School of Business at Baylor University. It appeared in the August 2008 edition of Negotiation and Conflict Management Research.
Vanderbilt Owen Graduate School of Management is ranked as a top institution by BusinessWeek, the Wall Street Journal, U.S. News & World Report, Financial Times and Forbes. For more information about Owen, visit www.owen.vanderbilt.edu.
