Download The Impact of Firm Reputation on Applicant Inferences and more Exams Psychology in PDF only on Docsity!
ABSTRACT
DECONSTRUCTING SIGNALING THEORY: THE ROLE OF ORGANIZATIONAL,
REFERENT OTHER, AND SELF-REFERENTIAL INFERENCES IN RECRUITMENT
By Katie E. Wright Understanding recruitment is crucial for organizations to generate a qualified applicant pool from which they can select employees. Past research on recruitment has looked at applicant willingness to apply for a position and attraction to the companyitself. More recently this research has explored the effects of signaling theory to explain these applicant reactions. To date, this research has focused primarily on the signals organizational policies might send to applicants about other aspects of the organization (e.g, profitability, diversity). The results of this research have been mixed, making it unclear as to whether policies act as signals for applicants. However, less emphasis hasbeen placed on what organizational policies might signal to the individual about how they themselves will be treated, or affected if involved with the organization (i.e., self referential inferences). It can be argued that organizational policies will be more important for self-referential inferences than for organizational inferences. This study examined three types of signals that may be sent to applicants’ and the effects of each onapplicant’s attraction to a company. Specifically I was interested in learning what kinds of signals firm reputation sends to applicants about a) other aspects of the organization; b) how other employees will be treated; and c) how the applicant will be treated within the company, or affected by the company. To accomplish this research I conducted an experiment using undergraduate psychology students and business students of theuniversity.
DECONSTRUCTING SIGNALING THEORY: THE ROLE OF ORGANIZATIONAL, REFERENT OTHER, AND SELF-REFERENTIAL INFERENCES IN RECRUITMENT by Katie E. Wright A Thesis Submitted In Partial Fulfillment of the Requirements For the Degree of Master of Science - Psychology Industrial/Organizational at The University Oshkosh WI 54901-8621 of Wisconsin Oshkosh May 2010
COMMITTEE APPROVAL
.tL.k,~- Advisor
') Itt/I D Date Approved
Date Approved
~.i~?Jt~.g!---_· __ Member FORMAT APPROVAL
$""""1 '"3/1^0 Date Approved .. ~·~Mhy
,C;~-l/fr (-=:~ Member
Date Approved
__ ~--,--//~1 .,..../..;;../tf Date Approved
iii
LIST OF TABLES
Page Table 1. Company Profile Manipulation of Firm Reputation at All Levels …………. 17 Table 2. Signaling Items for Organizational, Self - Referential and Referent Other … 19 Table 3. Descriptive Statistics and Intercorrelations Among Variables …………….. 25 Table 4. Regression Table of Attraction for High and Low Firm Reputation ………. 26 Table 5. Summary of Explo Estimation ……………………………………………………………………ratory Factor Analysis Results for Signaling Likelihood 28 Table 6. Regression Table of Organizational Signaling for High and Low Firm Reputation …………………………………………………………………… 30 Table 7. Regression Table of Self and Low Firm Reputation - R……………………………………………………eferential / Referent Other Signaling for High 31 Table 8. Regression Table of Self Organizational Inferences for High and Low Firm Reputation - Referential/ Referent Other Withholding ……………. 32 Table 9. Regr Organizational Inferences for High Firm Reputationession Table of Interaction of Self Referential/ Referent ………………………. Other and 33
INTRODUCTION
Obtaining the best applicant pool possible using effective recruitment practices is critical for most organizations. To advance the understanding of recruitment efforts and applicant attraction, numerous studies have attempted to identify information that would enhance recruiting efforts. Past literature has focused on identifying the influence of various organizational policies and practices on applicant recruitment. For example companies have modified their pay, benefits and working conditions to see what attracts or deters applicants from applying. To understand the processes by which policies and practices influence applicant attraction, researchers have focused on the role of signaling in recruitment. Signaling theory posits that applicants form perceptions about employers based on incomplete information they encounter during the job search process, such as recruitment ads, and recruiters (Rynes & Miller, 1983). While it is seemingly logical to conclude that applicants would make inferences from known information during the job search, the findings with regard to signaling have been somewhat inconsistent. There are at least two possible reasons for this inconsistency: a) by presenting applicants with only positive stimuli or with no stimulus at all, and giving no representation of negative stimulus, past research has not measured the full range of signaling; b) by focusing almost entirely on the signals that are sent about other organizational characteristics or about how other employees will be treated within the organization, past research has missed the most important types of signals; those that indicate how applicants themselves will be affected by the organization. This latter point is particularly important given that
Gowan & Lautenschlager, 1993; Highhouse et al., 1999), so we can be relatively assured that this information is salient to job seekers.
Previous Literature Recruitment Recruitment in organizations serves three primary functions: generating an applicant pool, ensuring demographic representation, and attracting more qualified applicants (Thomas & Wise, 1999). Recruitment is defined by Chapman et al. (2005) as a process that encompasses all organizational practices and decisions that affect either the number, or types, of individuals that are willing to apply for, or to accept, a given vacancy. According to a recent study of 33,000 employers from 23 countries, 40% stated they were having difficulties finding desired talent within the recruiting and hiring process (Ployhart, 2006). Spence (1974) also stated that the amount of time and effort it takes to learn an individual’s productive capabilities means that hiring is a time- consuming and invested decision. Thus it is important to improve our understanding of recruitment. Research in recruitment has focused on who and where to target, the best sources to use, how recruiters can affect applicants, and more recently applicant intentions to apply. For example Barber and Roehling (1993) investigated the process of deciding whether or not to apply for a job. They used verbal reports from participants as they evaluated job postings to decide if they wanted to interview. Findings from this research showed the participants responded more favorably to the amount of information supplied
in the job posting, and that applicants made inferences about unobserved characteristics and probability of hire from the job postings. Rynes, Bretz and Gerhart (1991) stated similar findings, adding in that job seekers decisions were consistent with signaling theory, in that subjects interpreted a variety of recruitment experiences as symbolic to organizational characteristics. Organizational Fit and Signaling Theory When finding organizations to apply to, applicants will be looking for those that best fit their needs. This concept of organizational fit is commonly tied to signaling theory. Behling (1969) suggests that applicants seek a fit with an organization or with the job being filled; adding that this can also be stated as person-organization fit [P-O] or person-job fit [P-J] fit. Cable and Judge (1994) have defined it as the capability for applicants to be attracted to, selected, and retained in an organization where the work environment best matches their own personal characteristics. This concept of organizational fit has been combined with signaling theory to help explain its effect. Signaling theory argues that applicants form perceptions about employers based on incomplete information they encounter during the job search process, such as recruitment ads, and recruiters (Rynes & Miller, 1983). Turban and Cable (2003) point out that because applicants do not have a significant amount of information about an organization during the beginning of their job search; it is hard for them to pinpoint which jobs to apply for and which jobs to stay away from. Thus, they are left with only the information available to them which can include information such as the firm’s reputation. In the area of recruitment, signaling theory is able to concentrate on the
places that they work for (Lievens, Van Hoye, & Anseel, 2007). Ashforth (1989) suggested that people try to classify themselves and others into certain social categories (such as the organization that they work for), to order their social environment as well as identify where they fit into their social environment. Social identity theory states that organizational members develop a sense of who they are from their organizational membership (Lievens, Van Hoye, & Anseel, 2007), and this concept has been used in recruitment to explain an applicant’s organizational fit and identification with an organization. While Turban and Cable (2003) were able to use both theories, use of these theories in future research will depend on whether one is aiming to look at how the applicant makes perceptions about the organization during the application process (signaling theory), or if they intend to find the applicant’s organizational fit once in the environment (Social identity theory). It is because of this difference that this study will look at signaling theory, and not Social identity theory. Applicant Attraction Applicant attraction is a construct that is intended to measure the degree to which an applicant finds a particular job opportunity desirable. A company’s prospective applicants are dependent upon their ability to attract individuals to the job opportunities that they offer. When attraction is higher, an organization is more likely to receive a bigger applicant pool and increase the amount of applicants to select from. Attraction encompasses such dimensions as the general attractiveness of, and interest in, an organization and the potential employer, applicant preferences regarding employers, and probability of application (Cober et al., 2004).
Applicant Attraction and Firm Reputation Barber (1998) stated that when deciding where to apply applicants are generally not “blank slates,” but that they already have some impression about the organization before they are exposed to recruitment efforts. In most cases these impressions are known as organizational image (firm reputation), and have been shown to affect the organization’s ability to attract applicants (Frombrun & Shanley, 1990). With regard to applicant attraction, Chapman et al. (2005) conducted a meta- analysis in the area of applicant attraction, to clarify processes that might be involved in job choice. Chapman et al. (2005) looked at four recruitment outcomes variables. These variables included job pursuit (applicant’s intentions to pursue a job), acceptance intention (likelihood that an applicant would accept a job offer), job choice (likelihood that an applicant would accept a real job offer), and job-organization attraction (applicant’s overall evaluation of the attractiveness of the job/ or organization). Overall results showed that applicant attraction can be predicted by job – organization characteristics, recruiter behaviors, perceptions of the recruiting process, perceived fit, and hiring expectancies. While this research was able to recognize that applicants are attracted to job-organizational characteristics such as firm reputation, Chapman et al. (2005) did not look at theories which could predict attraction such as signaling theory. Firm Reputation Frombrun and Shanley (1990) identify Firm Reputation as a public’s affective evaluation of a firm’s name relative to other firms. This reputation can be very valuable because it can provide information to constituents about investors and potential
hypotheses to test their model of organizational reputation. Findings, consistent with Rynes (1991), showed that organizational attributes do have an effect on applicant attraction. However, they also found a negative relationship between organization reputation and applicant attraction. With further investigation, it was shown that in testing this hypothesis analyses were run using surveys that were answered by applicants after they had been interviewed by the company, and did not include surveys answered before they had entered the company. When results are used only after applicants have been introduced to a company, an error may also result. This possibility for error is due to recruiter impact which can happened when an applicant enters a company, and includes things such as negative behaviors by a recruiter, which could then affect applicants’ opinion of firm’s reputation. For example past research has found that recruiters who are perceived as unfriendly during the interview process may signal an unfriendly work environment (Goltz & Giannantonio, 1995). The present study attempted to further the findings of past research recruitment, as well as replicate what has been shown in the past. Many studies have been conducted to replicate these findings and have come to the same conclusion (Gatewood, Gowan, & Lautenschlager, 1993; Turban, Forret & Henderickson, 1998). Furthermore, research conducted by Lawler, Kuleck, Rhode, and Sorenson (1975) found that firm attractiveness ratings when obtained months before interviews were related to later job choices. Through this research they found that when students were presented with two or more job offers, 80% of them accepted the job with the higher firm rating. It is because of this that it was proposed:
Hypothesis 1: Positive information about firm reputation will result in higher levels of applicant attraction than negative information about firm reputation. Signaling Theory The interest of the current study was to look at the signaling effects that occur when applicants are presented with information about a firm’s reputation. Rynes, Bretz and Gerhart (1991) looked at how job pursuit intentions may be bound to pre-interview criteria rather than post interview criteria. To measure how job choices were made, participants were interviewed twice over a period of four months. Interviews were set up by presenting applicants with a variety of recruitment experiences that might typically be expected in a hiring process, such as time delays. Findings from this research revealed that timing or delays within the hiring process were seen to have the most impact on applicants’ job decisions. These timing delays created inferences that something was wrong with the organization. Consistent with signaling theory, Rynes, Bretz and Gerhart (1991) found that recruitment experiences have a stronger signaling value when little is known about the organization prior to the job search. Applicants also interpreted the variety of recruitment experiences as symbolic to other organizational characteristics. In the area of applicant attraction, signaling theory has been used as a way to explain why applicants may be drawn toward, or pushed away from, an organization. Within several recruitment studies, signaling has been seen as a way to predict applicant attraction, and help to understand applicant job pursuit intentions. When looking at signaling theory, three distinct constructs appear with two constructs receiving attention in the research. The first construct to receive attention examines signals about what the
organization, accounted for more variance over job and organizational attributes. This shows support that information about reputation or prestige has a greater impact on applicant attraction than information about pay, bonuses, or benefits. The second construct that is commonly addressed in research is how the company will treat others, or its co-workers, or referent other signals. Rynes and Miller (1983) used this construct from signaling theory to explain if recruiter behaviors such as how informative recruiters were, would lead to perceptions of how the company treats others. To measure this affect, Rynes and Miller (1983) presented applicants with one of two videotaped mock interviews. Participants where either shown situations in which the recruiter knew a lot of information about the organization, or which stated information about the attractiveness of the job. However, while their first study found this to be true, after repeating the study those results could not be replicated. Again, like the study conducted by Behrend et al. (2009), Rynes and Miller (1983) do provide applicants with negative information about the organization, and they measured it in such as way that results were inconsistent. While this is just a glance, the majority of studies within signaling theory center around these two constructs. A more salient question for applicants may be “how I will be affected if I were to work here”. This construct, or self-referential inferences, suggests that when applicants are considering jobs, they are more interested in signals relating to how they will personally be treated within an organization, more so than signals about what the origination is like as a whole, or how they treat potential co-workers. In other words, when applying for jobs applicants are more concerned about what they will get
out of the situation, they are with broad organizational characteristics. To my knowledge, the signals directed to the individual, or self-referential signals have only been reported once; Jones, Willness and Macneil (2009) looked at signaling at the individual level by manipulating online recruitment web pages, by stating their participation in corporate social responsibility (CSR), and seeing how the applicant felt that they would fit in that given organization. Jones, Willness and Macneil (2009) believed that companies stating their engagement in CSR would signal more positively to applicants about how they would be affected if they were to work there. To conduct this research at this new level, applicants were asked to review designated web pages, and then respond to a set of items including questions regarding perceived organizational support. Results provided support stating that when the organization announced engagement in CSR, applicants viewed this as a positive signal about how they would be treated if they worked in the organization. While there has only been one reported case of the construct of self-referential signaling, it was shown to be significant and encouraged future research of this inference type. Arguments used in justifying the use of organizational signals state that the selection procedures that an organization uses can affect the organization’s overall ability to attract applicants. While reasons used in past research to justify the construct of how they treat employees’ state that applicants may take recruiter behaviors such as attentiveness or how informative they are about the organization as signals of the quality of interpersonal relationships, or the nature of supervision that they may encounter when working in the organization (Rynes & Miller, 1983).
born with an innate tendency to be more concerned with their self-interests than others. This idea goes back to Freud’s use of ego, or individualism, where an individual’s motive is based on itself rather than others (altruism) (Paulsen & Thilly, 1990). Sui et al. (2009) looked at this concept from the view of self-referential stimuli. Through this research participants were presented with both self-referential stimuli and other stimuli. Measurements were then taken to see to which stimuli participants were more attuned to. What they found was that, in early stages, participants are initially more concerned with establish self-referential cues, and that this is a more reflexive attention in early stages. This attention was also found to shift in later stages to friend or other-referential stimuli. It is from this literature that it was hypothesized that: Hypothesis 6: Firm reputation will have a stronger effect (positive or negative) on individual signals than on either organization or co-worker signals.
METHOD
Sample Participants were 251 undergraduate students at the University of Wisconsin Oshkosh. Of those, 9 surveys were dropped for large sections of incomplete data, leaving 242 in our sample. Undergraduate students were those enrolled in business or psychology courses. Those enrolled in psychology courses were recruited through the Psychology Participation Pool using Sona Systems, while business students were those in select business courses. Average age of participants was 22 years, with 60.7 % of them being female, and 39.3% being male. Of those 88.8% indicated an ethnicity of Caucasian/White (non-minority) and 9.9% indicated being a minority, the remaining 1.3% did not identify any ethnicity. Sixty-three percent of participants indicated having a major in the business, 7% of participants were education majors, 7% of participants were undeclared in major, and the remaining 25% were from various other majors. The average grade point average (GPA) was 3.05 out of 4.0.
Materials Participants were provided with two things. First they were assigned randomly to one of three company profiles. Profiles consisted of approximately one paragraph stating instructions, and depicting the companies’ profile. Next the students received a survey packet. Survey packets consisted of questions regarding applicant opinions based on information provided in the company profile, and demographic questions in which students were expected to circle the answer best representing their response, or consisting
