You May Be Guilting Yourself Short in Salary Negotiations

Job seekers in the era of ‘social impact framing’ are afraid to ask for higher pay

Based on the research of Insiya Hussain

For many companies today, recruiting employees includes luring them with job postings that tout the organization’s altruistic goals, such as to “make an impact” or fulfill a mission or purpose that benefits the greater good.

Appealing to job seekers’ altruism isn’t just for nonprofits anymore. Both for-profit and nonprofit organizations increasingly employ what has been termed “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 Texas McCombs Assistant Professor of Management Insiya Hussain 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.”

Hussain and co-authors Marko Pitesa and Michael Schaerer of Singapore Management University and Stefan Thau of INSEAD found that job candidates who were exposed to social impact framing refrained from negotiating for higher salaries because they felt uncomfortable with that “ask.”

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.

‘I Can’t Even Ask’

The research suggests job applicants might experience a fearful thought process around salary: “I can’t even ask. I feel like if I ask, it might be held against me or against the norms of the organization. It might be seen as greedy,” Hussain says, paraphrasing the job seekers.

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.

That mindset was true across the age spectrum and several industries, including education, financial services, food manufacturing, and health care — in both nonprofit and for-profit businesses.

Job seekers’ fears of tainting themselves in managers’ eyes are not unfounded.

Pitesa’s previous research has described a “motivation purity bias,” where managers assume that employees interested in a job’s material rewards care less about the work and are thus less worthy of hiring. Other research suggests that employee motivation is not so cut-and-dried and that extrinsic rewards and intrinsic motivation can coexist in high-quality employees.

“One of the things we theorize is that candidates are picking up on managers’ ‘motivation purity bias,’” Hussain says. “That bias could potentially weed out candidates who would be fine performers.”

Money Left on the Table

Of course, the job candidates also suffer — probably more than they realize in the moment, Hussain says.

“It’s unfortunate they feel like they’re in a bind where they can only showcase how intrinsically motivated they are. They’re too afraid to ask or negotiate salary. That’s leaving money on the table,” Hussain says, noting the importance across a worker’s lifetime. “Even a small difference in salary is cumulative, and hundreds of thousands can be lost.”

For example, an unwillingness to ask for a $5,000 increase in starting salary can result in a cumulative loss of more than $500,000 over a career, says Hussain. Her research focuses on understanding how employees can overcome the challenges of speaking up at work — including negotiating for personal rewards.

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.

Based on the study, Hussain offers advice:

“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.”

“Pay Suppression in Social Impact Contexts: How Framing Work Around the Greater Good Inhibits Job Candidate Compensation Demands” is forthcoming, online in advance in Organization Science.

Story by Sharon Jayson