Effects of Pay Transparency on Application Intentions Through Justice Perceptions and Organizational Attractiveness

Abstract

We investigated how applicants infer treatment of employees based on an organization's pay transparency policy (PTP). We tested a serial mediation model in which PT influences applicants' intentions to apply to a job through increased fairness perceptions and organizational attractiveness. Participants were randomly assigned to read a company's profile that implements PT or pay secrecy. Participants indicated: (a) the extent the company treats its employees fairly, (b) their attraction to the company, and (c) their intent to apply. Results suggest that a PTP signal company values of equity and justice to applicants. We conclude with strategies for attracting applicants.