The Role of Individual Bargaining Behavior in the Pay Setting Process: A Pilot Study

A model of initial salary detemination for professional and man agerial employees is developed. That part of the model which concentrates on the role of employee salary negotiation behaviors and attitudes was investigated using a sample of 117 individuals. Significant variance in salary bargaining attitudes and behaviors was found; attitudinal and demographic differences be tween negotiators and non-negotiators were determined. Additionally, negotiat ing behavior was found to be positively related to salary, but only slightly re lated to salary growth. The issue of salary determination has long been a topic of intense study and debate among economists, sociologists, and managers. Not only has it been studied from the perspectives of equity, motivation and market efficiency, but researchers have also investigated the pay levels of groups of workers based on their occupation, demographics and job performance. One area of compensation practice that has received less attention than others is the process by which an individual's starting salary is determined. This issue is particularly relevant for managerial and professional employees. For these employees, the hiring manager often has a certain amount of discretion in judging what the appropriate starting salary for an particular applicant should be. It is the purpose of the current research to develop a model of initial salary determination and to test that portion of the model which deals with employee attitudes and behaviors. Address all correspondence to Craig J. Russell, Institute of Management and Labor Relations, Box 5062, Rutgers University, New Brunswick, NJ 08903-5062. 113 ? 1990 Human Sciences Press, Inc. 114 JOURNAL OF BUSINESS AND PSYCHOLOGY A MODEL OF STARTING SALARY DETERMINATION In many firms, the starting salary for a given position is fixed by management policy or union contract. This is especially true for clerical, technical or blue collar workers. For these positions, a model of individ ual behavior is not needed to understand how starting salaries are de termined. But for employees not covered by a contract or strict policy, the manager who has the responsibility for hiring these individuals pos sesses a certain amount of discretion in determining the starting salary awarded. This decision is influenced by a numer of factors, represented in Figure 1.