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Information Use in Counter-Offer Decisions: An Examination of Factors that Influence Management Counter-Offer Decisions

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Author Info

  • William MacKenzie

    ()

  • Brian Klaas

    ()

  • John McClendon

    ()

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    Abstract

    We examine factors which influence manager assessments of employee value in response to outside employment offers. Data were collected from 312 managers on counter-offer decisions. We found the size of manager counter-offers increase as a result of the attractiveness of the outside offer, the presence of a neutral, third-party recommendation and when the recommending direct supervisor has an incentive to minimize compensation costs. Additionally, we found a significant interaction between offer attractiveness and third-party recommendation, where counter-offers made to employees with highly attractive offers increased more dramatically when a neutral manager recommended the employee in addition to the immediate supervisor. Copyright Springer Science+Business Media, LLC 2012

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    File URL: http://hdl.handle.net/10.1007/s12122-012-9140-2
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Labor Research.

    Volume (Year): 33 (2012)
    Issue (Month): 3 (September)
    Pages: 370-387

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    Handle: RePEc:spr:jlabre:v:33:y:2012:i:3:p:370-387

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    Web page: http://www.springer.com/economics/journal/12122

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    Related research

    Keywords: Counter-offers; Compensation;

    References

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    1. Henry S. Farber & Robert Gibbons, 1997. "Learning and Wage Dynamics," NBER Working Papers 3764, National Bureau of Economic Research, Inc.
    2. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May.
    3. John M. Barron & Mark C. Berger & Dan A. Black, 2006. "Selective Counteroffers," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 385-410, July.
    4. Carrell, Scott E., 2007. "The national internal labor market encounters the local labor market: Effects on employee retention," Labour Economics, Elsevier, vol. 14(5), pages 774-787, October.
    5. Limor Golan, 2005. "Counteroffers and Efficiency in Labor Markets with Asymmetric Information," Journal of Labor Economics, University of Chicago Press, vol. 23(2), pages 373-393, April.
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