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The purpose of this study is to investigate the factors attracting job seekers to organization web online job application.This chapter reviews the relevant literatures pertaining to compensation, p-o-fit, p-o-job, reputation and image, and web site usability. Previous empirical findings relating to each construct will be explored. Next, theoretical underpinnings that form the basis of the current study will be put forward. In the end of chapter 3 in this study, there will be provided theoretical framework and hypotheses.
2.1 Compensation and Benefits
“Money is not everything, but it is the first thing.” Without strong foundation of compensation, it is meaningless for an organisation to put efforts on retain and attract their valued employees. Based on Payne & Brinkman (n.d.) words; a well-built compensation foundation and an emphasis on developing total leaders and mutual commitment is a starting strategy for attraction and retention of high performers. Based on the article, the key elements for the foundation of compensation are divided into four, which are:
A salary range and a benefits package that is broadly competitive for the position.
Actual salaries that reflect a person’s capabilities to do the job and personal development and growth.
Bonus and short-term incentive that reflect individual and corporate performance.
Long-term incentives (paid out over time) that rewards consistent and repeated high performance.
The organization need to focus on what really need take attention once a compensation foundation has been set up.
Nowadays, organizations in all industries are facing increasing pressures to become competitive in the market. These organizations, however, respond by increasing effectiveness and efficiency to improve the quality of outcomes. To increase productivity, organizations should be focus on their human capital which is significantly affecting the perception of customers towards them. Hence, the employees’ compensation system represents a major factor to increase the efforts and quality of employees in an organization toward their tasks. Employee compensation plays such a key role because it is at the heart of the employment relationship, being of critical importance to both employees and employers (Gerhart, Minkoff & Olsen, 1995). With a greater compensation employees can get, they will be highly motivated to produce better outputs under their satisfaction. According to Rind (n.d.), money which use to reward worker is named as salary and it is a hygiene factor.
Money becomes a force for people to survive. According to Barber and Bretz, (2000); Chiu et al, (2001); Lazear, (1998); Milkovich and Newman, (1999); Rynes and Gerhart, (2000); Tang et al., (1998, 2000a,b), many different forms of compensation such as money, and benefits have been used to attract, retain, motivate employees and achieve organizational goals in USA and around the world. (cited by Randy K. Chiu and Vivienne Wai-Mei Luk; Thomas Li-Ping Tang,(2002). Based on Maslow’s Hierarchy, money can be category in the safety category and physiological category of the hierarchy because it is a biological need as human need money for basic need such as food, water and shelter. So, it will motivate applicants towards job application. Money itself only will not satisfy an employee unless it matched with the combination of financial and non-financial returns as compensation package. By this type of good compensation package only will attract applicants and retain employees which existed (Oak & Schaeffer, 2003). Nevertheless, for business mind, people firstly think money is the important key issue. For most companies, especially service provider companies where customers are interacting directly with the company employees, human capital is the most valuable assets for companies and often the talented applicant are rare, and likely to be attracted by the competition with attractive monetary offers. Besides, it takes cares of the welfare of the employee’s family in the event of death (Andrew Carnegie, 2006).
Compensation and benefits is the most powerful variable which can attract job seeker to an organization. Compensation is defined as one of the major components in a total reward strategy; include base, annual and long-term incentives (Mosqueda, 2008). Yet, many companies are using this compensation and benefit to plan and draw the current strategy because the design of a successful compensation plan which is precise, fair, and simple can attract people to pay attention and look out of it. Besides, for the recent job market, qualified applicants know to negotiating power all around. Especially in finding talented and potentially capable workers, most companies might offer various compensation and benefits packages to attract these employees. Hence, the compensation packages need to be flexible and always up-to-date with your competitors offer.
Most organizations use one or more market pay surveys to help to determine what other organizations pay specific jobs in making their own pay level decision (Gerhart et al., 1995). Many organizations are comparing themselves against their peers either through custom surveys, proxy data from publicly traded companies or via published survey sources (Mosqueda, 2008). For this statement, it indicates that companies have to pay more attention and spend lots of time in determining employees’ compensation in order to make sure the employees choose their companies instead of other companies. So, compensation package such as high salary and extra incentives plays an important factor to attract applicants to decide whether want to apply to join the company or not. According to Bergmann and Scarpello, compensation systems have conventionally designed to attract and retain employees and to motivate them to boost their effort to achieve the organizational goals. In today’s business environment, most leading companies in the long term are the companies which providing flexible and challenging working environment for their employees, alongside with employee recognition and rewards. (Oak & Schoeffler, 2003). Even in the perception of employees themselves which possessed certain ability and recognition such as having degree or master certification, they would normally expect a better pay or at least some compensation and benefits from the company.
Most common but important form of pay is definitely cash money; while compensation and benefits an include health care, insurance, welfare, retirement and paid vacation. All these are also basic needs for employees and they will achieve high motivation in job if they personally believe that they are receiving a fair wage and equity treatment by employers. Thus, to create attraction towards applicants, few factors are playing important roles in forming attraction themes; the factors need focus on compensation, rewards, and benefit. Benefits are crucial in this aspect. The benefit can be competitive wages, social activities, leisure time for family and the applicant herself/himself. Consider all types of options, including car allowances, life insurance, relocation payments, flexible start dates, signing bonuses, use of company-owned vacation property, health-club membership, pension plan, health plan, dental plan, , easy switch from part-time to full-time, flexible scheduling arrangements, disability insurance, and other compensation that will make your package competitive and attractive. Offering nonmonetary incentives like these will attract talented applicant. Hence, set up a complete compensation and benefits plan if an organization intended to attract their valuable applicants. Employers who offer flexible scheduling in flextime or compressed workweeks, in geography (telecommuting or satellite workplaces), in time off (floating holidays or vacation carryover), and in career paths (job sharing or part-time work) have an advantage in attracting top candidates. Due to the costs of healthcare increase frequently, employers tend to use unique ways which is remain the stagnant compensation packages to differentiate their organization with others. (Mosqueda, 2008). By the unique way organization can gain competitive advantage among all the organization and can attract applicants look for the job application.
In addition, health care has been emphasis by employers as a most challenging benefit because the costs of the health care are huge and increase frequently. Furthermore, WorkatWork (2007) claimed that healthcare insurance has become the most important part of benefits package for U.S workers. Moreover, the statement above are parallel with Mok & Siddique (2009) words, health insurance is important upon employee’s total compensation, and it is crucial for those who would be ineligible to purchase it personally (e.g. due to pre-existing conditions). From this case, the employee will need to pay a small portion of the total premium cost while the rest of the sum will be paid by the employer and this benefit normally offered by an employer. (Mok & Siddique, 2009). Besides, WorldatWork (2007) also claimed that paid vacation and medical plans has ranked topped in the program list which is having high impact on attraction. Hence, from this aspect, organization can attract applicants move towards the most worthy and beneficial job application which provided. It is because nowadays people are tending to be more alerted with the health care; people everyday surrounded with pollution and consumed foods which contained chemical ingredients so it is very important for them to have the most secure and worthy compensation and benefits package. According to WorldatWork (2007), in the same survey, 78 percent of full-and part-time employees said the benefits offered by prospective employers are very important in their decision to accept a job offer. More than 90 percent of participants said that paid vacation has a moderate to high impact on employee satisfaction as well as cause employee to be attracted and retained with the organizations. A full 100 percent of participating organizations have a paid vacation program in place.
Besides, pension schemes also been claimed by Taylor, (2000) as an important aspect to attract applicants to an organization and this pension schemes also helps in reducing employee turnover in an organization
So it is important for an organization to have attractive factors to attract job seeker move towards the job application in the selected organization. Due to the smartness of job seeker, they know to distinguish the benefit which offered by the organization hence the organization offer better terms and conditions will attract more job seekers.
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