The effects of mandatory employment arbitration systems on applicants' attraction to organizations

Abstract

This study draws on organizational justice theory to investigate the effects of mandatory employment arbitration on organizational attraction. Specific attention is given to the characteristics of employment arbitration procedures that moderate the adverse effects these programs have on applicants' intentions to continue with the recruitment process. A total of 389 professional and executive MBA students read simulated employment brochures. Making employment arbitration mandatory was found to have a significant negative main effect on applicant attraction. This negative effect was mitigated when procedures afforded employees more due process considerations and when employees were given a just-cause protection in return for giving up their right to sue. Finally, this negative effect was greater among minorities than nonminorities. © 2005 Wiley Periodicals, Inc.