According to Equity theory, fairness and equity are vital elements in the motivation of personnel. It argues that personnel attempt to compare their input/output ratio with that of other personnel. If they discover unfairness, personnel may distort their input, output or both so as to achieve a balanced ratio (Skiba, & Rosenberg, 2011).
Employees compare themselves with others according to their qualification, position, responsibilities and salaries (Stecher, & Rosse, 2007). There are several manners in which equity theory is applied. First, an employee may compare with himself at another situation within the same company. In this way, the employee may feel that he is not treated as fairly as he was treated at a different time while working in the same company. Secondly, an employee may compare with another employee in the same company. He therefore feels that other people do less for the company but earn more. Thirdly, he may compare with himself in another company. In this regard, he may argue that he has earned more in another company while putting less contribution. Finally, he may compare himself with employees from other companies. A salesperson may argue, for example, that salespeople from company X earn bigger percentages than themselves.
Once an employee feels that he is not being suitably compensated, he may opt to look for better options. Worse still, he may withdraw part of his efforts so as to feel like he now earns his rightful amount of income. This results in lower production and possible losses. It implies that an employee’s productivity may only be improved by using a more fair system (Stecher, & Rosse, 2007).
Managers who understand the impact of this aspect of business should seek to make employees feel more appreciated. Proper communication within a company then enhances productivity within the company and understanding. An employee who feels under-compensated could be made to understand where differences occur so that they too may seek to achieve higher incomes by being more productive for the company. Alternatively, if an employee has a justified claim, his salary may be raised.
Expectancy theory argues that the motivation of employees is highly dependent on valence, expectancy and instrumentality. Valence refers to an incentive that results from a specific action. Expectancy is the possibility of achieving a certain outcome and instrumentality refers to the confidence that a certain activity will prompt a reward from the company.
According to this theory, employees decide how much effort to put to a certain task depending on the three aspects (valence, expectancy, and instrumentality). Should the worker decide that the effort will not lead to a particular appealing outcome, then he only puts minimal effort to the task or none at all (Ghoddousi, Bahrami, Chileshe, & Hosseini, 2014).
This theory implies that employees are not only motivated by material or tangible outcomes of their jobs. Employees who expect to learn something or become more experienced from performing a certain task then puts more effort to his task (De Oliveira, Madruga, De Sá, & Regis, 2013). Also, an employee who performs a certain task exemplarily may feel deserving of recognition. If granted, it could prompt future activity. Finally, an employee may perform a task better if he feels that doing so will lead to improved rewards from his company.
Managers who understand this theory should therefore create systems that are more rewarding depending on contribution. This way, employees will feel better appreciated and therefore more motivated. How much reward a task initiates is also vital in motivation. The higher the possible reward, the higher the possibility that this activity will be done.
In conclusion, the
expectancy and equity theories are vital in almost any field. They explain the
importance of reward and equity respectively to production. If not well
exploited, the results could be very detrimental to the way a company runs. It
is the role of managers to understand how employees behave in different
scenarios and exploit their full capacity. Consultation with employees could be
a major factor towards more productivity.
Ghoddousi, P., Bahrami, N., Chileshe, N., & Hosseini, M. (2014). Mapping site-based construction workers’ motivation: Expectancy theory approach. Australasian Journal Of Construction Economics And Building, The, 14(1), 60.
De Oliveira, L., Paiva Madruga, E., De Sá, M., & Regis, H. (2013). Motivation of Banco do Brasil Employees to Participate in Programs of Corporate Volunteering: A Review Based on the Theory of Expectancy. International Management Review, 9(2), 45-49.
Skiba, M., & Rosenberg, S. (2011). The Disutility of Equity Theory in Contemporary Management Practice. Journal Of Business & Economic Studies, 17(2), 1-19. Stecher, M. D., & Rosse, J. G. (2007). Understanding Reactions to Workplace Injustice Through Process Theories Of Motivation: A Teaching Module And Simulation. Journal Of Management Education, 31(6), 777-796.
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