Equity Theory

1
Equity Theory

• Assumption
• a persons behavior is influenced by comparisons
  between their current status and some comparison
  other
• Inputs
• what people think they contribute to an
  organization
• Outputs
• what people think organization gives them in
  return

2
Equity Theory (cont.)

• Ratio of Inputs/Outputs is calculated by worker
• Worker compares their ratio with the ratio of an
  appropriate other
• If ratios are equivalent, no motivation to modify
  behavior
• If ratios are not equivalent, the worker is
  motivated to bring ratios in-line

3
Inequity Outcomes

• Underpayment
• Workers will decrease effort
• Decreases in product quality and quantity
• Good empirical support
• Overpayment
• Workers should expend more effort (i.e., increase
  inputs), or produce higher quality
• No empirical support
• People not motivated to resolve overpayment
  inequity

4
Organizational Justice

• Distributive Justice
• The perceived fairness of the amount and
  allocation of rewards among individuals.
• Procedural Justice
• The perceived fairness of the process used to
  determine the distribution of rewards.

5
Job Enrichment

• The process of making a job more motivational
  and satisfying by adding variety, responsibility,
  and managerial decision making.
• Characteristics
• Direct feedback
• Client relationships
• New learning
• Control over scheduling
• Unique experience
• Control over resources
• Direct communication authority
• Personal accountability

6
Hackman OldhamsJob Characteristics Model

• Combines both task and individual characteristics
• Motivating Potential Score
• Skill Variety (SV)
• Task Identity (TI)
• Task Significance (TS)
• Autonomy (A)
• Feedback (F)
• MPS SV TI TS x A x F
• 3
• Growth Need Strength

7
Herzbergs Two-Factor Theory

• Certain things are necessary, but not sufficient,
  for job satisfaction
• Motivators
• ------------------------------------
• Hygiene factors

Satisfaction
Dissatisfaction
8
Herzbergs Two Factor Theory

• Motivator Factors
• Work to motivate and satisfy people
• Recognition, Growth Opportunities, Achievement
• Hygiene Factors
• Work to prevent dissatisfaction
• Pay, Working Conditions, Job Security

9
The Bottom Line

• Recognize Individual Differences
• Use Goals Feedback
• Allow Employees to Participate in Decisions that
  Affect Them
• Link Rewards to Performance
• Check the System(s) for Equity