Equity Theory

• An important factor in motivation is whether individuals perceive the reward structure as being fair. One way of addressing this issue is through the use of equity theory, which refers to an individual's subjective judgment about the fairness of the reward he or she gets, relative to the inputs (which include many factors, such as effort, experience, and education), in comparison with the rewards of others. J. Stacy Adams has recieved a great deal of credit for the formulation of the equity (inequity) theory. The essential aspect of the theory may be expressed as follows:
Outcomes by a person
---------------------------
Inputs by a person
=
Outcomes by another person
---------------------------
Inputs by another person
• There should be a balance of the outcomes/inputs relationship for one person in comparison with that for another person.
• If people feel that they are inequitably rewarded, they may be dissatisfied, they may reduce the quantity or quality of output, or they may even leave the organization. If people perceive the rewards as equitable, they probably will greater than what is considered equitable, they work harder. It is also possible that some may discount the rewards. These three situations are illustrated in Figure 14-4.
• One of the problems is that people may overestimates may be tolerated for some time by employees. But prolonged feelings of inequity may get result in strong reactions to an apparently minor occuremad. For example, an employee being reprimanded for being a few minutes late may get angry and decide because to quit the job, not so much because of the reprimand but because of long-standing feelings that the rewards for his or her contributions are inequitable in comparison with other's rewards. Likewise, a person may be very satisfied with a weekly salary of $500 untill he or she finds out that another person doing similar work gets $10 more.
● FIGURE 14-4 Equity Theory
[Balance or imbalance of rewards]|<-
[Inequitable reward]
[Equitable reward]
[More than equitable reward]
[Dissatisfaction
Reduced
Departure from
organization]
[Continuation
at same level
of output]
[Harder work
Reward
discounted]
● The managerial function of leading is defined as the process of influencing people so that they will contribute to organizational and group goals. As the discussion of this function contribution to managing. In its analysis of the pertinent knowledge in leading.
--------------------------------------------------------------------
http://jimrzs.blogspot.com
http://share.ovi.com/mobile/elibrary
--------------------------------------------------------------------
Fundamentals of Management : Leading / Motivation [BBA 2305]
--------------------------------------------------------------
Ovi Mail: Easy setup in minutes
http://mail.ovi.com