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Motivation management - Equity theory
Citation preview
Equity theory
Lecturer: Wendelin Kuepers
Group members:
1. Mai Thu Ha (12032382)
2. Zhengyan ZUO (05017882)
3. Haoxiang Wu (12083815)
4. Wu Di (11046037)
152.700 Organisation and Management - Assignment 1b
HIGHLIGHTS
Introduction & Assumptions1
Output/Input ratio - Comparison others2
Consequences of inequity3
Development of Equity theory4
5 Theory’s strengths and criticism
152.700 Organisation and Management - Assignment 1b
152.700 Assigment 1b
Introduction to Equity theory
First developed in 1963 by John Stacey Adams
Adams (1963) argues that when people measure the fairness of their work outcomes relative to others, any perceived inequity is a motivating state of mind.
Assumptions of Equity Theory
• Employees expect a fair and equitable return for their contribution to their jobs.
• Social comparison.• Employees who perceive themselves as
being in an inequitable scenario will attempt to reduce the inequity.
Model of Equity Theory
S Input versus r Input
S Outcome r Outcome
I = Inputs - employee’s contribution to employer
O=Outcomes - the individual gets in return for his contribution.
R = Referent - comparison person
S = Subject the employee who is judging fairness of the exchange 152.700 Organisation and Management - Assignment 1b
Key Factors in Equity Assessment
152.700 Organisation and Management - Assignment 1b
Equity Theory’s “Relevant Others”
• Can be four different situations:Self-Inside
• The person’s experience in a different job in the same organization
Self-Outside• The person’s experience in a different job in a
different organizationOther-Inside
• Another individual or group within the organizationOther-Outside
• Another individual or group outside of the organization
152.700 Organisation and Management - Assignment 1b
152.700 Organisation and Management - Assignment 1b
Accoring to the equity theory employees compare their outcome/input ratio with the outcome /input ratio of others to determine whether they are being treated fairly or fairly by the organization.These comparisions are divied into 3 categories:
a.Equity:
A person feels equitably treated when his outcome/input ratio is equal to others persons outcome/input ratio with the person compares himself.
S outcome = R outcome
S input R input
Equitably paid workers are said to feel satisfied.
152.700 Organisation and Management - Assignment 1b
b.under rewarded inequity /negative inequity: A person feels over rewarded when his outcome/input ratio is less than
whom the person compare himself. S outcome < R outcome S input R input
Equity theory states that an overpaid worker feels angry. c .over rewarded inequity /positive inequity: A person feels over rewarded when his outcome/input ratio is greater than
whom the person compare himself. S outcome > R outcome S input R input
Equity theory states that an overpaid worker feels guilty.
152.700 Organisation and Management - Assignment 1b
Consequences of inequityBased on equity theory, when employees perceive an inequity, they can be predicted to make one of six choices.•They change their inputs.•They change their outcomes •They distort perceptions of self•They distort perceptions of others•They choose a different referent
•They leave the field (Robbins, Millett & Waters-marsh , 2004, p.
183).
152.700 Organisation and Management - Assignment 1b
The Development of Research on Equity Theory
1. First developed in 1963 by John Stacey Adams
Adams (1963) argues that when people measure the fairness of their work outcomes relative to others any perceived inequity is a motivating state of mind.
152.700 Organisation and Management - Assignment 1b
The Development of Equity Theory
2. Effects of Inequity on Work Output and Quality by Underpayment
Lawler and O’ Gara (1967) indicated that the underpaid group experienced feelings of inequity using the higher paid group members as their comparative others.
Additionally, the underpaid worker would produce more work output via conducting more interviews was indeed correct.
152.700 Organisation and Management - Assignment 1b
The Development of Equity Theory
3. Equity and workplace status
Greenbery (1988) stated that employees reassigned to offices of higher status would be more productive than those reassigned to offices of equal status employees.
The Development of Equity Theory
4. Equity Sensitive Construct• Huseman, Hatfield and Miles(1987) defined the equity
sensitive construct as the investigation of a person's perception of what is and what is not equity, and then uses that information to make predictions about reactions to inequity.
• Individuals react in consistent but individually different ways to both perceived equity and inequity because they have different preferences for equity on a continuum with classes of individual: Benevolent, Equity Sensitive, and Entitled (Huseman et al., 1987).
152.700 Organisation and Management - Assignment 1b
The Development of Equity Theory
5. Work Motivation on an Assembly Line The study was completed on the basis that
equity theory indicates that workers react to and modify their work behaviour based upon the speed or rate of the work of the people around them (Schultz, Schoenherr & Nembhard, 2006).
152.700 Organisation and Management - Assignment 1b
The Development of Equity Theory
6. Dishonesty in the Name of Equity
Individuals are more likely to engage in dishonest behaviour when they have inequity of wealth (Gino & Pierce, 2009).
Strengths
Strengths
B
E
C
D
A
Accurately predicts behavior on under-reward
Inter-personal processes (social comparison) + reference group
Important insights into employee motivation
Ability to fit with other theories (particularly the expectancy theory)
Accounts for internal assessment, comparison procedures &quality changes
152.700 Organisation and Management - Assignment 1b
Restricted & incomplete (focus on payment only)
Little practical value ->better as an explanation after the fact than as a predictor of behavior
Focuses on short-time comparison
Ignores reactions to experienced inequities
Equity’s criticism
Criticisms
Gibson, Ivancevich, Donnelly, & Konopaske (2009, p. 151-153)Huseman, Hatfield & Miles, 1987 152.700 Organisation and Management -
Assignment 1b
Applications of Equity theory
Explanation of employee behaviour
Equity
Distributive justice •Compensation•Promotion=>fair distribution of rewards
Gibson, Ivancevich, Donnelly, & Konopaske (2009, p. 151-153)152.700 Organisation and Management - Assignment 1b
152.700 Organisation and Management - Assignment 1b
Contents
Theory’s strengths and criticism
Development of Equity theory
Consequences of inequity
Output/Input ratio - Comparison others
Introduction & Assumptions
152.700 Organisation and Management - Assignment 1b
References
• Adams, J.S. (1963). Towards An Understanding of Inequality. Journal of Abnormal and Normal Social Psychology. (67), 422-436.
• Gibson, J.L., Ivancevich, J.M., Donnelly, J.H., & Konopaske, R. ( 2009). Organizations: Behavior, structure, process (13th ed.). New York, NY: McGraw-Hill., p150-153
• Gino, F., & Pierce, L. (2009). Dishonesty in the Name of Equity. Psychological Science, 20 (9): 1153-1160.
• Greenberg, J. (1988). Equity and workplace status: a field experiment. Journal of Applied Psychology, 4, 606-613.
• Huseman, R., Hatfield, J., & Miles, E. (1987). A New Perspective on Equity Theory: The Equity Sensitivity Construct. Academy of Management Review. 12(2). 232-234.
152.700 Organisation and Management - Assignment 1b
References (cont)
• Lawler, E., & O‘Gara, P. (1967). Effects of inequity produced by underpayment on work outputs, work quality, and attitudes toward the work. Journal of Applied Psychology, 51(5), 403-410.
• Robbins, S.P., Millett, B., & Waters-marsh, T. (2004). Organisational Behaviour. Australia: Person Education Australia, p. 183.
• Schultz, K., Schoenherr, T., & Nembhard, D. (2006). Equity theory effects on worker motivation and speed on an assembly line. Retrieved from: http://www.hbs.edu/units/tom/pdf/kschultz.pdf
• Stecher, M.D. & Rosse, J. (2007). Understanding reactions to workplace injustice through process theories of motivation. Journal of Management Education, (31), 777-796.
• Weick, K.E. (1996). The concept of equity in the perception of pay. Administrative Science Quarterly. (11), 414-439.
152.700 Organisation and Management - Assignment 1b
Group reflection
• Forming• Agreeing on topic• Assigning responsibilities• Time frame• Conflicts
152.700 Organisation and Management - Assignment 1b
Forming
• Make friends during paper• For assignment• Assign leader• Group is not so diverse in cultures
152.700 Organisation and Management - Assignment 1b
Topic agreement
• Group members study all theories in motivations
• Each member proposes 1 topic• Group discusses and agrees on topic
152.700 Organisation and Management - Assignment 1b
Assigning responsibilities
• Individual task is assigned based on members’ strength (who can do better in one part)
• Members read and make recommendations for others in group
152.700 Organisation and Management - Assignment 1b
Time frame
• 1st week: forming, individually study, agree on topic
• 2nd: individual to prepare their part, combine and discuss, proof-reading, finalize
152.700 Organisation and Management - Assignment 1b
Conflicts
• Task: unequal, discussion to fix with outlines and orders of the presentation => members agree & be happy with assigned task
• Time: different time -> difficult to schedule for group meeting => discuss & propose several options then agree on one that suits all
• However, thanks to small group size of 4, those conflicts are easier to be resolved.
152.700 Organisation and Management - Assignment 1b
THANK YOU FOR YOUR ATTENTION!
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