Equity Theory

EQUITY THEORY
• This process theory focuses on workers' perceptions of the fairness of their work outcomes and inputs. Specifically they strive to maintain ratios of their own rewards to contributions which are equal to others' ratios .

EQUITY EQUATIONS
• Equity
– Outcomes (self)
Inputs (self)

=

Outcomes (other)
Inputs (other)

•Underpayment Inequity Outcomes (self) Inputs (self) • Overpayment Inequity Outcomes (self) Inputs (self)

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Outcomes (other) Inputs (other)

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Outcomes (other) Inputs (other)

BALANCING THE SCALES
• Workers can change their inputs • Workers can change their outcomes • Workers can try to change others outcomes and inputs • Workers can change their perceptions • Workers can change their reference person • Workers can change jobs

IMPLICATIONS OF EQUITY THEORY
• Avoid underpayment • Avoid overpayment • Be sensitive to inequity perceptions • Monitor regularly for creeping inequity • When sacrifices are needed distribute equally from top to bottom

PROCEDURAL JUSTICE
• A process theory about motivation that focuses on workers perceptions of the fairness of the procedures used to determine outcomes. It deals with how performance is evaluated and how pay scales are determined and how grievances are handled.

BUILDING PROCEDURAL JUSTICE
• Treat workers with respect • Give workers a voice in decisions concerning them • Explain decisions to workers

ETHICAL ISSUES AND PROCEDURES
• Conflict of interest • Nepotism • Equal employment opportunity • Intellectual property rights • Whistle blowing

EXPECTANCY THEORY
• A process theory that states motivation is determined by the outcomes people expect as a result of their actions on the job. Essentially it holds that people will be motivated when expect that they will be able to achieve what they want from their jobs

EXPECTANCY COMPONENTS
• Expectancy — the belief that efforts will influence performance. Ex. If I study hard, I'll be able to answer exam