Equity theory
The Equity theory has its bases on the principle of balance. Everything in life needs to have a balance in order to achieve stability. Everything in excess or in dearth is bad. This principle is applied on people’s behavior in organizations because; their level of motivation is correlated to their perception of equity, justice and fairness in the organization. The more equity an employee’s perceived the more motivated they would be to achieve goals and vice versa.
How does an employee perceive equity? Employees compare the effort, time and work they do on the organization to the outcome they receive from it (payments, compensations, distinctions). They compare it to their co-worker’s who are in the same category as them.
Employees who perceive inequity and are under negative tension can make choices1; such as:
Change in input
Change their outcome
Choose a different referent
Quit the job
Change self-perception.
Change perception of others.
Hypothesis of the Equity Theory
The theory shows that employees are aware and concerned for their own payments and also with what their co-workers get.
Employees want to receive the same or more outcomes from their contributions to the job.
Employees are aware of what is equitable for them after comparing their inputs and outcomes with those of their co-workers.
Those employees who believe there aren’t in a equity corporation will attempt to reduce the inequity either by altering inputs and outcomes or by quitting the organization.
ERG Theory of Motivation
Clayton Alderfer developed the ERG Theory of Motivation. This theory divides the human needs into three different categories:
Growth needs. (The abstract need for personal development and self-growth)
Relatedness needs. (The need to have relationship with others)
Existence needs. (The physical or physiological needs for survival)
The ERG theory postulates that an employee’s behavior is the cause