The motivation theories highlighted in the case which are Equity theory and Vroom’s expectancy theory. For the Equity theory which is developed by J. Stacey Adams, proposes that employees perceive and assess a ratio of jobs inputs related to the outcomes they received for their performance to seek either equity or inequity in their situation and then corrects any inequity. The term of equity in the Equity theory is related to the concept of fairness, justice, and treated equally between employees.
Employees make comparison relevant themselves and those of others , in case of their jobs inputs (effort, experience, competence, skills, seniority, or intelligence) and the outputs (praise, pay, rewards, recognition, benefits, raises, or position level) involved. A comparison can lead to three conclusions which are under-rewarded, over-rewarded and equitably rewarded while the employees might position in one of the three conclusions. The outcomes getting less than their jobs input, the employees which is under the inequity and under-rewarded condition.
When employees affected by inequity and perceived that they are under-rewarded and treated unfairly, demoralize and problem of performance occur in employees. Typically, they ask for a reasonable and logical explanation for inequity. Moreover, employees might try to eliminate the inequities by changing jobs inputs and outcomes. Employees change the jobs inputs by decreasing inputs which are doing less work, taking long breaks and reduce effort, commitment, attendance, training or so on. Besides the change jobs inputs, employees also try to change outcomes for reduce inequity.
For the possible responses of change outcomes which are require for more pay, request a raise, formal recognition with office, responsibilities to match or ask for different working conditions. In addition, employees might distort the perceived importance and responsibilities of jobs or the rewards and outcomes that flow from them. It is worth mentioning if employees perceived that they treated inequity and could not be explained reasonably, they might lead to quit or resign from the job and find and take a better job with closer balance.
For the equitably rewarded, that is employees perceived their jobs inputs and outcomes are perceived as being equal in comparison to those of relevant others, they might be more obey the instruction, satisfied ,motivated and there’s no problem until they perceived that a relevant other is getting more for the same job inputs or the outcomes are same but less of jobs inputs. When inputs and outcomes are perceived as being equal and fairness, employees are motivated. The third conclusion is when employees getting more outcomes while their jobs inputs is less , the employee's assessment is inequity and over-rewarded.
However, being over-rewarded does not influence most employees. According the research suggest, employees might think rational about that they are worth to get it. By the way, employees might be reduce perceived inequity by increasing inputs or decreasing outputs which are improved quality of jobs inputs, working more harder, longer and effort , taking a pay cut or reduce absenteeism. The referent that employees make a choice and put into the complexity of equity theory. Evidence illustrate that the referent select is an important variable in equity theory.
There are three referent comparisons that employees can assess which are the other persons , systems, or selves individuals compare themselves against. Each of the three referent comparisons is considerable. The "persons" category includes employees might compare their pay with other colleagues which in a similar situation or position inside their current organizations, or compare their pay with that family member, friends, neighbors, or professional associates in other organizations.
For the organizational pay policies, allocation, distribution and procedure , all those which have been classified in the "system". The "self" classified refer to inputs-outcomes ratios that are distinct to the individual. In reaction, employees' experiences and contacts and is affected by standard such as family commitments or past jobs. Initially, equity theory focused on distributive justice and procedural justice. Distributive justice which is the perceived equity and fairness of the amount, distribution and allocation of rewards among individuals.
However equity should also focused on seeking out at issues of procedural justice, which is perceived fairness of the process used to determine the distribution of rewards. The evidence illustrate the distributive justice has a greater influence on employee satisfaction than procedural justice, while procedural justice tents to influence employees' organizational commitment , trust in their boss and intention to resign.
As a consequence, managers should consider openly sharing information on how allocation decisions are made, follow consistent and unbiased procedures and handle in similar practice to improve the perception of procedural fairness. Moreover, by improving the perception of procedural justice, employees are likely to view their boss and the organization as positive even if they're dissatisfied with promotion, pay and other personal outcomes. In conclusion, equity theory show that , motivation is influenced obviously by relative outcomes or rewards as well as by absolute rewards for most employees.
Managers can create equity or inequity which consistent with rewards should be equitable and fairness. A manager should be able to state objectively and logical explanation why an individual got a higher merit increase than another If employees perceive that they are not treated equitably and fairly , demoralize and problems of performance occur. When employees represent high performance , they should be rewarded. But the managers must let employees realize the inputs needed to attain certain outcomes.