Hello Group4 (2)

8/8/2019 Hello Group4 (2)

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Hello group4 Presentation


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Equity Theory

B alancing Employee Inputs and Outputs1

Exchange Scenarios2

Equity Theory Applications3

Conclusion

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Strategies for Resolution of Inequity


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Balanc ing Emp loyee I n puts and Outputs

In putsEffortLoyaltyHard WorkPersonal sacrificeSkill

Ability AdaptabilityFlexibility

OutputsFinancial rewards (salary,benefits, perks, etc.)Intangibles that include:Recognition, Reputation,Responsibility, Sense of

Achievement, Praise, Job

security, Stimulus, Senseof achievement/growth.

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Ex c h ang e S c e na rios

Equity

In equity -- U nd erp a yme n t

In equity - Overp a yme n t

Equity Theory Various

circumstances


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Equity Theory v a rious c ir c umst anc es

Case 1: Equity -- pay allocation isperceived to be fair - motivation issustainedCase 2: In equity -- U nd erp a yme n t.Employee is motivated to seek justice.Work motivation is disrupted.

Case 3: In equity - Overp a yme n t . Couldbe problem. Inefficient. In other culturesemployees lose face.


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C a uses of i n equ al ity

The labor marketInnate ability

EducationRace, and culture



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C o n seque nc es and effe c ts of I n equity

Social cohesionEconomic incentives

Economic growth



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Str a te g ies for

Reso lutio n of I n equity Alter the persons outcomes Alter the persons inputs

Alter the comparison others outputs Alter the comparison others inputsChange who is used as a comparison

other Rationalize the inequityLeave the organizational situation



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Equity Theory App lica tio n s

D evelop tools to pay people in proportionto their contributionsLet employees know who their payreferents are in the pay system: identifypay competitors and internal paycomparators.

Strive for consistent pay allocationsMonitor internal pay structure and positionin the labor market for consistency.


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K ey Poi n ts

Much like the five levels of needs determined by Maslowand the two factors of motivation as classified byHerzberg (intrinsic and extrinsic), the Adams EquityTheory of motivation states that positive outcomes andhigh levels of motivation can be expected only whenemployees perceive their treatment to be fair. Anemployees perception of this may include many factors.



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K ey Poi n ts

The idea behind Adams Equity Theory is to strike ahealthy balance here, with outputs on one side of thescale; inputs on the other - both weighing in a way thatseems reasonably equal.If the balance lies too far in favor of the employer, someemployees may work to bring balance between inputsand outputs on their own, by asking for morecompensation or recognition. Others will be demotivated,

and still others will seek alternative employment



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C o ncl usio nIf the balance lies too far in favor of the employer, some employeesmay work to bring balance between inputs and outputs on their own,by asking for more compensation or recognition. Others will bedemotivated, and still others will seek alternative employment



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THANKS FOR LISTENING



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