Adam's equity theory

3.4. 4 Equity Theory

Adams ‘s (1965) equity theory is another form of motivation. In this model, like in expectancy theory, people are viewed as having thoughts, feeling, and opinions that affect their work. He also proposes that the social comparison process begins with the individual’s assessment of what he or she need to puts into the job relative to what is received from it. That is, the person develops a cognitive ratio composed of the inputs to the job and the return (output) from it.

Inputs

• Typically, inputs are consider as an effort, loyalty, hard work, commitment, skill, ability, adaptability, flexibility, tolerance, determination, heart and soul, enthusiasm, trust in our boss and superiors, support of colleagues and subordinates, personal sacrifice, etc.

Outputs

• The outputs typically are define as financial rewards, for example pay salary, expenses, perks, benefits, pension arrangements, bonus and commission – plus intangibles – recognition, reputation, praise and thanks, interest, responsibility, stimulus, travel, training, development, sense of achievement and advancement, promotion, etc.

According to Adams (1965), people who feel that there is fairness between inputs and outputs. T he output/input(O/I) ratio denotes the proportion of job inputs (I) to job outputs (O), and it expresses to the extent to which of the exchange is felt to be appropriate. People feel it will be fair if the exchange of the output is seen to be as equal as the input. When outputs are greater than inputs, people know they are overpaid, and conversely, when outputs are less than inputs, people feel underpaid. In a second phase of the process, people engage in social comparison. They begin by assessing the O/I ratios of others at work. Then, the person compares their self-ratio with the ratios of other significant persons.

3.4.4.1 Discussions on Equity Theory

Equity theory has been used as a guide for paying and motivation, particularly in terms of changes in the quality and quantity of performance. Reviewers of the research have reported that the predicted effects of underpayment on performance are well supported (Campbell and Pritchard, 1976; Goodman and Friedman, 1971). Decreased production among underpaid hourly subjects has been observed as predicted (Pritchard, Dunnette, and Jorgenson, 1972). Increased production coupled with decreased work quality among underpaid piece rate subjects also has been observed (Lawler and O’Gara, 1967).

3.4.6 Goal-setting Therory

Like equity and expectancy theories, goal-setting theory is consider as a process theory. Locke (1968) initiated the original work on this theory. The theory identifies the contents of the motivational structure, but the greater emphasis is on the process of motivation. Goals are the central feature of the motivational structure. His studies resulted in three main conclusions:

• More difficult goals result in higher levels of performance than easy goals. This is the first conclusion. The outcomes of a series of experiments showed that “although subjects with very hard goals reached their goals far less often than subjects with very easy goals, the former consistently performed at a higher level than the latter” (Lock, 1968).
• Specific goals produce higher levels of performance than general goals (e.g. ‘Do your best!’) Locke suggests that one of the features of specific, hard goals is that they prolong effort during the latter portions of long work sessions (Locke, 1968). Locke also reported on a study by Meyer, Kay and French (1965) into goal-setting during appraisal interviews. They found that the tasks that were translated into specific goals resulted in greater performance outcomes than tasks that were not.

• Behavioural intentions influence the choices people make. This is the final conclusion. Behavioural intention was defined as “the intention to make a certain task choice or to respond in a certain way” (Locke, 1968). In other words, Locke concluded that the level of difficulty of a chosen goal depended on what the person undertaking the task was aiming to achieve.

3.4.6.2 Discussions on Goal-setting Theory

Goal-setting theory is useful to many managers because much of people management is specifically about performance against goals. It is also a theory that human resource professionals are likely to be familiar with because it is often focus on objectives.

Although the Goal-setting theory specifically states that goals have to be considered valid for them to be motivating, the theory does not cover the issue of goal commitment according to Hollyforde and Whiddett (2002). People’s commitment to a goal is an obviously key to anticipating their motivation to succeed at it. Carroll and Tosi (1973) reported that the self-esteem seems to be an important factor here. For example, managers with high self-esteem reported they were more persistent in meeting their goals than those managers with low self-esteem.

In general, Goal-setting theory is a theory that has great relevance for managers. The three conclusions of the theory that suggest that the most motivating goals are not only specific but also challenging must ring true for many managers.