Equity theory would help the managers to communicate with their employees honestly, which can also lead to brainstorming sessions and evaluation of creative ideas. The main crux of the theory would be that employees get motivated with their inputs and also create a sense of equity fairness among employees. These act as a motivator to employees because when outputs do not match with inputs then it helps in the creation of an equitable pay system. When employees feel less motivated then they may restore perceived equity by reducing their inputs or attempting to reduce other's inputs or aiming to decrease the outcome.
On the other hand, when employees feel rewarded they might be successful in perceiving equity by increasing their input and hard work. The equity theory assumes that both the over-performing and underperforming employees are detrimental to motivation (Grant & Shin, 2011). An important controversy in motivation research concerns the competing predictions between expectancy and equity theory in situations that are characterized by the combinations of perceived and under reward inequity. Inequity theory when instrumentality is high the employees who feel that they are under-rewarded will be disturbed by the inequity and imbalance and they may reduce their effort in order to create a suitable continuum between their inputs and outcomes.
It is evident from the case study that Alex puts in the same amount of hard work as his colleague Denise and yet gets paid less. The immediate managers of Alex are impartial towards him and do not recognize his efforts and the inputs given by him and this has instilled dissatisfaction towards the employees. Although Alex and Denise work in the same department it is observed that Denise is paid $2.00 per hour more than Alex, which reflects the practice of partiality in the departmental unit.
Moreover, Dan’ s behavior towards Alex has not been formal and profession and is solely responsible for the lowering of his morale.
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