The Equity Theory Of Motivation Business Essay

Motivational Theories

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14th April, 2013

Motivational Theories

Most probably as per the most popular explanations, individual needs determine motivation. Content theory of motivation defines that several factors are responsible for motivating an individual. These factors can be intrinsic, but several external factors may be the reason as well similarly.

In brief, all people deserve to meet their needs. Few are primary needs, like food, water and sleep. Physical side of behavior determines these needs and these are unlearned needs by nature. Being biological nature wise and they have an influence on behavior in general and are easily identified.

Secondary needs, on the contrary are more psychological, which signifies that those are generally acquired through experience. Diversity of these needs can occur by individual and by culture. Internal state is the integral part of secondary needs, such as achievement, desire of power and love..

Peter Ebong Ajang rightly defined motivation as "Motivation by definition refers to what activates, directs human behaviour and how this behaviour is sustained to achieve a particular goal."(Assessing the role of work Motivation on Employee Performance, pp.8)

Several theories have been provided by number of theorists like, Robert Owen, Abraham Maslow, McGregor, Clayton Alderfer, Frederick Herzberg and David McClelland which provides explanation on needs being a motivational source.

As per Abraham Maslow’s definition, need is a psychological or physiological deficiency which a person feels an urge to satisfy. A person’s behaviors or attitudes can get hampered due to the tension created because of this need. Multiple needs may motivate humans and these needs exist in a hierarchical order.

According to Maslow’s "…..gratification of one basic need opens consciousness to domination by another, higher need." (as cited by Casey P. Hayden, March 2009). There are two basic principles of Maslow’s theory First is the Deficit principle which signifies that People do not get motivated with a satisfied need as people tend to satisfy the needs which they are deprived of. Another principle is Progression principle which elaborates on Five needs which he identified are existing in hierarchy, a need irrespective of the level arises only after the needs of lower level gets satisfied.

Hierarchy of Human Needs can be categorized as higher and lower level needs. Higher level needs are comprised of self actualization needs, participation in decision making and esteem needs. Whereas lower level needs include social needs, safety needs and physiological needs.

As per McGregor, people in an organization can be categorized in two manners. Firstly, the X category which is basically negative and the positive category is falling under the Y category.

As per the assumptions of theory X, Employees have lesser interest to work and will tend to avoid it as and when possible. According to Anna Salanova & Sanni Kirmanen, as per the assumption of Theory X, people prefers to be directed and controlled rather than shouldering responsibility, and these people are devoid of ambition (March,2010)

On the contrary assumptions as per theory Y says, these people try to meet their commitment towards their goals by exercising self direction and self control. Dr. David Potter Specified in his article that, crucially theory "Y" is an anti thesis to theory "X" which signifies that huge potential is possessed by human adult for personal growth and development.

(Dec.2, 2011)

An organization operating on Theory X method is generally authoritarian in nature. On the contrary Theory Y organizations can be considered as "participative" organization.

Another framework has been offered by Frederick Herzberg which indicates the implication of motivation in work sphere. Charl Van Vyk mentioned that according to Hertzberg the sources of work satisfaction were being termed as "motivator factors". (Jan2011) Herzberg identified two sets of factors that effect the motivation in workplace. First is the hygiene factor which includes job security, salary, work conditions, technical supervising quality and organizational policies. These may not cause motivation in employees, but may result in dissatisfaction if one of these is absent. Second factor is that the motivators or satisfiers which involve such aspects like achievement, responsibility, feelings of recognition, growth opportunities, which are crucial for motivation and job satisfaction.

Tan Teck-Hong and Amna Waheed cited that "A main point to be noted from Herzberg research was that he perceived motivational and hygiene factors to be separated into two different dimensions affecting separate aspects of job satisfaction."(HERZBERG’S MOTIVATION-HYGIENE AND JOB SATISFACTION IN THE MALAYSIAN RETAIL SECTOR: MEDIATING EFFECT OF LOVE OF MONEY, Jan 2011)

As per David McClelland's acquired needs theory, everyone has different modes to prioritize needs. He believes that those needs are not from birth of an individual, but through life experiences those are actually learned. As per him, need for achievement is the urge to excel. Second is the need for power, which is the desire which causes others to go for a behavior which they would not have done in normal circumstance. Third aspect is the need for affiliation, which is the desire for close, friendly interpersonal relationships and to avoid conflicts.

Michal Kirstein believed that "Organizations design motivation systems to encourage employees to perform in the most effective way but also to attract potential candidates." (The role of motivation in Human Resource Management: Importance of motivation factors among future business persons. pp-2) (Aug.2010)

The basis of the equity theory is the principle of equity or balance. This motivation theory mentions that there is a correlation between an individual’s level of motivation and his perception of fairness, justice and equity practiced by the management. Increase of motivational level depends on the increase of individual’s perception of fairness and vice versa. When fairness is evaluated, the employee goes for a comparison of job input (as in contribution) and outcome (as in compensation) and this comparison is also made with another peer of his equal category/cadre. Such comparison is made by D/I ratio (output-input ratio)

"Equity theory deals with human motives and it should have wide applications in understanding organizational behavior." (The Utility of Equity Theory in Enhancing Organizational Effectiveness)

When there is an equality of the ratio, equity is perceived. "Equity tension arises due to inequality of the ratio". This was being referred by J.Stacy Adams as a negative tension state which created a motivation in him to do some right thing to get rid of tension.

As per Expectancy Theory, the urge to act in a particular way depends on the strong expectation associated with the act that will give and attractive outcome inconsequently.

This theory can be considered as one of the most popular explanation of motivation from Victor Vroom. In spite of being criticized as well, the theory gets supported by most of the evidence.

This theory gives stress to three modes of relationships. Firstly the effort – performance relationship which signifies that the possibility perceived by the individual that if a particular amount of effort is exerted it will be leading to performance. Second mode is Performance – reward relationship, which reveals the rate at which individual believes that a given amount of performance level will result in attaining the expectations or outcomes desired by the employer. Lastly, the Rewards – personal goals relationship which elaborates that Organizational rewards renders satisfaction to individual personal needs and goals and the potential reward is considered to be the attraction for the individual.

A motivational force is created by these three factors which enable an employee to work towards attaining satisfaction.

According to Petty et al, "However, later research concluded that employee motivation and job performance are indeed positively correlated (as cited by Brent Keijzers, 2010).

So after going through all these major theories of motivation it can be perceived well that financial aspect can not play the pivotal role in motivating an individual. Lot of other aspects has contributed on motivating an individual.

Certain implication can be derived from Maslow’s theory which was meant for business managers. There are two vital points: (1) Each employee is not driven by similar needs. And (2) needs which can make an individual motivated can vary over period. Thereby, managers should be taken into consideration on which needs different employees are satisfying and the form of recognition and rewards should be structured accordingly. It may seem apparently that if the employee was given options to choose between a plaque or rise as a reward for his accomplishments, he would have undoubtedly gone for the money. But in reality, he would have opted for a public recognition of his performance to a pay hike.

The same question can be asked about Herzberg’s model as was done with Maslow’s on how the importance are given by the managers Say for instance, X is working as a Senior manager in an accounting firm, where he is supervising an accountant team, each of whom have worked with the firm for around five years. He will follow certain modes through which he can he imply Hergberg’s model to motivate the employees? He should begin with hygiene factors. He will check on the facts whether the salaries which are being offered are reasonable or not. He will check on the working condition and will take into account if each accountant is provided with individual workspace. If hygiene factors like these are not met, the employees will remain dissatisfied with their jobs.

Simultaneously, fixing such problems related to hygiene factors may reduce job dissatisfaction, but not necessarily, job satisfaction will get improved. Thus, motivational factors should be identified to stimulate satisfaction and motivate someone for better performance. The work needs to be stimulating and challenging. It should be figured out if employees gain recognitions for good performance. It should be checked if the works assigned may help in advancement of the firm. As per Herzberg, motivation needs twofold approach: increasing satisfiers and removing dissatisfiers.

As per Equity Theory of motivation, when the ratio of contribution to rewards is perceived by an individual to be comparable with another, they consider that they are getting equitable treatment, but inequity is perceived when the ratio is out of balance. At times people get a perception that they are getting better treatment than others. But more often they consider others being treated better than themselves. This will be their conclusion when they get their grade. They will calculate their contribution ratio (writing and research skills, hours of work) to rewards (grades of project), will compare their colleagues’ ratio and will come to conclusion if both the ratios are in balance.

Certain actions are taken by an employee when he figure out that he received an inequity. The individual may attempt to bring the ratio within balance, either by reducing inputs ( refusal to take extra tasks, work lesser hours) or by enhancing outputs (demanding a raise). If this strategy is not successful, the employee may lodge complain to a supervisor, quit job, or go for rationalizing the situation (perhaps will try to decide that the situation is not too bad ultimately.)Equity theory concentrates on rendering proper treatment on workers, especially while determining compensation, which is, for sure, a common point of comparison.

Now to start with Expectancy Theory and it should be observed how to apply the same to a real-world situation. Say a company goes through a price hike which makes it tough to sell the products. Naturally that will affect employee’s motivation and they will suffer. Employees may loose confidence that the effort they will put will lead to a dissatisfactory performance. But, for instance, if the company introduces a product by which employees may achieve bonus only if the product is not cancelled by the buyers in a specified period. This policy again hampers motivation. Now even after selling more than ten products employees will be less confident on the fact whether they may get bonuses. Motivation will get reduced as the link between reward and performance has got weakened. So what expectancy theory clearly signifies is managers should offer such reward to employees that they will treasure, set such a level of performance which they can attain and ensure a strong connection between reward and performance.

So it’s an expensive mistake to get lost in the wrong theory that only salary hike may result to satisfy the employees. Lot of other important factors are associated with the happiness of the employees.

Recognition is an appreciation for the achievement of the employees and they often cherish the attention they get from their superiors likewise. Even a physical applause to the employees by giving a round of applause may give wonderful result. By investing bit of their precious time, managers may provide one on one coaching or training to their employees. This may motivate them to a great extent. By rewarding them with an excellent working ambience, instant praise when you find some excellence in their working style, offering a leadership role, shouldering additional responsibilities, can boost their confidence and satisfaction level which may ultimately help in their rapid progress in terms of performance.