4. People develop beliefs about what is a fair
reward for one’ job contribution - an exchange
People compare their exchanges with their
employer to exchanges with others-insiders
and outsiders called referents
If an employee believes his treatment is
inequitable, compared to others, he or she
will be motivated to do something about it --
that is, seek justice.
Equity
Theory
5. Model of Equity Theory
Outcomes by a person
Inputs by a person
Motivation Theories
6. Equity Theory - Exchange Scenarios
Motivation Theories
Case 1: Equity -- pay allocation is perceived to
be to be fair - motivation is sustained
Case 2: Inequity -- Underpayment.
Employee is motivated to seek justice. Work
motivation is disrupted.
Case 3: Inequity - Overpayment. Could be
problem. Inefficient. In other cultures
employees lose face.
8. To reduce inequity, employee may…
Reduce
inputs
(reduce
effort)
Try to
influence
manager to
increase
outcomes
(complain, file
grievance, etc.)
Try to
influence co-
workers’
inputs
(criticize
others’
outcomes or
inputs)
Withdraw
emotionally - or
physically
(engage in
absenteeism,
tardiness, or
quit)
8
Presentation Title
9. Equity Theory Applications
Develop tools to pay people in proportion to their contributions
Let employees know who their pay referents are in the pay system: identify
pay competitors and internal pay comparators.
Strive for consistent pay allocations
Monitor internal pay structure and position in the labor market for
consistency.
10. Lessons in Equity
Theory
• Pay attention to what employees’
perceive to be fair and equitable
• Allow employees to have a
“voice”
• Employees should have
opportunity to appeal
• Organizational changes,
promoting cooperation, etc. can
come easier with equitable
outcomes
• Failure to achieve equity could
be costly
• Climate of justice
12. Reinforcemen
t Theory
(Skinner,
1953)
• Behavior that is rewarded will be
more likely to be repeated and
strengthened (Thorndike, 1911).
• Behavior -> Consequence
- Reinforcement/ No
reinforcement/
Punishment
• Reinforcement - a desirable
consequence, e.g., rewarded
behavior increases the probability it
will occur in future.
13. Reinforceme
nt Theory
• Extinction - the process of
unlearning a behavior and the
consequences that formerly
reinforced it.
Schedules of Reinforcement
• Output Schedule (number of units)
• Fixed Ratio
• Variable Ratio
• Time-based Schedule (daily,
weekly, yearly, etc.)
• Fixed Interval
• Variable Interval
14. Schedules of
Reinforcement
• Continuous Schedule -
reinforce every behavior or unit.
• Useful for learning new skills
• Not practical for pay system
• Behavior is quickly
extinguished w/o
reinforcement
Motivation Theories
• Intermittent Schedule -
behavior is reinforced on a
partial basis.
• Behavior is strengthened
and takes longer to
become extinct once it is
learned.
15. Intermittent
Reinforceme
nt Schedule
Motivation Theories
• Reinforcement received after the
passage of time.
• Least resistant to extinction. (people
expect it)
• Ex. Monthly salary, hourly wage,
annual bonus.
Fixed Interval
• Reinforcement received on a variable
(uncertain) schedule.
• Reward less likely to be viewed as
entitlement.
• Ex. Quarterly profit sharing (some quarters
occur without profits) / Spot cash reward -
paid out “after the fact”
Variable Interval
16. Intermittent Reinforcement (Cont’d)
Motivation
Theories
Fixed Ratio
Reinforcement received according to
fixed amount of output
Ex. Piecework pay - worker get $1 for
picking 12 apples / Sales commission
- 6% of house selling price.
Variable Ratio
Reinforcement received according to
variable (uncertain) amount of output.
This schedule is most resistant to
extinction.
Ex. Entrepreneurship Rewards - One
takes risks with one’s capital and is
uncertain how much output will lead to a
big reward. / Gamboling behavior - slot
machines.
17. Reinforcement Theory - Applications
Motivation
Theories
Continuous reinforcement increases rate of learning
Intermittent reinforcement strengthens behavior that is learned.
Ratio schedules produce greater motivation than interval schedules.
Variable schedules produce stronger motivation than fixed schedules.
Pay may not always work with ratio or variable schedules, but praise, recognition
and feedback can be used effectively with intermittent reinforcement.