How Can Equity Theory Be Used to Motivate Employees at Bain & Company - Case Study Example

Introduction Motivation of employees is an essential aspect that greatly influences how employees behave in the organization. However in the recent years, especially after the harsh implications of the recent economic downturn, motivating employees can rather challenging for organizations. As witnessed during the crisis many organizations took harsh remedies on employees in order to cut costs .This include downsizing and also reduction of bonuses and salaries that employees received. Bain & Company however is quite unique in the sense that instead of cutting back sharply Steve, Ellis the CEO of the company is hiring additional consultants. Motivation is therefore a crucial factor in Bain & Company. This paper seeks to evaluate how various motivational theories can be used to motivate employees in the company. How can equity theory be used to motivate employees at Bain & Company The equity theory was initiated in 1963, by John Stacey Adams. Adams centered his approach on the aspect of fairness in social relationships within the organization. According to Adams when rewards, punishments and resources are distributed in relations an employee output / contribution, then the employee is bound to maintain equity between the contributions they make to the organization and the results that they attain from the organization (Adams ,1965). One of the ways in which the equity theory can be used to motivate employees at the Bain & Company is by establishing an organizational culture of fairness within the organization. As highlighted by the equity theory many employees greatly focus their minds on how they are treated .This therefore influences how they perform their tasks and also how they relate to other employees within the organization. Bain & Company intends to increase the numbers of staff in the company by recruiting young and energetic workforce even amidst the tough implications that were brought about by the economic downturn. Although it is argued that talent is cheaper, due to the fact that the new ideas derived from talent can assist the company to gain market share. It is vital for the company to establish a culture of fairness both for the incoming employees and the already existing employees within the organization. For instance the after recruiting the new staff the company should not dismiss the views of the already existing staff just because they want to tap new ideas from the fresh and knowledgeable newly recruited staff. As highlighted by the case, talent retention is actually an essential aspect during the recession. Many managers tend to forget that they need to talent retention especially during tough times which require them to cut costs and also come up with strategies that the keep the company on its feet. It is therefore essential Bain & Company to retain the talents of the employees who were already in the organization, despite of the existence of new recruits with more knowledge and skill. Talent retention of the employees who were in the company earlier may involve giving them more areas to work on, getting their ideas and also taking them for more training. Another way in which the equity theory can be used to motive the employees of Bain & company is through establishing an equal level of input/outcome for all employees with similar qualifications. According to Adams , employees tend to make a comparison of their inputs that is; their quality of performance, efforts and training and their outputs which include there remuneration and their job titles. As a result if there is equity in this aspects, then employee are bound to perform well and relate well in the organization. It is therefore essential for Bain & company to establish as an equal level of input/outcome for all deserving employees. For instance based on the fact that the company is interested in grabbing very talented people , who have just come from the MBA class with all the skills and knowledge, this does not imply that the benefits and rewards given to this new employees should be far better the employees who were already in the organization and have the same qualifications. Furthermore the job titles of the new staff should be accorded according to their level of training. Apart from adopting fairness in the input/outputs, Bain & Company should also develop fairness in the nature of tasks given to every employee. If the tasks allocated to both the exiting staff and the incoming staff are made interesting for all employees then employees are bound to be motivated. Armstrong (2006) highlights that; the nature of tasks given to employees also influences their behaviour. As a result fairness should be practiced when allocating tasks. This can be undertaken by strategies such as changing positions of work (job rotation), job enlargement (addition of tasks) and job enrichment (increasing numbers of responsibilities). The use of the Expectancy theory to Explain motivation in Bain & Company The expectancy theory was developed in 1964 by Victor Vroom. The theory is grounded on the view that employees behave in a certain manner due to the level of outcomes or results they expect (Friedman, et al 2008). The expectancy theory can be used to explain motivation in Bain & Company in the sense that amid the workforce reduction or firing freeze by many companies, Bain & Company has adopted the strategy of adding consultants. The big question that arises therefore is whether the company will actually be capable of meeting the expectancy theory especially amid the challenging economic environments that has affected organizations, customers and investors. As propagated by the expectancy theory, the motivation of employees is usually influenced by the expected outcomes. As a result the move by Bain & Company to employ new workforce will lead to a scenario whereby the employees anticipate that the effort they will put in, will also give them the desired rewards. This is influenced by the following variables; MF (motivation forces) = Instrumentality x Expectancy   x Valence One of the essential variables of the expectancy theory that is applicable to the context of Bain & Company is instrumentality. The instrumentality variable is grounded on the view that when an employee attains a certain level of expectation, he or she is given a greater reward. An effective recommendation for of Bain & Company in order to fulfill the expectancy theory is to attach reasonable rewards to the tasks it provides to the employees. For instance although the company needs to tap the talents and ideas of the newly recruited staff, it’s not always viable to attach very high bonuses to performance. This is to avoid a scenario whereby the company can not pay for the bonuses which basically results to de-motivation of the workforce. The expectancy probability is another variable that entails the expectations that individual efforts will lead to a certain desired performance. In despite of the effects of the economic downturn, it is recommended that Bain & Company should not rewards individual efforts with rewards that are very low or not give any rewards for exceptional performance. This if because is the company does not motivate its workforce effectively, they will be de-motivated, as argued by the expectancy theory, the effort placed by individual employees on a particular task, is influenced by the rewards linked to the task. Another variable applicable is valence. Valence is the value that employee puts on the rewards they get from the organization. This includes an employee’s needs, goals and values. In order for the efforts of the employees to effectively yield the desired results that are required by Bain & Company it is essential for the company to give rewards that can meet the employee’s needs, goals and values. Elements of Maslow’s hierarchy of need theory of motivation are evident in Bain & Company The Maslow’s hierarchy of needs is one of the key motivational theories. The theory propagates five motivational stages that have to be fulfilled in order to motivate employees. The five stages include biological needs such as food, air, warmth, sleep and many others. Safety needs include security, stability, limits and order. Love and belonging needs include achievement, self esteem, dominance and mastery .The last level is the self actualization needs, this includes attaining self fulfillment, personal fulfillment and growth (Amstrong, 2006). The Maslow theory is evident in Bain & Company in the sense that the organization has created a workplace environment where employees can fulfill their physical and their psychological needs. For instance in despite of the fact that other organizations are rapidly reducing employee salaries due to the effects of the recession, Bain & Company has still maintained its existing staff. In addition the company still provides them with the required remuneration. This implies that the company is effectively meeting the psychological needs of the employees. Bain & Company has also focused on the aspect of talent management as an essential aspect that can lead the attainment psychological needs. If the talents of both the incoming staff and the existing staff are well managed, then the employees are bound attain needs such as Love and belonging needs which include achievement, self esteem, and dominance and mastery .This may further result to self actualization if the trend is well maintained. Conclusion From the above analysis it can be concluded that Bain & Company has the ability to effective motivate its workforce, this is because despite of the hard effects of the economic crisis the company is still wiling to make an investment on employees as one of the key resources of an organization. In addition the company believes in getting things done through the human resource, this will therefore facilitate good performance for the organization in the future. . References Amstrong, M, 2006, Human Resource Management Practice, 10th Edition, Kogan Page Limited, London. Adams, J.S. 1965. Inequity in social exchange. Adv. Exp. Soc. Psychol. 62:335-343. Friedman, B, Cox, L, Larry, E, 2008, An Expectancy Theory Motivation Approach to Peer Assessment. Journal of Management Education , 32 (5), 580-612. Read More