Adam's Equity Theory and Vroom's Expectancy Theory of Employee Motivation - Literature review Example

Motivational Theories Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Introduction Motivation is defined as an action to psychologically arouse a person to act towards a desired objective; motivation seeks to elicit behavior that is directed at achieving this goal. In organizational theory motivation of employees will thus be aimed at arousing employee behavior that is directed at achieving the organization's goals. According to Adams (1965) motivation from a psychological perspective is the cause of our action or behavior. Most people believe that employees are mainly motivated by monetary benefits but this is not true. Since the Hawthorne studies motivation of employees is one of the mainstays of human resource management in organizations (Swanson 2001). Where an organization is able to motivate its employee, it reaps benefits in terms of better performance from the employees. This paper analyzes the employee motivation practices of Diaco, an Australian firm based in Bondi Beach, Sydney. The paper uses the equity and expectancy theory to analyze the effectiveness of Diaco’s employee management tactics. Motivational theories After the Hawthorne Studies, HRM research has concentrated on finding out what and how employees can be motivated (Ramlall 2004). It is now agreed that there are five major theories that can explain employee motivation, among these are; Vroom’s expectancy theory, Adam’s equity theory, and skinner’s reinforcement theory (Swanson 2001). In this paper we concentrate on Adam’s equity theory and Vroom’s expectancy theory. Equity theory Balance or equity is the core principle that underpins Adam (1964) equity theory of motivation. According to this theory if an individual feels that an organization’s management acts just and fair and equity is maintained they are motivated. For employees to be motivated a fair balance between their inputs (skill level, enthusiasm, tolerance and hard work) and outputs (salary and benefits) has to be struck (Ramlall 2004). If this balance is achieved then an organization creates and maintains a strong and productive relationship with its employees. Overall good application of the Equity theory leads to contented and motivated employees. Like other theories of motivation, Equity theory accepts that employee perception and evaluation of his relationship between the employer and employee is affected by multiple factors (Ramlall 2004). According to equity theory de-motivation in employees occurs when an employee feels they are giving more inputs to the organization than the outputs they are getting. Employees react to this perceived injustice by reducing effort, disgruntlement or they become disruptive. This behavior is an effort by employees to correct the disparity between their outputs and inputs. However, equity theory departs from other motivational theories like Maslow’s hierarchy of human needs in that it compares an individual’s situation with those of others in a similar situation (Ramlall 2004). These people in similar situations in Equity theory are referred to as referent others. Another important distinction made by the equity theory is that the input of employee to work is far more than just working hours and their outputs from employers are more than just money. Equity theory at Diaco The management at Diaco have managed to successfully apply the equity to motivate their employees. Diaco offers its employees work breaks that would be considered unconventional in other companies. By giving their employees an option to relax at the beach, Diacao is recognizing that employee inputs in the organization are not only working hours. According to Ramlall (2004) set working hours tie a worker's success to the organization’s set hours instead of the organization's goals. Secondly, setting work hours denies the worker’s autonomy over their work a very important factor in building trust in employees and consequently motivation. Although Diaco offers a range of benefits to its employees including a day care center and medical insurance and 50% tuition for employees who want to pursue further studies. From the perspective of Equity theory, this practice may not be effective in motivating employee. By offering all employees the same benefits, Diaco fails to keep in mind the fact that employees will compare their benefits with those of others. High performing employees will feel they have not been treated fairly if they get the same employment benefits as casuals. Diaco shows a greater appreciation of the Equity theory in motivating their employees by showing concern for the environment. Diaco’s 1% revenue contribution to environmental groups is likely to give the company an image of a just and fair corporation. Furthermore, Diaco offers its employee a six week paid leave to work for environmental initiatives further enhancing the perception that they are just and fair to not only their employees but the society at large. With the above stated motivational inputs it is fair for Daico to demand hard work, creativity and teamwork. The workers at Daico should not feel they are being treated unjustly as the company tries to balance the rewards they offer them with the inputs of the employee to the company. Motivational practices at Daico and Expectancy Theory According to Ramlall (2004), the expectancy theory assumes that people’s behavior is a result of a conscious effort to choose an alternative among many, the choice of an alternative is related to belief, attitudes and particular perception among other psychological processes. The alternative chosen over others is taken as it is most likely to lead to the desired outcome. Ramlall (2004) asserts organization have to link rewards directly with performance, recipients of the rewards must also want and deserve those particular rewards. According to Vroom (1964) the mental components of motivation are called Valence, Instrumentality, and Expectancy. Expectancy is defined as the belief that desired performance (P) goals are a result of one’s efforts. Instrumentality is the belief that if performance expectations are met the performer will be rewarded. According to Ramlall (2004) where reward is equal for all employees instrumentality is low. Valence is concerned with the level of satisfaction person expects to receive from work related activities and not from the real value they actually receive. In other word Valence is the value that an individual perceives the reward to have. Motivational force is derived from multiplying the three components of motivation and individuals opt for the behavior with the most motivational force (MF). According to Porter and Lawler (1968) the effort of employees in their work is directly proportional to the amount of reward they believe they will get from accomplishing the task. The expectancy theory emphasizes that employees belief that they will get an equitable reward for the effort in their work is the main source of motivation. Workers believe they will get rewards in the future if they are already receiving rewards for the same. Porter and Lawler (1968) argue that employees with higher skills perceive that their performance is higher although they employ less effort in their work. Expectancy theory as applied at Diaco Most of the motivational practices at Diaco are inconsistent with the expectancy theory. According to Vroom (1964) effort, performance and rewards must be linked for employees to be motivated. In comparison, the day care center and the health benefits at Daico are provided for all workers including casual. The inclusion of casuals in particular as recipients of rewards is very inconsistent with the expectancy theory. As seen earlier, workers with higher level skills perceive their performance is higher than those of other workers even though they might have expended equal or lesser effort. By offering casuals the same rewards as senior level executives, Diaco is likely to achieve a lower rate of motivational force among its employees. The senior employees may perceive the casuals do not deserve the rewards the firm awards them. Although Diaco appears to have a full range of benefits for their employees it is unclear if the employees want the rewards. It is in doubt if employees want to take a break at the beach on hot days and it appears that the CEO pushes them to take the break. Another reward that seems to be inconsistent with the expectancy theory is the 6 week paid off, where employees may perceive they are being forced to work for environmental conservation while it is not their interest. However, one of the most attractive benefits for working with Diaco, is the 50 per cent tuition that is provided for any worker wishing to further their education. Despite this all the motivational practices of Diaco are inconsistent with expectancy theory as they are not tied to performance. Conclusion Organizations must realize just offering rewards is not enough if the organization is aiming for optimum levels of motivation among employees. Rewards need to be equitably shared out if motivational goals of an organization are to be achieved. An analysis of Diaco shows the organization offers employees equal reward regardless of their performance or effort in the organization. One of Diaco’s failure to comply with both the equity and expectancy theory of motivation is offering casual employees the same rewards as more skilled counterparts. From a close analysis of both equity and expectancy theory the idea that rewards must be linked with employee performance are consistent. For a sense of justice and fairness to prevail reward levels must be equal to the performance of an employee. References Dessler, G 1999, How to earn your employees' commitment, Academy of Management Executive, vol 13, no. 2, pp. 58-67. Adams, JS1965, Inequity in social exchange, Advances in experimential social psychology, vol. 2, pp. 267-299. Swanson, R 2001, The Theory Challenge Facing Human Resource Development Profession. AHRD Annual Conference. Vroom, VH 1964, Work and motivation, Wiley, New York. Porter, L & Lawler, E 1968, Managerial Attitudes and Performance, Irwin, Homewood. Ramlall, S 2004, A review of employee motivation theories and their implications for employee retention within organizations, Journal of American Academy of Business, 5(1/2), 52-63. Read More