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HCM 433 MANGEMENT AND ORGANIZATIONAL BEHAVIOUR.pdf

HCM 433 MANGEMENT AND ORGANIZATIONAL BEHAVIOUR.pdf

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Equity theory focuses on social comparisons – people evaluating their treatment by the<br />

organization relative to the treatment of others. According to Adams (1972) and Jacques (1961) in<br />

their equity theory, an employee is not so much concerned with the absolute amount of money (or<br />

the total compensation) paid out to him but with the perceived relationship of what he gets vis-àvis<br />

what others (i.e. his counterparts) receive (Banjoko, 1996). This approach holds that people<br />

begin by analyzing what they contribute to their jobs (time, effort, education, experience, and so<br />

forth) relative to what they get in return (salary, benefits, recognition, security). The result is a<br />

ratio of contribution to return. They then compare their own ratios to those of other employees.<br />

Depending on their assessments, they experience feelings of equity (satisfaction) or inequity<br />

(dissatisfaction). i.e:<br />

Equity OA = OA<br />

IA<br />

IB<br />

Where = A = The Employee and B = The Relevant Other<br />

Inequity (Dissatisfaction) OA > OB<br />

IA<br />

IB<br />

Here Mr. A. is dissatisfied because he receives the same compensation as Mr. B. even though the<br />

ratio of his output to inputs is greater than that of Mr. B. Such perception or feeling of equity in<br />

pay can lead to serious tension. Griffin et’al. (1999) however noted that for an individual to feel<br />

equitably treated, the two ratios do not have to be the same-they need be only fair.<br />

When people feel that they are being inequitably treated, they may do various things to restore<br />

fairness. For example; (1) they may ask for raise, (2) reduce their efforts (3) work shorter hours or<br />

(4) just complain to their bosses. (5) they may also rationalize, (6) find different people with<br />

whom to compare themselves, or (7) leave the job altogether. The concern has nevertheless been<br />

expressed that people may overestimate their own contributions and the rewards other receive.<br />

3.1.3 Goals Setting Theory<br />

Another theory sometimes considered under the heading of motivation to work is goal theory, or<br />

the theory of goal – setting. This theory is based mainly in the work of Locke (Mullins, 1996).<br />

The basic assumption of goal setting theory is that people’s goal or intentions play an important<br />

part/role in determining behaviour. The belief is that people strive to achieve goals in order to<br />

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