Motivation II:

Equity,
Expectancy, and
Goal Setting

Chapter Seven
McGraw-Hill/Irwin
2012 The McGraw-Hill Companies, Inc. All rights reserved.

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Equity Theory
Equity theory
model of motivation
that explains how
people strive for
fairness and justice in
social exchanges or
give-and-take
relationships

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The Individual-Organization
Exchange Relationship
An employees inputs, for which he expects a just
return, include education/training, skills, creativity,
seniority, age, personality traits, effort expended,
and personal appearance.
On the outcome side the organization provides
such things as pay/bonuses, fringe benefits,
challenging assignments, job security, promotions,
status symbols, recognition, and participation in
important decisions.

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Negative and Positive Inequity

Negative inequity
Comparison in which another person receives
greater outcomes for similar inputs.

Positive inequity
Comparison in which another person receives
lesser outcomes for similar inputs.

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Negative and Positive Inequity

Figure 7-1

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Thresholds of Equity and Inequity

Equity sensitivity
reflects an
individuals
different
preferences for,
tolerances for, and
reactions to the
level of equity
associated with any
given situation
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Thresholds of Equity and Inequity

Benevolents
people who have a higher tolerance for negative
inequity prefer their outcome/input ratio to be lower
than ratios from comparison others

Sensitives
adhere to a strict norm of reciprocity and are quickly
motivated to resolve both negative and positive inequity

Entitleds
have no tolerance for negative inequity
expect to obtain greater output/input ratios than
comparison others and become upset when this is not
the case.
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Organizational Justice
Distributive justice
The perceived fairness of how resources and
rewards are distributed.

Procedural justice
The perceived fairness of the process and
procedures used to make allocation decisions.

Interactional justice
quality of the interpersonal treatment people
receive when procedures are implemented.

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Practical Lessons from Equity

Theory
No matter how fair management thinks the
organizations policies, procedures, and reward
system are, each employees perception of the
equity of those factors is what counts.
Managers benefit by allowing employees to
participate in making decisions about important
work outcomes
Employees should be given the opportunity to
appeal decisions that affect their welfare.
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Practical Lessons from Equity

Theory
Managers can promote cooperation and
teamwork among group members by
treating them equitably
Employees perceptions of justice are
strongly influenced by the leadership
behavior exhibited by their managers
Managers need to pay attention to the
organizations climate for justice.
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Expectancy Theory of Motivation

Expectancy
theory
Holds that people
are motivated to
behave in ways that
produce valued
outcomes.

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Vrooms Expectancy Theory

Motivation boils down to the decision of how
much effort to exert in a specific task
situation.
Expectancy
represents an individuals belief that a particular
degree of effort will be followed by a particular
level of performance.

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Expectancy
The following factors influence an
employees expectancy perceptions:

Self-esteem.
Self-efficacy.
Previous success at the task.
Help received from others.
Information necessary to complete the task.
Good materials and equipment to work with

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Vrooms Expectancy Theory

Instrumentality

- A performance outcome perception

Valence - the positive or negative value people place on outcomes

Outcomes - different consequences that are contingent on perf
E-to-P
Expectancy

P-to-O
Instrumentality

Outcomes
& Valences

Outcome 1
+ or -

Effort

Performance

Outcome 2
+ or -

Outcome 3
+ or -

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Managerial and Organizational

Implications of Expectancy Theory

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Managerial and Organizational

Implications of Expectancy Theory
Some workers value interesting work and
recognition more than money
Extrinsic rewards can lose their motivating
properties over time and may undermine
intrinsic motivation

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Goals: Definition and Background

Goal
what an individual is trying to accomplish
object or aim of an action

Management by objectives
management system incorporating participation
in decision making, goal setting, and feedback

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How Does Goal Setting Work

Goals direct attention
Goals regulate effort
Goals increase persistence
Goals foster the development and
application of task strategies and action
plans

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Insights from Goal-Setting

Research
1. Specific high goals lead to greater
performance
Goal specificity quantifiability of a goal

2. Feedback enhances the effect of specific,

difficult goals
3. Participative goals, assigned goals, and
self-set goals are equally effective.

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Insights from Goal-Setting

Research
4. Action planning facilitates goal
accomplishment.
Action plan outlines the activities or tasks that
need to be accomplished in order to obtain a
goal.

5. Goal commitment and monetary incentives

affect goal-setting outcomes
Goal commitment extent to which an
individual is personally committed to achieving
a goal
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Practical Application of
Goal Setting
Step 1: Set goals
Use time and motion studies, average past
performance, benchmarking
Should be SMART

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Practical Application of
Goal Setting
Two additional recommendations:
1. For complex tasks, managers should train
employees in problem-solving techniques
and encourage them to develop a
performance action plan
2. Because of individual differences, it may be
necessary to establish different goals for
employees performing the same job.
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Guidelines for Writing

SMART Goals

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Practical Application of
Goal Setting
Step 2: Promote goal commitment
Involve employees in the goal setting and
action planning process
Have managers explain the rationale behind
higher level goals

Step 3: Provide support and feedback

ensure that each employee has the necessary
abilities, training, technology/equipment, and
information needed to achieve his or her goals
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