Creator1

In organizational management, there are various theories about what motivates employees, one such theory is the ‘equity theory’. The theory posits that people, specifically employees, are primarily motivated by fairness. A simplified explanation of the theory suggests that motivation can be achieved by comparing the inputs and outcomes to others. For example, comparing the effort or skillset as an input and pay, bonuses, promotions, recognition being the outcomes of those skills. It further argues that people will perceive inequity if it’s not addressed and that will result in reduced efficiency, more frequent attrition for staff, and other negative outcomes. While, perceived inequity can be harmful, and can effect the overall moral and outcomes of the output, I do think it is inaccurate that ‘fairness’ is the measure of success for motivated employees. There are several issues as I see it to the actual implementation of this theory, the first issue is defining ‘fairness’. There are over 180 countries on Earth, and each one of them has a slightly (sometimes very) different idea of what ‘fairness’ means. This means that individuals who come from different backgrounds, upbringings, will also carry these strong ideas and beliefs. This lack of definition leads to other problems, such as the measure of ‘fairness’ is completely subjective. Determination of what is a useful input and a desired output is subjective, unless defined and agreed upon across an entire organization. This subjectiveness can lead to misunderstandings, conflicts, and ironically, a perceived unfairness.

Equity Theory really only focuses on inputs and outputs rather than on procedures. If we apply this to promotions we can see easily how focusing on distributive outcomes may leave employees feeling disgruntled. If the staff knows that there are promotions happening and suddenly two staff members are chosen for promotion. There is no discussion or announcement about this promotion, just two employees were picked for promotion due to ‘their performance this year.’ Employees see the outcome based approach as opaque and dishonest. It gives the appearance that the promotions involved a level of favoritism or politics.

A procedural based approach would rather have a structured review process that has goals and expectations outlined, documented decision making processes, communication for reasoning of selection for promotion and advancement.  While this may still have a very similar outcome, the same employees may receive the promotion, it shows transparency in the process. Employees can see the process for promotions and trust it. Although, drawbacks to this may include the time it takes to conduct these reviews, and their complete effectiveness.