4. Expectancy Theory

Expectancy Theory OverviewThe Expectancy Theory of Motivation is one of the process theories. It provides an explanation of why individuals choose one behavioral option over others. "The basic idea behind the theory is that people will be motivated because they believe that their decision will lead to their desired outcome" (Redmond, 2009). "Expectancy theory proposes that work motivation is dependent upon the perceived association between performance and outcomes and individuals modify their behavior based on their calculation of anticipated outcomes" (Chen & Fang, 2008). This has a practical and positive benefit of improving motivation because it can, and has, helped leaders create motivational programs in the workplace. "This theory is built upon the idea that motivation comes from a person believing they will get what they want in the form of performance or rewards. Although the theory is not "all inclusive" of individual motivation factors, it provides leaders with a foundation on which to build a better understanding of ways to motivate subordinates" (AETC, 2008). Expectancy theory is classified as a process theory of motivation because it emphasizes individual perceptions of the environment, and subsequent interactions arising as a consequence of personal expectations.

The theory states that individuals have different sets of goals and can be motivated if they believe that:

• There is a positive correlation between efforts and performance.• Favorable performance will result in a desirable reward.• The reward will satisfy an important need.

The desire to satisfy the need is strong enough to make the effort worthwhile (Lawler, Porter. L., Vroom, 2009).

Tolman's Behavior and Motivation Theory

Edward Tolman was a cognitive behavioral psychologist who studied motivation and learning. He was born in Newton Massachusetts in 1886. He was introduced to Gestalt psychology while studying in Germany. Tolman used rats for his experiments on learning. One of these experiments led to the theory of latent learning. This theory describes learning with no obvious reward for the learner. Tolman also began to develop the theory of behavior and motivation. He theorized that a motive drives a person’s to behave a certain way until some intrinsic need is met. Until the need is met the person will continue to behave in the same manner. This was the start of the motivation theories. Vroom would add to Tolman’s work with the Expectancy theory later in history (VanderZwaag, 1998).

Vroom's Expectancy Theory

Victor H. Vroom, Professor, Yale University

The expectancy theory of motivation was suggested by Victor H. Vroom, an international expert on leadership and decision making. He was named to the original board of officers of the Yale School of Management when it was founded in 1976. Vroom has focused much of his research on dealing with motivation and leadership within an organization. One of the most influential books on the subject of motivation was written by Vroom in 1964, called Work and Motivation. He has served as a consultant to a number of government agencies, as well as more than 100 major corporations worldwide, including General Electric and American Express. He is currently a professor in the Yale School of Management at Yale University.

Vroom's Expectancy Theory addresses motivation and management. The theory suggests that an individual's perceived view of an outcome will determine the level of motivation. It assumes that the choices being made are to maximize pleasure and minimize pain, as also seen in the Law of Effect, "one of the principles of reinforcement theory which states that people engage in behaviors that have pleasant outcomes and avoid behaviors that have unpleasant outcomes" (Thorndike, 1913). He suggests that prior belief of the relationship between people's work and their goal as a simple correlation is incorrect. Individual factors including skills, knowledge, experience, personality and abilities can all have an impact on an employee's performance.

Vroom theorized that the source of motivation in Expectancy Theory is a "multiplicative function of valence, instrumentality and expectancy." (Stecher & Rosse, 2007) He suggested that "people consciously chose a particular course of action, based upon perceptions, attitudes, and beliefs as a consequence of their desires to enhance pleasure and avoid pain" (Vroom, 1964).

Vroom's Expectancy Theory is based on these three components:

• Expectancy:Expectancy can be described as the belief that higher or increased effort will yield better performance. This can be explained by the thinking of "If I work harder, I will make something better".Conditions that enhance expectancy include having the correct resources available, having the required skill set for the job at hand, and having the necessary support to get the job done correctly.

• Instrumentality:Instrumentality can be described as the thought that if an individual performs well, then a valued outcome will come to that individual. Some things that help instrumentality are having a clear understanding of the relationship between performance and the outcomes, having trust and respect for people who make the decisions on who gets what reward, and seeing transparency in the process of who gets what reward.

• Valence:Valence means "value" and refers to beliefs about outcome desirability (Redmond, 2010). There are individual differences in the level of value associated with any specific outcome. For instance, a bonus may not increase motivation for an employee who is motivated by

formal recognition or by increased status such as promotion. Valence can be thought of as the pressure or importance that a person puts on an expected outcome.

Vroom concludes that the force of motivation in an employee can be calculated using the formula: Motivation = Valence*Expectancy*Instrumentality

Scaffolding upon some of Vroom's original work, Porter and Lawler developed a theoretical model suggesting that the expenditure or an individual's energy or efforts will be determined by the level of expectations that a specific outcome may be obtained and the degree to which that outcome is valued by someone (Pinder, 1984). This theory became known as expectancy theory, or VIE theory (valence, instrumentality, and expectancy). The following information is concerned with exploring the components of expectancy theory, analyzing the research dedicated to the theory, identifying strengths and weaknesses, and discussing the factors that explain motivational behavior in the workplace. It will be examined to demonstrate the application of expectancy theory in practical terms. Each of these elements will be instrumental in better understanding one of the more popular theories for explaining and influencing motivational behavior, particularly in the workplace.

Vroom also believed that increased effort will lead to increased performance, given the person has the right tools to get the job done. The expected outcome is dependent upon whether or not the person has the right resources to get the job done, have the right skills to do the task at hand, and they MUST have the support to get the job done. That support may come from the boss, or just being given the right information or tools to finish the job.

Although many people correlate high performance with high rewards, many times the theory is limited because rewards are not always directly correlated with performance in many organizations. It is related to other parameters also such as position, effort, responsibility, education, etc

It is important to remember that there is a difference between incentives and motivators. Incentives are non-material objects. They are manipulated by managers and leaders to get employees to do desired tasks. Incentives may work, if the incentive is something the employee desires to work

towards. But, if the incentive is taken away, the behavior may not sustain. Motivation theories need to accentuate motivation and not incentives for this reason Motivation implies that people make decisions about their own behavior and what motivates them

The locus of control is different for incentives and motivation. Motivation is intrinsic control where incentives are extrinsically controlled by people in the organization(Mathibe, 2011).

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Expectancy Theory Components

As previously described; Expectancy Theory has three major components:

1. Expectancy2. Instrumentality3. Valence

These components work together to establish our Motivation force (MF). The diagram below shows the elements involved in each component of MF; while the second diagram illustrates the relationship of each component.

Diagram 1

(Scholl, 2002)

Diagram 2

(Swenson, date unknown)

Expectancy (E→P)

"The relationship between Effort and Performance is known as the E-P linkage" (Isaac, 2001). "The expectancy component of expectancy theory is the belief that one's effort (E), will give the expected performance (P) goal" (Scholl, 2002). Expectancy is slated as the first component of the VIE theory; illustrating that in order for a person to be effectively motivated, that individual needs to perceive that their personal expenditure of effort will result in an acceptable level of performance. The concept of perception is very important throughout this theory, as it concludes that in order for a person to be motivated into putting effort towards a task, they need only to believe that their effort will result in a certain level of performance, or that a certain level of performance is attainable. An example would be, "If I salt the sidewalk, will it be safer to walk on?" There are variables that affect an individual's expectancy perception. These variables include self-efficacy (a person's belief in their ability to perform successfully), goal difficulty (how attainable is this goal), and control (does the person actually have control over the expected outcome).

Because VIE Theory involves perceptions, and expectancy is a belief about the future rather than a concrete existence in the environment, peoples’ beliefs can vary greatly (Redmond, 2010). This means that while one person perceives their efforts to lead to a great accomplishment, another person may believe their same effort will not lead to much accomplishment at all. This difference in perceptions is due to many factors. Two factors that can affect expectancy are ability and interest (Redmond, 2010). "Lack of ability or interest will decrease a person’s expectancy. With proper training and a high interest level, people will have an increased level of expectancy. Employers, for example, need to keep this in mind as they create ideas to motivate their employees. By encouraging employees and building self-efficacy, managers can increase employee expectancy" (Redmond, 2010).

A key question to ask to determine expectancy is:

What is the strength of the relationship between the effort I put forth and how well I perform?

Additional examples of determinations of expectancy include (Scholl, 2002):

• If I spend most of tonight studying, will it improve my grade on tomorrow's math exam?• If I work harder than everyone else in the plant, will I produce more?• If I practice my foul shot more, will my foul shooting improve in the game?• If I make more sales calls, will I make any more sales?

The following video gives great insight in its presentation of the Expectancy Theory.

to watch a presentation on Expectancy Theory

Instrumentality (P→O)

The second component in the Expectancy Theory equation is Instrumentality. Instrumentality is the perception that a given performance level is related to a given outcome. In other words, a person's belief that a given output will facilitate a given reward (outcome). A person will only perform at a certain level if they believe that the performance will lead to a given expressed outcome. The relationship is represented by the P-O linkage (Isaac, 2001). The instrumentality component of expectancy theory is the person's belief that if they can meet performance expectations, they will receive "a great reward" (Scholl, 2002). An example of instrumentality of expectancy theory would be, "If I complete more work than anyone else, will I get a promotion before they do?" The variables affecting instrumentality are trust (in leaders), control, and policies (how formalized are rewards systems in written policies?) (Scholl, 2002).

Something is considered to be instrumental if it is conditional upon something else, or is believed to directly result into a particular outcome (Redmond, 2010). Remembering the influential element of perceptions and beliefs, what people believe to be an outcome may not be the actual outcome resulting from their performance. "If people do not see a connection between their performance level and a possible outcome, they are less likely to be motivated" (Redmond, 2010).

A key question to ask to determine instrumentality is:

What is the strength of the relationship between the things I do and the rewards I get from my actions?

Examples of determinations of instrumentality (Scholl, 2002):

• If I get a better grade on tomorrow's math test will I get an "A" in math?• If I produce more than anyone else in the plant, will I get a bigger raise? A faster

promotion?• If my foul shooting improves will I have a shot a team MVP?• If I make more sales will I get a bonus? A greater commission?• If I make more sales will I believe that I am the best sales person or be recognized by

others as the best sales person?

Valence V(R)

Valence is the final component of VIE theory. Valence is characterized by the extent to which a person values a given outcome or reward. It is important to note that valence is not the actual level of satisfaction that an individual receives from an outcome, but rather it is the EXPECTED satisfaction a person receives from a particular outcome (Redmond, 2010). This “value” is based in individual differences. The value a person places on an expected outcome or reward is directly related to who they are; their needs, goals, and values/preferences. This subjective value is based on the individual's perceptions, attitudes, and beliefs. "The level at which an individual values an outcome is described as it's valence" (Gerhart, Minkoff, Olsen, 1995).

A key question to ask to determine valence is:

How valuable do I perceive the potential reward(s) to be?

Examples of determinations of valence (Scholl, 2002):

• How much I really want an "A" in math?• Do I want a bigger raise? Is it worth the extra effort? Do I want a promotion?• How important is it to me to be team MVP?• Do I need a sales bonus? Is the extra time I spend making extra sales calls worth the extra

commission?• Is it important to me that I am the best salesperson?

Motivational Force

When expectancy, instrumentality and valence are met, a “motivational force” occurs. This force exerts internal pressure on an individual to be motivated. The larger the force, the more a person will be motivated to obtain the outcomes of the job (Redmond, 2010). In order for motivational force to be high, valence, instrumentality and expectancy must also be high. If any one of those is low, motivation will be low (Redmond, 2009).

For example, "if a person is indifferent to the outcomes or perceives them as negatively valent, there is no reason to work hard to attain them " (Redmond, 2010). Therefore, since valence is negative or low, then motivation will also be negative or low. For each action, expectancy, instrumentality and valence can be assessed and a motivational force computed (Redmond, 2010).

Expectancy theory or "VIE theory" is based on the premise that motivation occurs when three specific conditions are satisfied: effort, performance and outcome. Think of motivation as a chain where each link represents a condition, and the intersection of each link represent its components: expectancy, instrumentality, and valence. Within the chain, a person expects their effort to result in some level of performance (expectancy). The perceived or expected outcome of their performance level will be considered instrumental to the outcome (instrumentality). Finally, a person will place subjective value on their belief about the outcome (valence). This value will determine how satisfactory the outcome is to them.

Among the many factors that influence expectancy, such as ability or interest, perception is perhaps the most significant factor. Perception is the engine that drives the belief of effort, performance and outcome. Thus, if any one condition is perceived that it will be low, motivation will be low - just as the bond between links affects the chain. Because beliefs can vary, however; a subjective probability formula that is multiplicative in nature is used to more accurately measure expectancy and arrive at a predicted motivational force (represented as a number). The higher the number, the higher the motivation, with each component having its own probability range.

VIE Formula

The VIE formula is represented (within a range) as MF = E(V x I) [3]

The range is represented in Table 1 below:

Table 1: VIE Ranges

Component Range Range Definition

Expectancy 0 to 1 0 = belief she could not perform successfully 1 = firm belief she could perform successfully

Instrumentality 0 to 1 0 = no relationship between performance and outcome 1 = outcome dependent on performance

Valence -1 to +1 - = avoidance of outcome 0 = indifference + = expected outcome would be satisfactory

A motivated employee is thus the product of the perceived level of satisfaction, the confidence to achieve, and the rewards that the employee hopes to receive on achieving the set goals. In other words, valence * expectancy * instrumentality = motivation (Iyer, 2009).

Expectancy is a person's strength of conviction in regards to the ability to attain goals. People who desire the rewards that management is expected to bestow upon them, on account of superior performance, should have strong convictions regarding their ability to deliver. An employee who is not positively oriented with respect to the perceived consequences of the attainment of goals, will have a zero valence. Employees should feel that the efforts that he/she would like to put into work would yield the desired results. It is ultimately a question of how confident one feels about oneself. A self-proclaimed achiever may be immensely confident of the ability to perform astoundingly high, while a skeptic may have an entirely different perspective. An employee who feels that the efforts will not yield the desired results, in terms of achieving the set targets, will have a low probability of expectancy. Probability of an event can assume values between 0 and 1. How well an employee scores on this scale of confidence will have a direct bearing on the employee's level of motivation (Iyer, 2009).

*Motivational Force (MF)= Expectancy x Instrumentality x Valance

When deciding among behavioral options, individuals select the option with the greatest motivational forces (MF).In terms of the above Motivational Force equation, when anyone of these products are zero then the whole equations becomes zero. If a person does not have one of the three products, then overall motivation is lacking.

To conclude this section, let's consider the following example which highlights the understanding that thought process towards motivation is based on individual factors, and perceptions:

Example 1

Sales Department Example Let's consider one initiative to motivate staff, the offer of promotion within a sales department if certain sales targets are met. For one member of staff this is highly attractive (Valence = + 0.9), but due to their portfolio of clients, and unsuccessful past sales performance, they perceive achievement of the outcome, e.g. the sales target, almost impossible (Expectancy = 0.1). By applying the formula we see that the motivational force will be : F = V x E F = 0.9 x 0.1 = 0.09 Alternatively, another member of staff finds the possibility of promotion reasonably attractive (Valence = + 0.6), and based on their portfolio of clients, and successful past sales performance, they feel reasonably confident that they will achieve the sales target set (Expectancy = 0.8). Here we see that the motivational force is far stronger in comparison: F = V x E F = 0.6 x 0.8 = 0.48

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Research on Expectancy Theory"Since it is a popular motivational theory in I/O Psychology, many studies have been conducted in the United States, as well as other countries" (Matsui & Terai, 1975), to test the efficacy of the expectancy theory using between-subjects design and within-subjects design. In between-subjects design studies, groups of people are asked questions about their expectancies, instrumentalities and valences with a motivational force score computed for each person. The motivational force score is combined with performance ratings given by supervisors for a total force score. "This type of study distinguishes between the most motivated, and the least motivated employees" (Redmond, 2009).

Within-subjects design, by contrast, studies how one individual is motivated by different tasks. In this study, a person is given different tasks and is provided a force score for each to determine

which task the person is more highly motivated in. Because Vroom developed the expectancy theory to account for varying motivation across tasks, the within-subjects design studies are considered better suited for testing the theory (Redmond, 2009). For each person, a correlation is computed between predictions of effort made by the theory and actual amounts of effort expended on tasks (Redmond, 2009).

From the research that has been conducted to test the theory, overall results suggest that the theory can be useful as a predictor of the choices people will make when given different tasks, and remains a popular theory in the workplace. The strongest support in favor of this research was shown for valence, instrumentality, and expectancy as individual components, which showed higher correlations and predictions resulting for within-subject design studies, rather than the motivational force score or the total force score (Redmond, 2009).

Jay Caulfield, from Marquette University, used expectancy theory as a framework for his research study. This study was to investigate the motivational factors that may contribute to students providing anonymous feedback to teachers. “Expectancy theory has been more effective in predicting motivation when the subject being studied had more discretion in performing a task” (Caulfield, 2007). Since the evaluation process is completely anonymous, it makes sense that expectancy theory is a good choice for predicting student’s motivation for filling out the evaluations in the first place. The purpose of using Vroom’s expectancy theory now, was to determine the outcome the students believed would be attained by providing these evaluations (Caulfield, 2007). The results of the study indicated that “students’ motivation was dependent upon the importance to them of improving the value of the class and of future classes, and the expectation that their formative feedback would lead to increased value for them, their peers in the classroom and for students in future classes” (Caulfield, 2007). The findings conclude that it is important that the teachers stress that the evaluations are very important tools for improving the learning and teaching experiences in the present, and the future.

Another research example involves business students nearing their masters’ degree certifications at Carnegie-Mellon University. The purpose of the study was to predict the appeal of potential employers using a questionnaire to evaluate which goals people believed to be most important. Goals included “chance to benefit society, freedom from supervision, and high salary”. After establishing the rank of individual goal preferences, the individuals evaluated three companies of interest to determine the degree to which each student believed they would be able to satisfy his or her goals. After combining these two variables, an instrumentality-goal index was calculated for each company and was given an attractiveness rating. The results of the study noticeably indicate that companies seen as providing a means towards attaining important goals were most attractive. This study showed that 76 percent of students chose the company that had the highest instrumentality score. This study exemplifies how Vroom’s research results are consistent with his theory. Years later, after following the actual employment, similar supporting evidence was also found (Miner, 2005).

Another research study in expectancy tested the hypotheses that the behavior of some individuals are determined by personal expectancies while the behavior of other individuals are determined by social norms. The researchers took two groups of people and gave one group personal expectations about their behavior. The other group was given information on what the social norms were for the

time being. The researchers found that strong expectancy behavior correspondence was given for those individuals who were aware of personal expectancies but who were not knowledgeable about social norms. For those individuals who were attuned to social norms, their behavior corresponded with such (Miller & Grush, 1988).

During 2009 another research study was conducted by Richard Johnson at the University of Toledo’s Criminal Justice Department in order to explain patrol officer drug arrest activity and find ways to influence work output. (Johnson, 2009) The researcher developed four hypothesis based on the expectancy, instrumentality, valence, and overall motivation described in the Expectancy Theory. The first hypothesis was officers will make more drug arrests if they are given direct expectations to do so. Second, officers who have the proper capabilities through sufficient training and equipment will make more arrests. Thirdly, officers who have the opportunity by way of their shift or time between calls will make more arrests. And finally, officers who perceive that their department and supervisors will provide more rewards if they make more drug arrests will more likely be more productive. (Johnson, 2009) The data was collected through self reporting surveys with various response rates. The dependent variable in the study was the individual drug arrest rate of each respondent. The independent variables were drawn from and grouped based on the results of the survey. They included, management priority for expectancy, having adequate equipment for capability, opportunities, and for valence either rewarded or not rewarded because of the variety of what an officer perceives as a reward. (Johnson, 2009) The data was input into a correlational analysis with varying results. There was a significant effect between management’s expectations and the number of drug arrests. Under capability, there was significant effect between perceptions of being properly equipped and arrests but the correlation was negative and therefore unexpected. Opportunity did show a significant effect as well but the single greatest predictor of drug arrest rate related to the rewards perceived to be available. (Johnson, 2009) The overall purpose of the study was to explain the variation in arrest rate between officers by relying on evaluating organizational factors. The results seem to indicate that each part of the Expectancy Theory plays a role, but the overall best predictor was the end rewards or valence of the overall expectancy.

Expectancy theory has been researched and studied in various ways. According to the Oxford handbook of motivation, expectancy theory is “more often used as an organizing framework for generating and testing context-specific hypotheses. For example, researchers have applied expectancy theory to guide the development of models to explain Work Motivation 4 variations in DUI arrests among police officers (Mastrofski, Ritti, Snipes, 1994), efforts by middle managers to champion issues for senior executives to pursue (Ashford, Rothbard, Piderit, Dutton, 1998), home runs hit by major league baseball players (Harder, 1991), and strategic decisions in competitive markets (Chen & Miller, 1994)” (Grant & Shin, 2011).

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Strengths and Weaknesses of Expectancy Theory

Strengths

When using the expectancy theory within organizations/institutions, an evaluation can be made in regard to two factors that lead to valence (the reward): the expectations of the individual and the belief that their actions will lead to the reward. To utilize the expectancy theory accurately, the within-subject research method is used to evaluate the motivations of the employee. This method of the expectancy theory calculates the difference in motivational levels between tasks of one individual, and that of another.

To use within-subject designs, participants are given many different tasks to complete. For each task the researcher computes a force score. This score is used to predict the choices that individuals make among the different tasks. Using these predictions of effort, researchers compute correlations based on the predictions and the actual amount of effort exerted by individuals (Redmond, 2010). The strength of the within-subject designs reflects the fact that Vroom developed the VIE theory to determine different motivational levels across various tasks performed by an individual, rather than looking at differences in motivation between different subjects(Redmond, 2010). Validity studies show that the average validity coefficients for within-subjects designs ranges in the .50’s and .60’s (Redmond, 2010).

Expectations are influenced by incentives and rewards. With proper goals set, this will trigger a motivational process that improves performance. According to Vroom (1995), a person’s motivational force can be equated to the level of expectancy multiplied by the instrumentality multiplied by the valance. If any one of these factors is scored as a zero, then the motivational score will also be zero (Penn State World Campus, 2011). This can easily be seen in situations where a person believes the amount of effort exerted on a task will not result in the desired reward, in cases where the level of performance will not yield the desired results or that the reward will not have the desired value as expected, the individual’s motivational level will be zero (Penn State World Campus, 2011). On the other hand, when all the components of the equation are high, the motivational force will also be high (Penn State World Campus, 2011).

By utilizing expectancy theory, organizations are able to understand the importance of demonstrating appreciation for their employees' work, and as a result, their employees will perform stronger, and show more loyalty towards the organization.

Weaknesses

A major weakness of expectancy theory is using between-subjects designs. Because VIE theory was developed to account for differences within the individual and not across different subjects, looking at these differences does not give valid results. Validation studies have shown that between-subjects designs result in lower prediction validities. The average validity coefficients for between-subjects designs ranges in the .30’s and .40’s (Redmond, 2010). This is clearly lower than validity coefficients for within-subjects designs.

The weaknesses of between-subject design can be seen in the differences each person places on the effort, performance and value of rewards. Because this design is quantitative, the comparisons between individuals are hard to measure. Another weakness can be seen in the organizational

applications of the theory. In some company’s the rewards some employees receive might not be seen as attractive as many people change their idea of a desired reward. What may have been a good incentive at one point in time, may no longer hold its value to that individual anymore ( Penn State World Campus, 2011).

Expectancy theory, by nature, only focuses on the extrinsic motivational factors and the conscious decisions employees make about their performance. Many employees and leaders are not motivated solely by extrinsic factors, such as a paycheck, bonus, or public recognition. As a result, "the concept of instrumentality is found to be ambiguous and difficult to operationalize" (Wabba & House, 1974). Therefore, it is critical for managers and leaders in an organization to really understand what motivates their employees before attempting to utilize the expectancy theory model. The model might best be used in conjunction with other models of motivation, such as the Hierarchy of Needs and Reinforcement Theory, in order to ensure leaders are able to effectively motivate their employees to achieve a higher level of performance. During situations like these, managers may change the type of rewards to ensure they continue to fit the motivational needs required to obtain the desired behavior.

Empirical research studies have been conducted that demonstrate that expectancy theory "ignores the rationality assumptions underlying this choice behavior" (Wabba & House, 1974). The assumptions that are made within this theory show that individuals' motivations are consciously chosen. The concept of this assumption is that people contemplate their actions to achieve the rewards, or in other words, it assumes that people consciously know what rewards are in their own best interest. It is also assumed that the contemplation is designed to capitalize on rewards and evade losses. Along these lines, an argument can be made that many individuals might demand a reward system that is based on a short-term time horizon, while forgoing a long-term reward system, even though the long-term system might deliver more valence. Due to the fact that not all motivations are derived consciously, this theory cannot apply to all individuals.

Another potential weakness of the expectancy theory is that it assumes all necessities are in place, which is not always the case. Employees need to have the ability, the resources and the opportunity to perform their job well. An example of this would be the role genetics can play as a biological limiting factor of performance (Walker, 2003). Just as an athlete might lack the genetic potential to perform at an income producing level, so to an employee might lack the genetics required to reach a desired level of performance. In this case, knowing what will motivate the employee may not help since the scarcity of available resources makes it difficult to complete their job. The upside of this weakness is it will illuminate areas the employers may need to revisit and make decisions regarding the resources available and/or the employees performing the tasks.

The expectancy theory “falls short of explaining how employees update and change their beliefs over time (Mitchell & Biglan, 1971). For example, valence beliefs can change as employees realize that their actual satisfaction with an outcome is different (e.g., lower or higher) than the satisfaction that they anticipated (e.g., Wilson & Gilbert, 2005)” (Grant & Shin, 2011). When employers are utilizing the theory in the workplace being cognizant of the fact that peoples needs and wants change allows them the opportunity to reevaluate the effectiveness periodically. ______________________________________________________________________________

Application of Expectancy Theory in the WorkplaceOrganizational Applications: Expectancy

A leaders' ability to understand expectancy as related to the E-P linkage can be extremely useful in the workplace. There are five distinct components for a leader to keep in mind concerning this linkage. First, a leader needs to present a reasonably challenging assignment to the employee. It has been shown that unchallenging work leads to boredom, frustration and marginal performance. Challenging work allows for self-confidence, education, ability development, training, skills and experience, among other things. Second, a leader must consider the follower's ability. Because people differ on experience, knowledge, training, skill, educational level and so forth, tasks need to be assigned based on the individual's level of competence. If an individual feels they are not capable to complete the tasks assigned, the E-P linkage will be weak. A competent leader needs to provide the necessary skills to the individual in order for them to be successful. Third, leaders must recognize that followers differ greatly regarding their levels of self-esteem in regards to completing a task. Confidence will play a significant role in the follower’s ability to perceive their effort as capable of reaching a desired performance output. Fourth, a leader needs to determine and specify which outcomes constitute acceptable performance, and which do not. The outcomes need to be communicated clearly with precised goals that need to be accomplished. Both the follower and the leader need to reach a mutual agreement on the behavior that represents a successful outcome for each of them. Concrete levels of performance allow the follower an accurate assessment of the strength associated with the E-P linkage. Fifth, a leader should recognize that expenditure of effort for many followers leads to satisfaction on the job (Brown & Peterson, 1994). Most individuals want to feel useful, competent, involved and productive. The workplace provides a vehicle to fulfill these needs. A leader that is aware of these distinct aspects of human perceptions, as they relate to expectancy, can effectively understand and facilitate the E-P linkage for each of their employees (Isaac, 2001). Managing these elements effectively allows a leader to strengthen the expectancy of each of their followers.

Organizational Applications: Instrumentality

The strength performance output (instrumentality) linkage will be contingent upon three beliefs of the follower. First, a follower needs to be able to trust that a leader will be able to deliver the outcome promised. It is the outcome (given that the outcome is valued by the individual) that drives the motivational state according to the expectancy theory. A followers ability to trust that a leader can and will follow through with an outcome greatly effects the P-O linkage. Instrumentality is rooted in the belief that the performance rendered will result in the outcome promised. Second, leaders need to make sure followers receive fair treatment in a predictable manner. This is not to suggest that people should be treated exactly the same. As we know from this theory, people vary based on individual differences. However, this factor does suggest that treatment needs to be considered fair. The outcome of treatment a follower receives from a specific performance needs to be consistently applied. A follower should come to understand that a particular action is associated with a particular type of treatment. This understanding reinforces

the P-O linkage (Isaac, 2001). A leader’s ability to manage the behavior associated with these beliefs will determine how his workers perceive Instrumentality.

Organizational Applications: Valence

With valence, there are two issues a leader should concern himself with. First, the attractiveness or value of outcomes differs amongst individuals. A leader needs to be able to identify the value of each outcome from the perspective of the follower. There are several types of rewards that can induce heightened motivational states for individuals. These rewards range from money, to praise, to appreciation, to time off, and so on. Many motivational outcomes are of little or no cost to a company, and these types of rewards become highly valuable motivational tools (Gerhart, Minkoff, Olsen, 1995). Once a valuable outcome is identified, the motivational force equation can be established. Second, leaders must put a lot of effort into the alignment of the followers’ personal goals and those of the organization. It is extremely important that the goals of the individual worker are assimilated into the goals of the organization. The pairing of these goals is crucial to workplace motivation. If the follower perceives that their goals are congruent with the goals of the organization, the follower's motivational force associated with receiving outcomes of high valence are aligned with the furthering of organizational interests. A leader’s ability to do this will greatly enhance both their understanding of valence, as it pertains to individual followers, as well as give them the ability to use this understanding to motivate workers on the job.

Knowing what factors motivate employees can have positive implications for businesses. Some of these include reduced employee turnover, improved morale and higher productivity. The expectancy theory suggests, however, that people are motivated by different things. Some people

are motivated by external rewards, such as a paycheck, paid vacation, or a great benefits package, while others may have more intrinsic motivators, such as recognition, or a sense of belonging. A few simple ways to discover what motivates an individual would be to either ask them directly, or through a less confrontational method of administering a questionnaire, or survey. When the questionnaire method is selected, it can be administered to all company employees and can better facilitate isolating certain variables within the company overall. These isolated variables will bring about improved desired outcomes, such as improved morale and higher productivity. One example of this may include certain external rewards, such as an increase in pay, or some type of monetary bonus. Some other examples might include: providing specialized training for an employee who feels they are lacking the ability and confidence to complete a function in a satisfactory manner, or acquiring a piece of equipment that would improve the efficiency of the employees production. By isolating selected variables, a reward system can be more effectively designed, and can make it possible to determine whether or not the rewards implemented are effecting positive change. The comprehensive reward system should include several different types of rewards so individuals at all levels of the organization with differing motivational drives can strive towards something they perceive as valuable while the organization is continuing to meet its goals and progress.

Utilizing the VIE formula will also allow leaders to set motivating objectives for employees (e.g., a high achiever might not be motivated to work hard if the work he/she is performing is mundane. Giving the person harder work, or additional responsibilities might motivate him/her to achieve a higher level of performance). The company will be better off, as more and more employees are motivated to achieve a higher level of performance.

Additionally, the workplace can involve more participants than company and employee alone. Labor unions are sometimes considered participants, and can also play an important role in the workplace. Many of such unions have looked into forms of expectancy and expectancy-value theory to build and understand their membership. Much like a company wants to learn what motivates their employees (whether it be intrinsic or extrinsic factors), unions want to know what draws workers to join unions or to vote them out (decertify). Over time, workers ideas of unions change, based on different situations and adjustments in work environment. Unions can benefit from understanding what drives these changes, and can learn how to make adjustments to the workers perceptions and expectations of unions. If a worker perceives that joining a union will be of low cost to them (low effort), then the worker might decide that they have the means to join. For instance, if a union is already in place (instrumentality), and what the union offers in pay and/or benefits is perceived as valuable (valence), the worker will be more motivated to join or remain a member of a union (Barling, Fullagar, Kelloway, 1992).

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Harder, J. W. (1991). Equity theory versus expectancy theory: The case of major league baseball free agents. Journal of Applied Psychology, 76, 458-464.

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https://courses.worldcampus.psu.edu/fa11/psych484/001/content/lesson04/lesson04_01.html

5. Equity Theory

Equity Theory Overview

This theory proposes that a person's motivation is based on what he or she considers to be fair when compared to others (Redmond, 2010). As noted by Gogia (2010), when applied to the workplace Equity Theory which focuses on an employee's work-compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result. Because Equity Theory deals with social relationships and fairness/unfairness, it is also known as The Social Comparisons Theory or Inequity Theory (Gogia, 2010).

Equity theory of motivation, developed in the early 1960’s by J. Stacey Adams, recognizes that motivation can be affected through an individual's perception of fair treatment in social exchanges. When compared to other people, individuals want to be compensated fairly for their contributions.

Three terms are important in this theory:

("Motivation theories," 2009)

Comparison Other Inputs Outcomes

Can be a co-worker, yourself in

past experiences, or an ideal. The

comparison other is not specified by

the theory. The individual chooses

who to compare themselves to.

Experience, effort, a skill,

education. Anything contributed

to your work.

Money, benefits, flexibility, autonomy,

responsibility, promotions

Other Equity Theory Key Terms

Input: Anything of value that a person brings to a job. For instance- experience, education, skills, characteristics, motivation. (Redmond, 2010)

Outcome: Benefits that a person is awarded from a job. For instance- pay, security, insurance, promotion/advancement. (Redmond, 2010)

Comparison Other: Person or standard that an individual's input/outcome ratio is compared to. (Redmond, 2010)

Benevolent: A giver, or person who is tolerant of under reward equity. (Huseman, et. al.,1987)

Equity Sensitive: A person who must have an equity balance or else they will experience a stressor until they rebalance (Huseman, et. al.,1987)

Entitled: A person who feels that others owe them, therefore are over rewarded. (Huseman, et. al.,1987)

Distributive Justice: Outcomes are spread evenly and fairly throughout an organization. (Stecher and Rosse, 2007)

Procedural Justice: Determines if the process of allocating outcomes/rewards is fair. (Redmond, 2010)

Underpayment Inequity: Also known as negative inequity. This occurs when the ratio of one's own inputs and outcomes is greater than or less than favorable than the ratio of a comparison other. (Redmond, 2010)

Overpayment Inequity: Also known as positive inequity. This occurs when the ratio of one's own inputs and outcomes is lower than or more favorable than the ratio of a comparison other. (Redmond,2010)

Equity Theory attributes the source of a person's motivation to a comparison that has been made which causes the person to feel inequity (Gogia, 2010). Ratios are used to compare inputs and outcomes. When a person compares their input/outcome ratios with the ratios of another and perceives these ratios as not equal, he or she will feel inequity and may be motivated to reduce it (Gogia, 2010).

Types of Inequity Felt

("Motivation theories," 2009)

Overpayment (positive inequity)

Receiving greater outcomes

to inputs compared to another

Underpayment (negative inequity)

Receiving less outcomes to

inputs compared to another

Person: 50 (inputs)/75 (outcomes)

Other: 50/50

Result:

Hourly work (salaried position):

Greater input (e.g., effort) to reduce

the perceived inequality regarding the

quantity and quality of goods

Piece rate: Greater input to

produce better quality goods Person: 50/50

Other: 50/75

Result:

Hourly work (salaried position):

Less input (e.g., effort) to produce less

number and poor quality of goods

Piece rate: Greater input to produce more

quantity of goods but with less quality

Resolving Perceived Inequity

Behavioral Options-

Changing their input to match outcomes (e.g., leaving early or slacking off) ("Motovation theories," 2009)

Change outcomes to match inputs (e.g., asking for a pay increase, stealing) ("Motovation theories," 2009)

Pursuading others to change inputs (e.g., complaining to superiors) ("Motovation theories," 2009)

Withdrawal (e.g., tardiness or turnover) ("Motovation theories," 2009)

Cognitive Options-

Distort one's own inputs or outcomes (e.g., "I'm not really working that hard," "I have a lot of free time") ("Motovation theories," 2009)

Distort the inputs or outcomes of others (e.g., he/she gets more money than me but they have to live in Buffalo) ("Motovation theories," 2009)

Change the comparison others ("Motivation theories," 2009)

Equity theory can be broken down into four basic propositions (Huseman, Hatfield, & Miles, 1987).

1. Individuals develop their perception of fairness by calculating a ratio of their inputs and outcomes and then comparing this to the ratio of others (Huseman, et. al., 1987). Inputs are the value proposition of individuals, such as their productivity, time, and education. Other examples include the experience, knowledge, ability, qualifications and ambition of the individual (Cory, 2006). Outcomes are the rewards an individual receives. These rewards can be tangible, such as financial compensation, or intangible, such as recognition or job security. The comparable other could be a co-worker, a relative, the industry norm, a friend, or even a group of individuals (Adams, 1963). The comparable other can even be oneself in a past job (Adams, 1963). For example, an individual may not perceive he is being treated fairly when he works 40 hours per week (input) and receives $500 in pay (output) while his co-worker works 30 hours per week and receives $650 in pay.

2. If the comparative ratios are perceived by the individual to be unequal, then inequity exists (Huseman, et. al., 1987). According to equity theory, an individual needs to perceive that the ratios of their contributions are weighted fairly: determined by equal ratios. Equity is all about balance (Spector 2008). Equity is present when a person feels that they are receiving the appropriate amount of outcomes from their inputs, when compared to their chosen comparison other. Inequity exists when there is a perceived difference in the ratios of inputs and outcomes. Two specific types of inequity exist: underpayment inequity and overpayment inequity. Underpayment inequity occurs when an individual perceives that their ratio is smaller than their comparison other: they are getting less for their inputs. For example, if someone feels they are putting in more effort or working harder than a co-worker, yet they earn equal or less compensation, their perceived ratios will be different and that person will experience underpayment inequity. In contrast, overpayment inequity tips the scales in the other direction. For example, someone will feel they are being paid too much considering their work, when compared to the work and compensation of a co-worker. This can cause feelings of guilt and the ratios used for comparison are based upon the perception of an

individual, and not an objective measure of inputs and outcomes. Additionally, the choice of a comparison other is also the subjective selection of the individual.

3. As the difference in inequity increases, the tension and distress felt by an individual will increase (Huseman, et. al., 1987). Smaller differences of inequity are more tolerable than significant differences of inequity. Not every person will experience equity or inequity in the same way because people have varying tolerance levels or sensitivity to perceived situations of inequity. Three types of individuals have been identified along an equity sensitivity spectrum: benevolents, equity sensitives, and entitleds (Huseman, et. al., 1987). Benevolents are more tolerant of underreward (Huseman, et. al., 1987). Equity sensitives follow the norm of equity theory and prefer their ratios to be equal to their comparison other (Huseman, et. al., 1987). Entitleds prefer to be in over-reward situations and want their ratio to exceed that of their comparison other (Huseman, et. al., 1987). Entitleds frequently have the attitude that the world owes them a favor, so they will freely accept and seek out over-reward situations.

4. The greater tension an individual feels due to perceived inequity, the harder they will work to decrease their tension and increase perceived levels of equity (Huseman, et. al., 1987). Most individuals will attempt to achieve equity by adjusting their own inputs and outcomes, or attempting to change the inputs or outcomes of the comparison other. Individuals can use behavioral processes or cognitive processes in order to attempt to restore equity. Examples include decreasing productivity at work, finding a new job, asking for a wage increase, changing the comparative other, or attempting to distort or justify changes in their perceptions of inputs and/or outcomes (Adams, 1963). The means of reducing inequity will vary depending on the situation and will not all be equally satisfying to an individual (Adams, 1963).

Equity Theory Components

Adams' equity theory is based on a ratio consisting of inputs to outcomes (Adams, 1963). Inputs consist of contributions by an individual. An attribute is only considered an input if it is perceived as relevant by the individual (Adams, 1963). Inputs can include abilities, effort, performance, age, seniority, education, and other attributes. Outcomes are the rewards an individual receives for their inputs (Adams, 1963). Outcomes can include pay, benefits, status symbols, and even intrinsic rewards (Adams, 1963). The value of an outcome is determined by the recipient (Adams, 1963), so no outcome has a specific objective measure. For example, an individual might rate their college degree as a more valuable input than the college degree of another person due to their perception on a college's prestige. Or an individual makes more money than a co-worker but has a less flexible schedule; they might value the flexible schedule more than their extra income. An individual calculates their subjective value of inputs and outcomes then compares it to others’ ratios in order to determine if it is equitable.

Equity theory can be applied in almost any exchange situation, so there are a multitude of components that can be listed as inputs or outcomes. There also can be significant difficulty in determining these exact components due to their subjective nature (Siegel, Schraeder, & Morrison, 2007). Siegel, et al. found that there might be patterns to how individuals cognitively frame inputs and outcomes. For example, employees tend to distinguish inputs based on whether they are controllable, such as communications or attendance, or non-controllable, such as seniority or job

training (Siegel, et. al., 2007). Employees also distinguish differing characteristics of outcomes (Siegel, et. al., 2007). Outcomes are evaluated on whether they are economic or non-economic and whether they are personalized or generalized outcomes (Siegel, et. al., 2007). It is important to understand if there are general guides for how employees evaluate inputs and outcomes, in order to help prevent perceptions of inequality. It is important for managers and employers to find a suitable measure between them (Cory, 2006).

If managers can help prevent perceptions of inequality they can help prevent their employees from becoming de-motivated. “Swinton (2006) developed a list of ways an employee can express motivation. This list is produced below.

Typical Inputs:

Effort

Loyalty

Hard Work

Commitment

Skill

Ability

Adaptability

Flexibility

Tolerance

Determination

Enthusiasm

Trust in superiors

Support of colleagues

Personal sacrifice

Time

Honesty

Devotion

Organization

Typical Outputs:

Financial rewards (salary, benefits, perks, etc.)

Intangibles that typically include:

Esteem

Recognition

Reputation

Responsibility

Sense of Achievement

Praise

Thanks

Sense of Advancement/Growth

Job Security

Peer respect

Self respect

Well-being

Stronger relationships

There needs to be a balance between the inputs and outputs received.

The employee must also be content when trying perceive these all in balance.

However, if an employee’s perceived input is greater than their perceived outcomes, they can become de-motivated and engage in disruptive behaviors (Swinton, 2006). Examples of disruptive behaviors include decreasing productivity, theft, increased breaks, or absenteeism. Management can do a lot to prevent perceptions of inequity, the assessment of inputs and outcomes will remain based on individual's subjective perception (Adams, 1963).

Although management can do a lot to prevent perceptions of inequity, the assessment of inputs and outcomes will remain based on an individual’s subjective perception (Adams, 1963).

Equity Sensitivity

Individuals are happier and experience less tension when they are equitably rewarded, as opposed to experiencing underreward or overreward (Austin & Walster, 1974). Equity theory is based on the “norm of equity” which assumes that everyone is equally sensitive to equity and inequity (Huseman, et. al., 1987). This means that everyone experiences the same level of tension when they experience the same level of inequity; however, this isn’t always true. Research has found that other norms may exist which are dependent upon factors such as age or personality (Huseman, et. al., 1987).

The Equity Sensitivity Construct describes a spectrum of varying sensitivities to equity and inequity (Huseman, et. al., 1987). The idea of equity sensitivity determines the extent to which an individual will tolerate inequity. There are three categories of individuals identified along the equity sensitivity spectrum: benevolents, equity sensitives, and entitleds (Huseman, et. al.,1987). Benevolents are “givers” and are more tolerant of underreward inequity (Huseman, et. al., 1987). Equity sensitives are in the middle of the spectrum, and behave in accordance with the “norm of equity” and equity theory. Equity sensitives experience tension with inequity and will seek to restore a balance of equity in their relationships (Huseman, et. al., 1987). On the other end of the spectrum is the entitleds. Entitleds prefer to be overrewarded. As the name indicates, entitleds are individuals who frequently have an attitude that they are owed and thus are entitled to great outcomes.

Equity sensitives will experience distress when faced with either type of inequity: underreward or overreward. Benevolents will experience distress and possibly guilt when they in a situation of over-reward. Because benevolents don’t necessarily seek out underreward, they might not experience distress when in an equitable relationship. Entitleds experience distress when in an equitable or underreward situation.

The Equity Sensitivity Construct is useful to understanding equity theory and individual behavior; however, the three categories of equity sensitivity don’t account for all individual differences in preferences and behavior.

Individuals might show different equity sensitivities in different contexts (Huseman, et. al., 1987). For example, an individual might be equity sensitive in their personal relationships, preferring an equitable balance; however, they might be an entitled at work and feel comfortable with overreward.

In addition to preferring different outcome ratios, equity sensitivity groups also differ in their preference for types of outcomes (Miles, Hatfield, & Huseman, 1994). Specifically there are differences in preference for extrinsic tangible outcomes versus intrinsic outcomes (Miles, et. al., 1994). Entitleds have a stronger preference for extrinsic tangible outcomes (Miles, et. al., 1994). A

specific example of this is in the realm of pay: entitleds rate pay higher in importance than the other two equity sensitivity groups (Miles, et. al., 1994). Conversely, benevolents rate extrinsic outcomes lower in preference and show a stronger preference for intrinsic outcomes (Miles, et. al., 1994). It is possible that some of these differences can be attributed to other factors such as age. Younger workers and older workers value different things and the meaning of work varies by age (Smith, 2000). With this is mind, it is possible that age, or other external factors, might play a part in which equity sensitivity group an individual is likely to be in.

Where does Perceived Inequity Come From?

According to equity theory, perceived inequity comes from social comparisons (Adams, 1965). Specifically, we form a ratio of our inputs to outcomes and compare it with others' input/outcome ratios (Redmond, 2010).

Equity Theory states that people strive hard to achieve and maintain a state of equity or fairness in order to maintain internal, psychological balance (Adams, 1965). However, when ratios are different, a state of inequity exists, and employees will be motivated to bring it back into balance. There are two types of inequity; underpayment and overpayment.

Examples of Inequity

Underpayment Inequity:

Sarah was hired at Corporation X to work in their Human Resources department after she graduated with a bachelor’s degree in Human Resources Management. As of current, Sarah has been with Corporation X for 3 years and is in line to move into a management position within the next six months. About three months ago, Corporation X hired another team member in the HR department to assist Sarah in her daily duties as they were getting too much for one person. The new team member, Alison graduated the same year as Sarah with a bachelor’s degree in Communications and doesn’t have any experience in HR relations. One day at lunch Alison reveals her salary to Sarah and tells her that she is surprised a company would pay her that salary with no experience in HR. Sarah realizes that she doesn’t make quite as much as Alison. She is immediately leaded to feeling undercompensated considering she does most of the work and Alison just helps. Sarah realizes that she needs to make Alison accountable for more projects so her inputs match her outputs.

Overpayment Inequity:

Sarah was hired at Corporation X to work in their Human Resources department after she graduated with a bachelor’s degree in Human Resources Management. As of current, Sarah has been with Corporation X for 3 years and is in line to move into a management position within the next six months. About three months ago, Corporation X hired another team member in the HR department to assist Sarah in her daily duties as they were getting too much for one person. The new team member, Alison graduated the same year as Sarah with a bachelor’s degree in Human Resources Management and until recently worked for another company in their HR department. One day at lunch Alison reveals her salary to Sarah and tells her that she is surprised a company

would pay her that salary starting out in their HR department even though she has experience elsewhere. Sarah realizes that she makes a few more dollars than Alison. She is immediately leaded to feeling overcompensated considering she does most of the same work Alison does and gets paid more. Sarah realizes that she needs to be accountable for a few more things than Alison so her inputs match her outputs.

Ways to Reduce Inequity

When an individual experiences tension due to perceived inequity they will work to reduce that tension (Adams, 1963). The greater tension they experience, the more effort they will put into reducing it (Adams, 1963). There are two main processes an individual can use to restore equity: behavioral processes and cognitive processes.

Behavioral Processes to Restore Equity

Behavioral processes involve changing an individual’s input or outcomes. These behaviors can be positive, such as being more productive at work, or negative, such as decreased productivity at work. Behavioral ways to reduce inequity are dependent on whether the individual perceives the inequity as underreward or overreward.

One behavioral approach for an individual to balance equity is to either increase or decrease their inputs in order to achieve equity. If they feel underrewarded they will decrease their inputs. If they feel overrewarded they will increase their inputs. For example, an employee who feels underpaid at work compared to his coworkers (underreward) might start taking longer breaks in order to read the entire newspaper which decreases productivity (reduced input). By decreasing inputs, the perception of equity is restored. Conversely, an employee who feels over paid compared to coworkers (overreward) might choose to start working through the lunch hour (increased input). In both of these examples, the employee was dissatisfied with their perceived inequity and reduced or increased their input to achieve equity.

Another behavioral approach that individuals can use to achieve equity is changing their outcomes. Types of behavioral outcomes are also determined by the employee’s perception of underreward or overreward. If an employee doesn’t receive their annual holiday bonus as expected (underreward) they might steal office supplies for their home to compensate (increased outcome). Even though the employee might ethically disagree with stealing, the employee justifies the action based upon the need to restore equity. Theft has been found as a retaliation tactic to unfairness in the workplace (Hollinger & Clark, 1983). An employee can also take more ethical action to increase inputs, such as lobbying for a wage increase or extra time off. On the other hand, an employee that perceives inequity due to a large holiday bonus (overreward) might donate toys to the company daycare center (reduced outcome). This restores the perception of equity in the workplace.

Behavioral approaches can also cause an individual to attempt to change the input or outcome of their comparative other. A group of employees might perceive that a co-worker is overrewarded, so they might pressure their co-worker to work faster or improve quality. Conversely, an employee

or group of employees might pressure a co-worker to slow down or work less. An individual’s power to change the inputs or outcomes of their comparative other might be limited, so working to change their own inputs or outcomes is usually attempted first.

Cognitive Processes to Restore Equity

Cognitive processes involve developing justifications for the inequity to make it seem equitable, distorting perceptions of inputs and outcomes, changing the comparative other, or any other method that attempts to reframe the perception of the situation. In some ways, cognitive processes can require less effort than behavioral processes; however, they can also be more difficult to accomplish due to the necessity of distorting one’s own perceptions.

For example, a principal at an elementary school may perceive inequity because the high school principal earns more income and benefits even though they work in the same school district and have the same occupation. The principal could choose to engage cognitive processes to restore equity instead of behavioral processes. The principal could justify that the high school principal has more credentials or manages a larger number of teachers. In this way, no actual change of inputs or outcomes occur but the elementary school principal justified changes in the perception of inputs. Another cognitive process alternative would be to choose a different comparative other. The elementary principal could select other elementary school principals in the same district. This might provide a more equitable comparison, which decreases the principal’s perception of inequity and underreward.

Both cognitive processes and behavioral processes can be effective in reducing one’s perception of inequity. An individual will most likely use a process that is relatively easy and the most satisfying in restoring a perception of equity.

Research on Equity Theory

In the four decades since John Stacey Adams pioneered the Equity Theory of motivation, an extensive amount of research has been conducted testing the validity of this theory. Equity Theory has been used to test several types of dyadic relationships like marriages, teacher/student and employee/employer relationships. The research has tested parts of the theory including the effects of over and under payment equity, equity sensitivity, and the behavioral and cognitive methods of reducing the dissonance caused by feelings of inequity. Within the work setting Equity Theory has been researched in several important areas. Outlined below, research related to determine the effects of perceived equities or inequities on the level of worker motivation or satisfaction will be discussed.

“Countless studies have been conducted between the introduction of equity theory by Adams in 1963 and today. Four examples of equity research contributions will be discussed below: Lawler & O’Gara 1967; King, Miles, & Day 1993; Sweeney & McFarlin 2005; and Schultz, Schoenherr, & Nebhard 2006. Each of these research studies focused on key pieces of Equity Theory in practice: work output when inequities are present, sensitivity to equity or inequity, and work outputs as measured against one’s peers.

1967: Effects of Inequity on Work Output and Quality by Underpayment

A study published in 1967, Effects of Inequity Produced by Underpayment on Work Output, Work Quality, and Attitudes Towards the Work, by Lawler & O'Gara found that equity theory was indeed supported in that those who received less pay than their peers doing the same job (the comparative other) found ways to "increase their outcomes while decreasing their inputs" (p. 408). Lawler and O'Gara (1967) conducted their research via an experiment. Forty Yale University undergraduate students were hired to conduct interviews and were paid on a piece-rate basis. The lower paid group received $.05 per interview and the higher paid group, which was more in line with competitive wages during the time, was paid $.25 per interview. The workers were given two hours to complete as many interviews as possible.

The researchers hypothesized that the workers who were in the underpaid group would produce more survey results (in hopes of increasing their outcomes - making more money), but that the surveys they produced would be of a lower quality than the higher paid group. Further, Lawler and O'Gara (1967) believed that the underpaid group would be less satisfied with their scope of work. The level of equity or inequity and the level of job satisfaction that was felt by both groups were measured after the work assignment using The California Personality Inventory scores for Job Performance and Job Attitudes.

The study results proved that Equity Theory was applicable in the work environment. The underpaid group experienced feelings of inequity using the higher paid group members as their comparative others. Further, the hypothesis that the underpaid worker would produce more work output via conducting more interviews was indeed correct. Lawler and O'Gara (1967) determined that this group was increasing their personal outcomes to earn more money by working harder to make up for the piece-rate inequity. Additionally, the researchers proved their position that the work of the underpaid group would be of poorer quality than the group who experienced fewer feelings of inequity (the higher paid group). The interview results of the lower paid group had fewer recorded results; thus, their inputs were also reduced in response to perceived inequities. The lower paid group was found to have perceived the work as "relatively unimportant, simple and unchallenging" (Lawler & O'Gara, 1967, p. 408) as opposed to the more equitably compensated group.

1988: Equity and Workplace Status: A Field Experiment

Greenberg (1988) stated that, "According to equity theory, workers who receive levels of reward higher or lower than coworkers who made equivalent contributions to their jobs are considered overpaid and underpaid respectively" (p. 606).Since research on equity theory had previously studied pay, Greenberg (1988) wanted to study workplace status as an outcome of equity theory. The purpose of this study was to assess whether equity theory applied to situations where employees experienced inconsistencies between their job status and work area (Redmond, 2010). Greenberg (1988) found a company that was refurbishing their offices and was able to manipulate variables. The sample group was 198 employees from an insurance company with the IV was office conditions of higher, lower, or equal status. The DV was the job performance and satisfaction of the employees. The data was collected at six intervals, two before reassignment, two during, and two after (Redmond, 2010).

Greenberg (1988) hypothesized that employees reassigned to offices of higher status would be more productive than those reassigned to offices of equal status employees. Similarly, workers reassigned to offices of lower status were expected to be less productive than those reassigned to offices of equal-status workers (Redmond, 2010). Greenberg was correct in his hypothesis and now had results showing that money was not the only driving factor for equity theory.

Critics of this study point out that this was a short-term study that shows no long-term results.

1990: Employee Theft as a Reaction to Underpayment Inequity: The Hidden Cost of Pay Cuts

In this study, Greenberg (1990) looked at employee theft as a reaction to inequity. A manufacturing company had lost two large contracts which forced the company to temporally reduce pay of their employees in Plants A and B while employees in Plant C did not have to reduce pay. Plant A workers received a 90 minute meeting to explain these pay cuts while workers of Plant B received only a 15 minute meeting. Greenberg (1990) hypothesized that Plant B would experience a large increase in employee theft, Plant A would experience a slight increase, while Plant C's theft rate would stay the same. Two categories of dependent measures were used, data on employee theft and self-report measures were reported as well (Greenberg, 1990).

Once again, his theories were correct. Plant B experienced a large increase in theft while Plant A experienced a smaller increase. Plant C's employee theft remained the same (Greenberg, 1990).

1993: The Equity Sensitive Construct

Gauging the level of tolerance for inequities is an important field of study in Equity Theory. From an employer's perspective, it may often be necessary to know which employees will be sensitive to any level of inequities derived from work policies or practices. In the study, A Test and Refinement of the Equity Sensitivity Construct, researchers hoped to test, both in an experimental and field setting, a "refinement of the equity sensitivity construct" (King, Miles & Day, 1993, p.301). The proposition of the study was that some individuals are uniquely sensitive to perceptions of equity or inequity and will, in turn, react accordingly based upon their perceptions. The equity sensitive construct, according to the researchers, is defined as the investigation of a person's "perception of what is and what is not equity, and then uses that information to make predictions about reactions to inequity" (King, et. al., 1993, p.302).

The study classifies people as either "benevolents, equity sensitives, or entitleds" (King, et al., 1993, p. 302), depending on how sensitive they are to the equity rating. Equity sensitives will follow Adam's model of the Equity Theory, but the benevolents and entitleds will be at opposite ends of the "equity sensitive spectrum" (King, et. al., 1993, p.302). Thirteen separate hypotheses were evaluated in this research study.

The researchers first administered tests to the participants to determine their level of equity sensitivity. The participants were then assigned randomly to either under reward or over reward conditions. The results showed that all of the researchers' hypotheses were consistent with the equity sensitivity construct. The researchers did find that the "manipulations of outcomes was a

stronger cause of dissatisfaction than was manipulation of inputs" (King, et. al., 1993, p. 310), essentially indicating that the participants were more sensitive to inequities when they didn't feel they were rewarded as much as their peers. The researchers confirmed that there is "strong support for the equity sensitivity construct and its incorporation into equity theory to enhance its predictive power" (King, et. al., 1993, p. 310). The results of this research further help make Equity Theory germane to the workplace, allowing employers to make initial assumptions about how employees may react to potential or perceived inequities, based upon their employees' beliefs and personal norms.

2005: Wage Comparisons with Similar and Dissimilar Others

Wage satisfaction and social comparison relationships has been the subject of several research studies over the past 30 years. Paul D Sweeney and Dean B. McFarlin of University of Dayton conducted a study, Wage Comparisons with Similar and Dissimilar Others (2005), in order to determine if social comparisons can predict an employee’s satisfaction with their wage. Sweeney and McFarlin hypothesized based on the Equity Theory that as employees compared their wages to similar others; their wage satisfaction would vary based on that social comparison. (Sweeney & McFarlin, 2005)

Four individual survey-based studies were conducted to test the hypothesis that wage satisfaction would more likely be affected by comparison to similar others in order to determine if their wage was fair. In the first two studies, subjects were asked to compare satisfaction with others in a similar occupation within and outside of their current organization. In the third and fourth studies wage satisfaction was compared with employees who had similar and dissimilar occupations.

Study 1

235 engineers at a Midwest utility company were mailed surveys to collect salary, age, sex, marital status, tenure, and job grade. The survey also collected data from scale rated questions pertaining to satisfaction of their pay and their perception of how others are paid with similar jobs outside the organization. The researchers found that wage is a strong predictor of wage satisfaction but comparisons to similar as well as dissimilar others also was an important and equal predicator as well. (Sweeney & McFarlin, 2005)

Study 2

During this study researchers attempted to replicate their findings from study 1 by using a large sample of US federal government workers from the Office of Personnel Management. The data was collected from a random stratified sample of workers where demographic information and scaled rated questionnaire responses were submitted by participants. (Sweeney & McFarlin, 2005) Upon statistical analysis of the data, the researchers once again found that wage itself was the most reliable predictor of wage satisfaction but both internal and external comparisons were also highly important predictors of the variation in wage satisfaction. (Sweeney & McFarlin, 2005)

Study 3

During this study the construct of similarity was viewed based on similar and dissimilar occupations. The data for this study came from “Economic incentives, values, and subjective well being research project of the Survey Research Center of the Institute of Social Research, the University of Michigan (1975)”. The survey-based data were collected using a multistage area probability sampling procedure where each data point came from someone who was at least 18 years old and employed. Like the first two studies the questions were scale based and represented perceptions about their wage and their relative satisfaction. As in the first two studies, the highest predictor of wage satisfaction was based on the income level itself and comparisons with both similar and dissimilar occupations predicted variability in wage satisfaction. (Sweeney & McFarlin, 2005)

Study 4

This study was researched in order to replicate the results of Study 3 and pulled data from the same University of Michigan research project while using an entirely different sample using the same 18 and older and employed criteria. The results and conclusions were the same as Study 3.

The results of all of the studies were surprising to the researchers. The most important predictor of wage satisfaction was the level of income and although comparisons to similar others did show a strong correlation, so did comparisons to dissimilar others. Defining the similarity construct as an occupation or organizational comparison did not change the strength of income being the strongest predictor of satisfaction. According to Adams Equity Theory (n.d.), employees would have detected a discrepancy of their efforts and wage ratios with similar others which would lead to dissatisfaction. Also, Adam’s theory would explain that our social comparison of the most similar others would have the greatest impact but in the case of wages there seems to be the other primary factor of income level and what that means to an employee that determines level of satisfaction.

2006: Work Motivation on an Assembly Line

During 2006, another research study applying Equity Theory in the workplace was conducted by professors from Cornell's School of Management, Eastern Michigan University's College of Business, and Penn State University's Department of Industrial and Manufacturing Engineering. The cross-functional research offered a unique perspective toward best practices in "modeling and understanding [assembly] line design" (Schultz, Schoenherr & Nembhard, 2006) in the work entitled, Equity Theory Effects on Worker Motivation and Speed on an Assembly Line. The study was completed on the basis that equity theory indicates that workers react to and modify their work behavior based upon the speed or rate of the work of the people around them. The hypothesis under evaluation was: "In additive interdependent work situations, workers will adjust their speed toward the speed of their coworkers, creating a correlation among processing times" (Schultz, et. al., 2006, p.9).

Data was examined for three production lines of a major automobile manufacturer. One hundred forty-eight workers' task times for a period of six months' work was recorded and reviewed. The results found that, on average, a person will adjust his or her "time by 41% of how much faster, or

slower, their nominal time is in relation to the coworkers" (Schultz, et. al., 2006, p. 15). The researchers believed that the positive correlations found between the speed of a worker and the speed of his or her coworker were consistent with Equity Theory, as workers desired to decrease gaps between their work pace (inputs) and the work pace of their co-workers. The study results were purported as important in design of assembly lines such that work stations should be arranged as to take advantage of this equity theory effect by allowing workers only to be able to see the employees who are the fastest in the plant.

Both classical and contemporary research supports the validity of Equity Theory and its application in the work setting. While Equity Theory is supported as fact when reviewing the actions and behaviors of those who feel they are subject to inequities, additional research into how Equity Theory can be used proactively to increase the motivation and behavior of workers is necessary.

2009: Dishonesty in the Name of Equity

In 2009, Gino and Pierce conducted a research study in order to determine when it is that people act dishonestly to either help or hurt others. They had two experiments. The first was to analyze the effects of emotional reactions to inequity. The second was to analyze how far individuals would go to help one another.

The participants in this study were mostly students from Carnegie Mellon University. They were divided into groups and either did or did not receive money. They then had to grade problems completed by the individual with whom they were paired. If the solver got the problem right, he would get money. They tried to determine if individuals would be dishonest in reporting whether or not the solver actually completed the problem correctly. They found that individuals did help when there is equity (having money or not). They also found that having negative inequity causes them to have a much stronger influence on reporting the performance of the solvers (Gino & Pierce, 2009).

This study found that individuals are more likely to engage in dishonest behavior when they have inequity of wealth (Gino & Pierce, 2009). The implications of this study suggest that managers should try to keep equity between employees, because when inequity occurs, dishonesty will also occur.

Strengths and Weaknesses of Equity Theory

Equity Theory is a good resource for organizations to consider when it comes to understanding social comparison amongst employees. However, as with any theory, there are strengths and weaknesses in terms of both practice and research. Thus, in order to understand the use and applicableness of the Equity Theory as an explanation and/or as a motivator in the workplace it is vital that these strengths and weaknesses be reviewed and evaluated.

Strengths

The following factors add to the strength and validity of Equity Theory.

Research Efficiency, effectiveness, and

applicableness of theory components supported by several

research studies over the years

For example:

1. 1967- Effects of Inequity Produced by Underpayment on Work Output, Work Quality, and Attitudes Towards the Work, by Lawler & O'Gara

2. 1993- A Test of Refinement of the Equity Sensitivity Construct

3. 2006- Equity Theory Effects on Worker Motivation and Speed on the Assembly Line

4. The effects of underpayment inequity in organizations are strongly supported (Pinder, 2008)

Theory

Accurately predicts behavior

For example:

- As in underpayment conditions, which is observed and proven through the research of the Greenburg Studies in 1990

Theory

Makes practical sense

For example:

- Reasonable to assume that most people do compare "their inputs and outcomes relative to others" (Redmond, 2009)

Theory Ability to fit with other theories (particularly the expectancy theory) Stetcher and Rosse (2007) state that "based on the assumption that people are capable of calculating costs and benefits in choosing among alternative courses of action" (p. 778). For example, employees can use the equity theory to determine if inequity has occurred, and if so, they can use the expectancy theory to act upon the inequity.

Weaknesses

The following factors illustrate some of the problems with Equity Theory.

Theory Lacks detail into certain factors

For example:

- Offers a variety of strategies for restoring equity but does not predict in detail which option an individual will select (Redmond, 2009)

Research

Mixed empirical support

For example:

- Research on overpayment inequity reveals little effect of it in organizations (Redmond, 2009)

Research

Limitations

For example:

- Because many studies were short-term there is no knowledge of long-term reactions to inequity (Redmond, 2009)

Theory

Little practical value, thus better as an explanation after the fact than as a predictor of behavior (Redmond, 2009)

For example:

- Various factors, which are not under administrations, managers, and/or organizations control can lead to inequity (Redmond, 2009)

Theory

Perception errors

For example:

- Human perception can be flawed, thus exposing any conceived perception of outcomes and inputs to error as well

Theory

The original equity theory, as posed by Adam's, lacks scientific consideration or explanation for different values or lack thereof of equity itself within cultures

For example:

- Research conducted on the equity theory as it pertains to the eastern cultures found that equality, rather than equity, was preferred (Leung and Bond, 1982, 1984; Leung and Park, 1986; Mahler, Greenberg, and Hayashi, 1981, as cited in Fadil et al, 2005)

As illustrated above, the Equity Theory possesses both strengths and weakness, the examination of which is necessary for the correct use of the theory’s application in the workplace. Equity Theory, with its strong empirical support, can be used in the workplace as a vital tool in reviewing motivation and understanding employee behaviors. Furthermore, the weaknesses of the theory shed crucial light upon what it is that needs further research and examination, thus providing us with the knowledge of the information we ought to seek in order to further understand the structure of workplace motivation.

Application of Equity Theory in the Workplace

It is in the best interest of the employer to ensure that their workforce remains motivated and productive. Equity theory assesses employee motivation on the basis of an individual’s subjective perceptions, so it can be difficult for an employer to determine how employees perceive their inputs, which outcomes they value, and who they select for their comparison other. While it is difficult, if not impossible, to predict with whom employees might compare their inputs and outputs, there are measures that an employer can take to reduce feelings of inequity or combat perceptions of inequity in the workplace.

In terms of handling the distribution of rewards, employers should be attuned to distributive and procedural justice. Distributive justice involves ensuring that outcomes are fairly distributed in the organization (Stecher and Rosse, 2007). Procedural justice deals with whether or not the process used to allocate the rewards is fair (Redmond, 2009). A low level of distributive justice is associated with increased amounts of organizational counter-productive work behaviors (Kwak, 2006). Low levels of procedural justice correlate with increased organizational and interpersonal counter-productive work behaviors (Kwak, 2006). Increased levels of distributive or procedural justice can help prevent perceptions of inequity as well as any counter-productive work behaviors. While the meaning of procedural justice will vary from organization to organization, there are several common themes that will help to establish a just process. Giving employees a voice in the decision-making process, making unbiased decisions, and being consistent in the application of rules lends to a procedurally just process. “People feel affirmed if the procedures that are adopted treat them with respect and dignity, making it easier to accept outcomes they do not like” (Deutsch,

2000, p.45). High levels of procedural and distributive justice won’t necessarily prevent employees from having a perception of inequity or unfairness in the workplace; however, an employer can also prevent repercussions from perceptions of inequity. For example, Skarlicki and Folger (1997) found that employees that are treated with respect are more likely to tolerate unfair pay. Whether the pay or compensation is actually unfair might be irrelevant. To the employee a perception of unfair compensation is the same as actual unfair compensation. So, if an employee has a perception of inequity in their compensation they might be more willing to tolerate their perception of unfair pay if they are treated with respect by their employer. Then they will be less likely to decrease their inputs or engage in counter-productive work behaviors to compensate for a perception of underpayment inequity. So, in addition to establishing fair distribution and procedures in an organization, employers should always treat their employees with respect. This can help maintain or increase motivation and prevent problems that stem from perceptions of under reward.

Employers also need to remember that employees can value different outcomes. For example, younger employees tend to value more pay (Miles, et. al., 1994). Even if an employee receives a higher salary than their co-worker they could still develop a perception of inequity if that co-worker has a flexible schedule, and a flexible schedule is more valuable to them than extra salary. To combat this problem, employers can implement two strategies. First, they could continually request feedback from employees to determine what they value and how they would prefer to be compensated. Another strategy used by employers is to offer a choice in benefits. For example, one employee might want to use a health flexible spending account while another employee might prefer to have a dependent care flexible spending account. Employers can offer choices on health or dental insurance as well as other choices among benefits. This type of plan, called a cafeteria style, allows employees to select outcomes that they value most. This can help prevent perceptions of inequity because each employee has the outcomes that they value the highest. This helps increase their ratio of inputs to outcomes when compared to their co-workers.

Employers can also utilize intangible rewards such as a pat on the back, a luncheon, or even simple praise in front of co-workers. These simple intangible rewards can help balance a measure of inputs and outcomes.

Utilizing equity theory to understand how employees measure their inputs and outcomes can help employers prevent problems related to perceptions of inequity, such as reduced productivity or theft. In addition to reducing or preventing negative behavior, employers will maintain satisfied and motivated employees.

Global Application of Equity Theory

While there have been various attempts at breaking down the cultural barriers that have developed within organizations across the globe, one factor that continues to need research is how cultural differences influence the equity theory (Fadil, Williams, Limpaphayom, and Smatt, 2005). Although the equity theory, as posed by Adams, has been recognized by many to be on target, it was not until the 1980s that it was tested on non-Western cultures. Once research was conducted on the equity theory and how it pertains to the Eastern culture, results found that equality rather than equity was preferred (Leung and Bond, 1982, 1984; Leung and Park, 1986; Mahler, Greenberg and Hayashi, 1981 as cited in Fadil et al, 2005).

The Eastern cultural view of the equality rule states that rewards will be given out equally to all those involved in the group’s performance regardless of individual inputs or personal efforts (Fadil, et. al., 2005). Based on this information it was thought that a more detailed look at how “equality” fits into the equity theory model would be very beneficial. This would enable international managers and global organizations to have a more clear understanding of how the equity theory can be applied across Western and Eastern cultures as well as regions throughout the world (Fadil, et. al., 2005).

Equity vs. Equality

Under the equality model rewards are equally given out to all participants despite individual inputs. Therefore, the outcome is preset. This is opposite the equity theory which states that individual outcomes or rewards will be in proportion to individual inputs and efforts (Fadil, et. al., 2005). Researchers found that individuals may be inclined to have varying views on the concepts and orientation of equity based on their socio-historical period, cultural background, and even individual personality types (Sampson, 1980 as cited in Fadil, et. al., 2005).

Individualism vs. Collectivism

Individualism (Western) and Collectivism (Eastern) are cultural dimensions that separate the regions of the world, with the major difference being their cultural view on group membership. Collectivistic cultures make a clear distinction between their in-groups and out-groups compared to those in the individualistic cultures. (Hui, Triandis, and Yee, 1991 as cited in Fadil et al, 2005).

The Culturally-Sensitive Equity Model

Inputs

Outcomes

Choice of a

Referent Other

Methods of

Reducing Inequity

Individualism

Effort, education, intelligence, experience

Pay, autonomy, job status, fringe benefits

Range of individuals due to loosely tied in-groups

Altering inputs or outcomes of the individual or the comparison other

Collectivism

Group membership, loyalty, support, respect

Harmony, acceptance, social status, solidarity, cohesion

May choose out-groups as a group referent, not an individual

May alter inputs of self; however, due to shame control they are unlikely to occur

The Culturally-Sensitive Equity Model serves to show how the equity theory not only applies to the Western culture, but also Eastern, collectivistic cultures (Fadil, et al., 2005). The model also encompasses the more collectivistic cultural notion of equality. Lastly this model illustrates how the inputs and outcomes components of the equity theory can include group-based rewards as well as the importance of in-groups and out-groups via group membership. The Culturally-Sensitive Equity Model can be used as a tool for international managers who either have employees, customers, or suppliers in both the Western and Eastern regions of the world. Through the use of this model, these managers can gain a global understanding and have a true appreciation for the various inputs and outcomes that motivate their employees based on orientation and cultural perspectives.

Workplace Considerations

When looking at how the notion of equality fits into the equity theory it is important for organizations to understand that in some cultures this idea is favored. By accepting that some employees may be accustomed to an equality environment, in which everyone gets the same

rewards regardless of individual input, managers may be more prepared to handle conflict or issues that arise within their own organizational culture. Conflict between co-workers could arise if some employees believe in equality, while others follow the equity theory, expecting their individual contributions to be individually rewarded.

The Culturally-Sensitive equity model can be used as a tool for international managers who either have employees, customers, or suppliers in both the Western and Eastern regions of the world. Through the use of this model, these managers can gain a global understanding and have a true appreciation for the various inputs and outcomes that motivate their employees based on orientation and cultural perspectives (Fadil et al., 2005).

Food For Thought...

I worked at a hospital in the patient administrative services department, where I was the youngest worker (at 24 years old). However, my coworkers (three other women) were well into their fifties. We all got along great. I noticed a feeling of inequity between us because I was getting paid more. I did not feel the same inequity as I had experience and the years of schooling required to fill this position. My three coworkers had no formal education, or training for this position. Do you think it was fair that I was being paid more than they were for the same work being done?...Just food for thought ;-)

I worked at the District Court (Summer Only) for 3 summers in a row. There were people both men and women who had been with the company between 5 and 15 years. The administrative assistant went on vacation, there was no back up admin assistant to work while she was away. Many of the long tern employees had never been trained to work the administrative assistant position and had no idea what she did. Everyone was wondering who would get sent to work her spot because the person who did was getting a raise for the time worked. The Division Chief decided to chose me the summer employee to fill her position and when the raise was given I was making more money than many of the permanent full time workers. :)

I worked for an airline as an aircraft mission dispatcher. I worked in a section of a company were I was the only male in the group, and the oldest (by close to five years). I had a dispatching license and many years of experience (with another employer), however none of my coworkers had a license. During lunch one day, one of my coworkers mentioned that they were unhappy with their compensation from the company. They told me how much they were making and it was three dollars more than me! I had no idea that there was such a disparity in our incomes, and I had higher inputs (my previous work experience, and an aviation dispatching license, both of which this employee did not have) to the company, while only lagging behind in years of service. Was I correct in feeling a sense of inequity in this situation? Just food for thought…

References

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Greenberg, J. (1990). Employee theft as a reaction to underpayment inequity: the hidden cost of pay cuts. Journal of Applied Psychology, 5, 561-568.

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2. Need Theories

Needs Theories OverviewNeeds-based motivation theories are based on the understanding that motivation stems from an individual's desire to fulfill or achieve a need. Human beings are motivated by unsatisfied needs, and certain lower needs must be satisfied before higher needs can be satisfied. In general terms, motivation can be defined as the desire to achieve a goal, combined with the energy determination and opportunity to achieve it. This Wiki explores Abraham H. Maslow's Hierarchy of Needs theory, Clayton P. Alderfer's Existence Related Growth (ERG) Theory, and the expansion of David McClelland's Need Theory by Henry A. Murray.

Abraham Maslow

Abraham Maslow was born April 1, 1908, the first of seven born to his poorly educated Jewish immigrant parents. Encouraged by his parents to seek academic success, he began studying law at the City College of New York. After transferring briefly to Cornell, Maslow returned to New York before marrying and moving to the University of Wisconsin. While attending UOW he began his work in psychology, studying the behaviors of rhesus monkeys with Harry Harlow. Though the objective was to study attachment behaviors, Maslow noticed the monkeys’ behavior was driven by different sets of needs. This was the underlining basis for the beginning of his interest in personal need and motivation. (Boeree, 2006) After earning his Bachelor’s, Master’s, and Ph.D. in psychology, Maslow returned to New York where he began teaching at Brooklyn College. Additionally, he served as the chair of the psychology department at Brandeis University from 1951 to 1969, during which time he became involved with Kurt Goldstein and his theory of self-actualization, which ultimately led to the development of Maslow’s own Hierarchy of Needs theory. (Boeree, C. George, 1998, 2006)

Maslow's Hierarchy of Needs

In 1943, Abraham Maslow developed one of the earliest theories of human motivation, commonly referred to as Maslow’s Hierarchy of Needs. In his classic article "A Theory of Human Motivation,” Maslow utilized the term "prepotent" to express the theory that “in the human being who is missing everything in life in an extreme fashion, it is most likely that the major motivation would be the physiological needs rather than any others." (Maslow, 1943, p. 5) Whittington and Evans (2005), referring to that same article, stated that Maslow presented a "prepotent hierarchy in which at least five sets of needs compose the framework." (p.114) The five sets of needs were divided into two categories: basic needs and higher-order needs. The most basic human needs, represented by food, water, shelter, and safety, are considered essential for human existence. Higher-order needs are those associated with social activities, esteem building, and self-actualization or constant self-improvement. Elaborating further on this theory, Whittington and Evans (2005) stated that "each of these needs operates at all times, although one deficient set dominates the individual at any one time and circumstance." (p.114) The motivation experienced by humans to fulfill these needs is either derived from internal or external factors. People who

experience internal motivation are influenced by factors that cause a sense of accomplishment and pleasure, while externally motivated people are commonly influenced by factors controlled by others, such as money and praise. (Deci & Ryan, 1985) Maslow's hierarchy is commonly displayed in a pyramid fashion, with the basic needs at the bottom and the higher needs at the top. The needs were depicted in this way to show the significance of each need on the others, with the most important and broadest category being the physiological needs at the base. (Redmond, 2010)

Basic-Order Needs:

1. Physiological Needs are basic needs that are physiologically necessary for one’s survival, such as oxygen, food, shelter, and sleep. These needs must be met before moving to satisfy needs higher in the order.

2. Safety Needs include the desire to feel safe and secure and to ensure that basic physiological needs will remain met. Examples of this need include shelter or housing, physical ability to defend one’s self, the need to have limits or law (or a conscience), and a regular routine that an individual is comfortable with. Once one’s physiological needs have been met, s/he will move on to the safety needs.

Higher-Order Needs:

3. Social Needs include friendship and companionship. One must know that they are not alone in the world and be able to communicate feelings and needs with other individuals.

4. Esteem Needs - An individual eventually needs to feel that they have a social status. This goes beyond just having social relationships; the individual must feel that in work or at home they are making a contribution.5. Self-actualization Needs - This is the final and highest level of needs. Meeting this need is characterized by continuously focusing on personal growth, problem solving, life appreciation, and peak experiences for oneself. (Huitt, 2004)

Maslow’s concept of self-actualization (SA) represents “everything that one is capable of becoming.” (Value Based Management.net, 2009) When observing SA, it is important to note that the category does not complete Maslow’s Hierarchy of Needs. Many researchers thought that Maslow believed achieving the SA category would result in the completion of the progression. Researchers found this unattainable because SA is elastic; as one nears their SA, their abilities develop and grow which makes their true potential even greater. However, O'Connor and Yballe (2007) indicate that Maslow intended his theory to be “an ongoing process that involves dozens of little growth choices that entail risk and require courage.” (p. 742)

Maslow believed that in order for the higher-order needs to be successfully met and not affect basic needs, an individual must first acquire the basic-order needs, referred to as fulfillment progression. (Redmond, 2010)

Clayton P. Alderfer

Clayton P. Alderfer, born September 1, 1940, earned his B.S. degree in 1962 at Yale University and his Ph.D. in 1966. Alderfer has contributed greatly to Applied & Professional Psychology though his instruction at Cornell University, Yale University, and Rutgers University. Early in his career, while studying needs in organizations, he formulated the Existence, Relatedness, and Growth (ERG) Theory, for which he is best known. He went on to serve a fourteen-year term as editor of the Journal of Applied & Behavioral Science, and his contributions to the field of organization psychology have been recognized though various awards; namely, the Harry Levinson Award for Excellence and the Janet Helms Award. (Rutgers, 2010) Today, Clayton P. Alderfer continues to contribute to organizational psychology through his self-established consulting firm, Alderfer & Associates. (Alderfer, 2010)

Alderfer's ERG Theory

Clayton P. Alderfer first presented the ERG Theory of Motivation in 1969 in his article, "An Empirical Test of a New Theory of Human Need.” The ERG theory attempted to improve upon Maslow's needs hierarchy by allowing more flexibility of movement between needs. Alderfer decreased the number of levels and allowed the order of the needs to vary by the individual; he also allowed for different needs to be pursued simultaneously. Needs were separated into three separate categories:

1. Existence Needs: Physiological and safety needs, the most concrete of needs, such as food, shelter, and water.

2. Relatedness Needs: Social relationships and external esteem (e.g. involvement with family, friends, co-workers)

3. Growth Needs: Internal esteem and self-actualization, the most abstract of needs as they do not involve physical aspects. (e.g. desire to be creative or productive)

While Maslow’s theory was interpreted as portraying that satisfied needs are no longer a motivation (O’Connor & Yballe, 2007), Alderfer’s ERG theory clearly states that all categories of needs can become more important as they are satisfied. Additionally, individuals may place greater emphasis on any single category as opposed to the rigid hierarchy of moving from one need to the next (Alderfer, 1969). The main difference between Maslow's Needs Hierarchy and Alderfer's ERG Theory is the order in which needs are met. Alderfer believed that needs are met simultaneously and in no specific order, while Maslow's theory states that needs are met one by one and in a specific order (Alleydog, 1998). An example of Alderfer's ERG Theory is a “starving artist,” who may place greater emphasis on creating art (growth) than on existence needs like food or shelter. (Redmond, 2010) An employee who seeks a promotion or increased responsibilities may be attempting to satisfy all needs by increasing pay (existence), developing a larger social network (relatedness), and increasing self-esteem (growth).

The following illustration depicts Alderfer’s ERG theory. Notice as one progresses from existence needs through relatedness needs to growth needs, s/he experiences satisfaction. However, regression through the needs levels results in frustration. The idea of frustration-regression is explained as reverting to a lower level need when a higher level need is not met. (Redmond, 2010) Along the same lines, Borkowski (2009) theorized that a person “regresses” to lower needs to once again achieve a feeling of satisfaction.

(Redmond 2010, p. 6)

There are, however, exceptions to frustration-regression. According to Brian Redmond, from the Pennsylvania State University, there are two exceptions to frustration-regression. The first exception is "failure to fulfill existence needs leads to greater existence." (Redmond, 2010) An example of the first exception is if one needs to sleep and is unable, s/he will develop a larger,

more powerful need for sleep. The second exception to frustration-regression is "fulfillment of growth needs leads to greater growth needs." (Redmond, 2010) An example of this would be winning the lottery; if one wins the lottery, one will then need to pursue increased wealth.

Maslow did realize that not everyone followed his pyramid of needs. While there are many types of people and personalities, introversion and extroversion are common distinctions. Huitt (2004), created the following chart to represent the collaboration of both Maslow's and Alderfer's theories, with levels of introversion and extroversion.

Huitt, W. (2004). Maslow's Hierarchy of Needs. Retrieved from: [http://ways-ahead.net/meditation/037-2-Maslow.pdf]

David McClelland

David McClelland, born May 20, 1917, earned his doctorate at Yale University in 1941. He became a major contributor to the study of human personality and motivation in both education and industry. McClelland contributed to education through his instruction at Wesleyan University, Harvard, and Boston University. He contributed to industry through McBer, the consulting agency which he started in 1963 and which helps managers to assess and train employees. McClelland is best known for his work on achievement motivation models and their practical applications, namely the Thematic Apperception Test and Need Theory. (Chapman, 2009)

McClelland's Need Theory

In his 1961 book, The Achieving Society, David McClelland identified three types of motivational needs, on which he based a model to describe one’s style with regard to being motivated and motivating others, depending on the different level of needs within the individual. There are a few distinct characteristics possessed by individuals with each need.

McClelland's Needs:

Achievement Motivation (nACH) - Those with a high need for achievement are attracted to situations offering personal accountability; set challenging, yet attainable, goals for themselves; and desire performance feedback. (Stuart-Kotze, 2009)

Authority/Power Motivation (nPOW) - Individuals with a need for authority and power desire to influence others, but do not demonstrate a need to simply have control. These individuals possess motivation and the need to increase personal status and prestige.

Affiliation Motivation (nAFF) - Finally, those with a need for affiliation value building strong relationships, admire belonging to groups or organizations, and are sensitive to the needs of others. (Stuart-Kotze, 2009) This type of person is a team player and wants to be respected and liked.

According to McClelland, most people possess and portray a mixture of these characteristics. Some people display a strong bias toward a particular motivational need which, in return, influences their behavior and influences their working/management style. McClelland believed that those who resembled the "affiliation motivation model" had diminished objectivity as a manager. He attributed this weakness to their need to be accepted and liked, which can impair decision making. A person who fits the "authority motivation model" is more devoted to an organization, and also possesses a better work ethic. Those who seek power within a leadership role may not even know how to get along with others and how to compromise. Lastly, individuals who fit the "achievement model" are more likely to be overachieving and overbearing (Accel-team.com, 2010). These types of people prefer tasks that are challenging and also prefer to work alone. McClelland also believed that an individual's need grouping changes as they grow, and those who do not naturally possess specific needs can acquire them through training and experience (Mendenhall, Punnett & Ricks, 1995).

Figure: Distribution of Need Behaviors, Typical behaviors associated with motivational type. (Adapted from Swenson, 2000)

Research on Need TheoriesResearch on Maslow's Hierarchy of Needs

Maslow’s Needs Theory has remained popular regardless of the lack of scientific support. Many of Maslow’s concepts have been entirely refuted or only partially validated (Wahba, Bridwell, 1976). Part of the difficulty lies in the definitions and measurements involved in the studies. Maslow based his theory more on clinical insight as opposed to developing it from rigorous scientific research. There have been attempts to use empirical data to disprove Maslow’s Hierarchy of Needs as a legitimate explanation for the motivation of human behavior (Hunter, Rauschenberger, & Schmitt, 1990). Hunter et al (1990) takes issue with the inability for these theories to be substantiated by statistical analysis of data collected by way of surveys/questionnaires. Some partial evidence exists for the support of the lower order needs, physiological and safety, while the concept of self-actualization suffers from vague definitions and scant empirical evidence (Wahba and Bridwell, 1976). These issues make the theory difficult, if not impossible, to test.

Some of the value of Maslow’s Needs hierarchy lies in its intuitive appeal. Regardless of the lack of support, practitioners continue to use the concept of needs satisfaction to motivate and improve

individual performance. The case study by Cangemi (2009) demonstrates one instance of how the concept of needs can provide a framework for front line managers to change employee behavior. The managers’ awareness of employee needs and the possibility of these needs changing over time enabled them to modify their management style to improve organizational outcomes. The important thing to remember is that individuals have varying needs and managers can leverage those needs to increase employee motivation.

Research on Alderfer's ERG Theory

Alderfer’s ERG needs theory has slightly more research support than Maslow. ERG states that any or all needs can be activated simultaneously. Wanous and Zwany (1977) point out that the validity of the hierarchical structure of ERG theory is supported by research. Few people in their study demonstrated a low or moderate need for relatedness or existence while demonstrating a high need for growth. Furthermore, the authors contend that ERG suggests “moderated relationships between need satisfaction and importance for Relatedness and Growth, but not Existence" (p. 95).

Hunter, Rauschenberger, & Schmitt (1990) used a “modified version of Alderfer’s E.R.G. Need Questionnaire” in tandem with a Markov model to study the strength of needs theories. While acknowledging that Alderfer considered his theory to be flexible, the study concluded only minimal support for the theory because of the difficulty in validating the predictions that certain behaviors and needs are interrelated and can be predicted using Alderfer’s own measurement tools. Because the study used these same tools to collect data and the predictions did not come to fruition, the authors concluded dis-confirmation (pg. 669).

In June 2002, CA. Arnolds and Christo Boshoff conducted a study to "determine the influence of need satisfaction (as suggested by the Alderfer theory) on self-esteem (the personality trait) and the influence of self-esteem on performance intention (the surrogate measure for job performance) of top managers and front-line employees" (Arnolds &Boshoff, 2002). Arnolds & Boshoff (2002)study found the following:

The need theories have been the focus of much of the research on motivation (Stahl, 1986: 39), because they have been seen as among 'the most enduring ways to understand motivation' (Aram and Piraino, 1978: 79). Need theory suggests that employees are motivated to increase their job performance by their individual striving to satisfy certain needs. Understanding what the needs are and how they are satisfied will enhance insight into work-related behaviors that increase job performance (Stein and Hollowitz, 1992: 20). To this end, the need theory of Alderfer (1967, 1969) has been selected to assess the influence of need satisfaction on job performance of top managers and front-line employees (p. 698).

The study wanted to show that when a person's self-esteem is enhanced by fulfilling certain needs, job performance and motivation improve. The results of the study concluded that self esteem does have a great influence on job performance on both managers and front-line employees.

Research on McClelland's Need Theory

McClelland used the Thematic Apperception Test (TAT) to measure motivation under the impression that motivation was a more efficient predictor of achievement than intelligence. In the TAT, subjects are shown pictures of ambiguous scenes and asked to create a story based on the pictures. The theory on the TAT is that the content of the subject's story will reveal the individual’s needs, attitudes, and behavioral patterns. The TAT was developed during the 1930s by American psychologists Henry Murray and Christiana D. Morgan at Harvard while exploring the underlying force of personality. Such forces included internal conflicts, dominant drives, interests, and motives. McClelland and his associate created a scoring system to measure an individual’s score for each motivational model. The score assigned can infer the types of jobs the person is best suited for. The TAT is the only tool that has been discovered to quantify implied motivation accurately.

When studied by other researchers, Mclelland’s theory has found support, with an emphasis on the need for achievement. For example, a meta-analysis performed by Stewart and Roth (2007) found that entrepreneurs typically had higher needs for achievement than did managers. The autonomy and challenging demands of entrepreneurship are conducive to satisfaction of this need. In addition, Park, Lee, and Kabst (2008) demonstrate that achievement, affiliation, and power needs are important predictors in organizational commitment (OC) and job involvement (JI). Those with strong achievement needs demonstrate higher levels of performance and are more goal-oriented. While both average and above average employees exhibit similar needs profiles, the need for achievement is higher for those with higher OC and JI. Value can be found in Mclelland’s theory but determining the levels of individual needs and subsequently matching those needs to a job situation presents a challenge for practitioners.

Strengths and Weaknesses of Need TheoriesMaslow's Hierarchy of Needs

The biggest strength of Maslow’s need theory relates to its intuitive nature. Intuitive nature is the awareness of emotions. It is this strength that supports practitioners in using the theory despite the lack of supportive evidence (O’Connor & Ybatel, 2007). Each person has an individual motivational framework which they work and behave; this framework differs from person to person and even for a single individual from day to day (Redmond, 2010). Practitioners of the theory, those who put it into practice when working within their organizations, understand this flexible, individualized theory as a dynamic solution to motivating members of an organization. Another strength of Maslow's theory is the fact that it focuses on the individual's own constructs and experiences instead of focusing on the mentally ill.

Weaknesses, on the other hand, stem from the difficulty of being able to support the theory empirically (Wahba & Bridwell, 1976). Because of the lack of specificity included in Maslow’s theory, it is easily applied in various ways making it difficult to test and study. Moreover, just as norms between individuals fluctuate, so do norms between cultures. Elements like esteem and self-actualization may have vastly different meanings across different cultures making it difficult to standardize Maslow’s theory and the definitions of the components. Maslow's Heirachy of Needs Theory was developed by American theorists and research was done only with Americans. Different culturers often value differerent needs. In collective socieites, or societies in which family members and other in-group members look after earch other in exchange for loyalty, belonging is a basic need while self-esteem is less important (Ciani and Gambrel, 2003). Therefore, researech supports the notion that Maslow's hierarchy may not accurately represent individiual needs in a collective culture. Another weakness to Maslow's theory is the fact that there are exceptions to the theory. For example, what about the firefighters, policemen, and the military, who risk their lives, everyday, to save others. This exception show that there are certain types of people who sacrifice their own basic needs for the welfare of others.

Some believe that Maslow himself saw the weaknesses of his theory later in his life. Many believe that Maslow intended to modify his theory by adding a sixth need on top of his pyramid - above self-actualization. This is the need of self-transcendence and would address issues with religion and putting others safety above one's own. Maslow believed what he called "transcenders" would be highly religious people - regardless of their chosen religion, an indication that he thought of his theory had multi-cultural applications. Regarding cultural differences, he stated, "Culture is definitely and absolutely needed for their actualization; but also culture can fail to actualize them, and indeed this is just what most known cultures actually seem to do and to have done throughout history." (Maslow, Farther Reaches of Human Nature, 326). He believed that transcendence and striving for these types of needs were instinctive to every human. Maslow also believed that transcenders strived for exciting and elaborate situations, called "peaks". The need to reach these peaks could explain why some people perform certain jobs such as policeman or firefighter in which they put their lives at risk for others. "For the transcenders, peak experiences and plateau experiences become the most important things in their lives, the high spots, the validators of life, the most precious aspect of life" (Maslow,Farther Reaches of Human Nature, 283).

Maslow's book, Farther Reaches of Human Nature, published after his death, convinced others that he had intended to modify his pyramid. Mark Koltko-Rivera states that "considering the construct of self-transcendence can help us better understand the motivational underpinning of both altruism

and religious violence, as well as human wisdom" (Koltko-Rivera, 2006). Many believe that his theory should not only be altered to include this new need, but also that textbooks and other educational sources should be updated as well.

Alderfer's ERG Theory

The biggest strength of Alderfer’s ERG Theory is the dynamic nature of the theory (Hunter, Rauschenberger, & Schmitt, 1990). The ERG Theory recognizes that people are different and there are variables that can affect the needs of an individual on any given day or any stage of life. The ability to explain a person’s needs on any given day in a way that is measurable using Alderfer’s Need Questionnaire allowing a predictive response from management is an enormous benefit to organizations.

Unfortunately this flexibility also serves as a weakness in tandem with a lack of research (Hunter, Rauschenberger & Schmitt, 1990). As in any science, critics want to see the facts based on research. Minimal research leads to skepticism of the actual worth of the theory. The ERG theory allows individuals to simultaneously satisfy any of the needs, to know this you would have to assess the individual to see what motivated the person to behave a certain way and then determine what need was most important to the person. Measurement of this information may be very difficult to obtain because much time would need to be spent with the subject. Additionally, the freedom for individuals to move amongst the needs can lead to frustration-regression where needs are not being properly met resulting in a negative move to a lower need with less productivity (Value Based Management.net, 2009).

McClelland's Need Theory

David McClelland’s theory is regarded as more useful than those of Maslow and Alderfer (McClelland, 1965). This is because there is much more empirical evidence to support McClelland's Needs Theory than Maslow's or Alderfer's. Unlike the previous theories, McClelland believed that needs were not innate but learned at a young age and could also be developed in individuals. McClelland developed training programs for managers to increase their need for achievement. This need correlates well with positive organizational behaviors and performance. While other needs theories are more descriptive, McClelland offers a better mix of description and prescription enabling organizations to proactively encourage beneficial corporate behavior through both training programs and matching motivational needs with job situations. However, critics of McClelland's theory state that there are issues with the validity concerning the TAT projection used to determine the level of individual needs (Redmond, 2009).

McClelland’s theory is criticized for its lack of predictive power as it relates to entrepreneurship. The decision to own or manage a business is not directly correlated with the need for achievement as there are many factors that drive people to become entrepreneurs (Kapp, Smith-Hunter, & Yonkers, 2003). Also, differences in cultures play a significant role in how achievement is viewed. Some cultures view failure as a learning experience that allows the opportunity to grow and

become stronger in areas that caused the setback, while other cultures focus on the regressive side of failing to achieve.

Application of Need Theories in the WorkplaceMaslow's Hierarchy of Needs

Maslow's theory still has implications in the modern day workplace. If a manager or organization understands that lower-level needs must be met before a person can satisfy higher-level needs, the manager or organization is better positioned to meet those needs, and in the order they must be met. For instance, physiological needs can be met by offering a fair competitive wage, so that the employee feels comfortable that his/her basic needs will be cared for. Next, a company can ensure that the work facility is safe, so an employee may feel physically safe. The company can also have a fair progressive discipline policy ensuring job security. Also, the employer can encourage employees to participate on work teams and/or sponsor informal gatherings so employees may socialize to help meet their social needs. A rewards and recognition program for good performance, perfect attendance, and similar programs could help satisfy the employee’s esteem needs. Finally, to help satisfy employees’ self-actualization needs, companies can offer in-house development, or offer reimbursement for tuition or relevant training seminars. There are many possibilities for applying these needs to drive worker's motivation. It may not always be very clear what needs to be done, but this is why it's important for managers to understand these needs theories so that they can apply them when the opportunity arises. As stated by NetMBA, "the manager must be able to recognize the needs level at which the employee is operating, and use those needs as levers of motivation."(2010)

> Example Case of Application of Maslow's Hierarchy of Needs in the Workplace:

This case provides an example of the conceptual model of Maslow’s theory applied to a real situation. The managers at the plant were mostly engineers, accountants, and chemists and had little to no training in human behavior. This model presented them with a blueprint to address the issues of lost productivity and disgruntled workers. The managers now understood the reason behind the employees’ behavior and the actions necessary to change that behavior.

This case describes a consultant who presented Maslow’s theory to the management team of a large manufacturing plant. The needs of the labor force had changed over the years and the old management techniques showed little regard for the employees and were causing unrest after 20 years of peace between labor and management. The needs of the older employees, who were largely illiterate or possessed little education, were on a lower level of Maslow’s scale, namely the survival levels of physiological and safety needs. They just wanted a paycheck to survive. A newer generation of workers entered the plant and the strong arm management approach met resistance. New workers had a higher education level and no longer sought satisfaction of their lower level survival needs. The newer generation came to the plant with needs involving

recognition, fulfillment, and personal growth, which correspond to the higher level needs of Maslow’s scale. After presenting his findings to the company’s leadership, the situation had improved significantly at the manufacturing facility (Cangemi,2009).

> Example Case of Application of Maslow's Hierarchy of Needs in the Workplace:

A study done by James R. Lindner, a research associate of Ohio State University, about employee ranked motivation factors in correlation with Maslows and others theories of needs and motivation. "Specifically, the study sought to describe the ranked importance of the following ten motivating factors: (1) job security, (2) sympathetic help with personal problems, (3) personal loyalty to employees, (4) interesting work, (5) good working conditions, (6) tactful discipline, (7) good wages, (8) promotions and growth in the organization, (9) feeling of being in on things, and (10) full appreciation of work done. A secondary purpose of the study was to compare the results of this study with the study results from other populations." Twenty-three employees of the twenty-five employees of the company being researched participated in the study. The following needs, in order of high ranking to low ranking, were found to be motivational factors of these workers: interesting work, good wages, full appreciation of work done, job security, good working conditions, promotions and growth in the organization, feeling of being in on things, personal loyalty to employees, tactful discipline, and sympathetic help with personal problems. When comparing these to Maslow's model, it is interesting to see the relationship; interesting work- self-actualizing factor, good wages- physiological factor, full appreciation of work done- esteem factor, job security-safety factor (Lindner, 1998).So this study shows that Maslow's theory and other needs theories can be applied in some situations.

Alderfer's ERG Theory

In the workplace managers must recognize that an employee has multiple needs to satisfy simultaneously. According to the ERG Theory, focusing exclusively on one need at a time will not effectively motivate employees to do their job. The ERG Theory acknowledges that if a higher level need remains unfulfilled the person may regress to lower level needs that they can more easily satisfy. This frustrates employees and impacts workplace motivation until the higher need can be fulfilled.

It is important to realize that there are differences between Maslow's theory and Alderfer's ERG Theory. One of the main differences is that the ERG Theory states that an individual needs to satisfy several motivators at the same time; therefore, an employer who only tries to satisfy one need at a time will not be effective in motivating their employees.

Another important aspect of the ERG theory to look at in a management position is the frustration-regression principle. This principle explains that without opportunities to advance, employees may regress and end up satisfying other needs, like socializing with co-workers. It is important for those in leadership positions to realize the possibility of regression and provide room for growth and socialization with their employees (Envision Software Incorporated, 2007).

> ERG Example Case Study:

In a case study that was done in a real estate organization, the ERG Theory was upheld and reinforced when the employees were unable to attain the higher level needs and as a result they regressed to the lower level needs to attain fulfillment.

In this study, the real estate organization hired new finance managers with the hope that they could replace the managers that had been in these positions who were not performing satisfactorily. The new finance managers were satisfied with the existence needs (salary and working conditions) and within a short time were satisfied with relatedness needs (rapport within the departments and management). Within six months of employment the finance managers became frustrated due to upper management not trusting them to complete a task without supervision. As a result of this the finance managers regressed back to lower level needs and asked management for new titles and larger offices. Management granted the request to appease the finance managers as they had been complaining to upper management. While the existence and relatedness needs of the Finance Mangers were met, they could not achieve their growth needs so they placed more emphasis on the lower level needs (Buhler, 1988).

McClelland's Need Theory

By understanding and being able to effectively measure need for affilliation (nAff), need for power (nPow), and need for achievement (nAch) characteristics in employees, employers have the opportunity to make better decisions of which type of employees to put in various positions. For instance, since people with a high need for achievement have a high need for personal improvement and success, an employee with a high nAch may not be best suited for a receptionist position without any opportunity for advancement or growth. Conversely, someone with a high nAff might be the perfect person for a receptionist position. McClelland’s Need Theory suggests that understanding these needs and accurately placing the right people in the right positions should yield greater levels of motivation which, in turn, should increase productivity and reduce turnover.

When it comes to management, McClelland's theory can prove to be very beneficial. It is important to realize that people are motivated differently. Some individuals have a high need for achievement and should be given difficult and challenging projects. Employees with a need for high achievement should be given frequent feedback. Individuals with a high need for affiliation need to work in a cooperative environment. They enjoy working in groups or teams and will be very productive in those circumstances. Those who have a need for power should be given the opportunity to manage others. In group projects the management should deem them the leader of the group, especially with those who have a need for affiliation. This presents a great situation that allows for two types of people to be motivated and to work together while each accomplishing their goals and fulfilling individual needs (NetMBA.com, 2007).

McClelland has a high interest in those with the nACH. He finds that people with this high need for achievement fascinating. McClelland had experimented with people to see who belonged to which group and to what degree they may possess more than one. The experiment involved throwing little rings and trying to wrap the little ring around a peg. These games are typically seen in festivals or carnivals. He noticed that those that had the nACH were very much different from the others. McClelland says that those with the nACH were less worried about making it easy like the others. They didn't try to find the easiest way by standing closer or leaning

foward as far as they could just so there was an advantage. He explanes that the nACH would try to make the game even more challenging by standing further away or coming at it at more difficult angles. McClelland believes there is something else going on other than just setting goals and completing them. Some high nACH individuals need to apply more challenge to their lives and every time a challenge is met successfully they need a stronger more challenging task. He calls this the "balanced challenge" and it is use to keep the person in good shape mentally. (Chapman, 2009) This shows why it is a good idea to know what needs a person has to properly motivate them in the right manner and to expect that not all employees are motivated by challenge.

Successful entrepreneurs often rate high in nAch. Some companies have been able to successfully grow the nAch within their workforce. General Electric (GE) is an example of such a company. GE managers are rewarded with praise and financial incentives for fact-based bottom-line numbers. They are grilled on weekly and monthly results. Routinely the bottom ten percent of managers is removed to make room for more people who strive to achieve better performance results. (Hill & McShane, 2008, p. 322)

McClelland suggest that the best managers have a high nPOW. McClelland says, a good manager is one who, among other things, helps subordinates feel strong and responsible, rewards them properly for good performance, and sees that things are organized so that subordinates feel that they know what they should be doing. Above all, managers should foster a strong sense of team spirit among subordinates, of pride in working as part of a team. If a manager creates and encourages this spirit, his or her subordinates certainly should perform better. People with high nACH typically do not find the same type of success in management. McClelland says, "There is no reason on theoretical grounds why a person who has a strong need to be more efficient should make a good manager. While it sounds as if everyone ought to have the need to achieve, in fact, as psychologists define and measure achievement motivation, the need to achieve leads people to behave in ways that do not necessarily engender good management. For one thing, because they focus on personal improvement, achievement-motivated people want to do things themselves. For another, they want concrete short-term feedback on their performance so that they can tell how well they are doing. Yet managers, particularly in large, complex organizations, cannot perform by themselves all the tasks necessary for success. They must manage others to perform for the organization. And they must be willing to do without immediate and personal feedback since tasks are spread among many people."

Recent DevelopmentsMaslow's Hierarchy Revisited

Kenrick, Griskevicious, Neuberg, & Schaller (2010) recently updated Maslow's pyramid of needs to reflect a controversial, yet possibly, a more up to date approach that is based on findings in the

fields of neuroscience, developmental psychology, and evolutionary psychology. While Maslow's pyramid has not always been supported by empirical evidence, it does have several ideas worth maintaining. What it lacks are important facts about human nature that were not fully understood during Maslow's time (Kenrick et al., 2010). Self-actualization, while an interesting and important concept, is no longer viewed as an evolutionary, fundamental need and has been removed from the pyramid (Kenrick et al., 2010) Replacing the concept are three evolutionary motives that researchers believe Maslow did not account for; mate acquisition, mate retention, and sitting at the very top is parenting (Kenrick et al., 2010). In the new pyramid, reproduction of our genes is regarded as one of humankind's most biologically fundamental aspirations. This indicates that the notion of self-actualization, when broken down to its most basic form, is actually a subconscious expression of our evolutionary need to reproduce and raise children (Kenrick et al. 2010).

In addition to this dramatic change in the top of the hierarchy, researchers have reworked the pyramid to reflect an overlapping of needs. This replaces Maslow's initial idea, that once a need is met it disappears and the individual moves on to the next level (Targeted News Service, 2010). However, Maslow's thought process does not account for the idea that a person who has attained a need, and goes on to the next, may find it necessary to revert back to that need (Kenrick et al., 2010). While the basic evolutionary premise of this new pyramid has garnered some agreement among researchers, there are still those who do not share the notion that self-actualization should be removed. Along with that, they also do not agree that parenting should receive such prominence at the top of the pyramid. (Targeted News Service, 2010).

http://esciencenews.com/articles/2010/08/19/maslows.pyramid.gets.a.much.needed.renovation

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