26 equity will be perceived when the following

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Unformatted text preview: 000 a year. In the case of many job facets, individuals want “what’s fair.” And how do we develop our conception of what is fair? Equity theory states that the inputs that people perceive themselves as investing in a job and the outcomes that the job provides are compared against the inputs and outcomes of some other relevant person or group.26 Equity will be perceived when the following distribution ratios exist: My outcomes Other’s outcomes = My inputs Other’s inputs In these ratios, inputs consist of anything that individuals consider relevant to their exchange with the organization, anything that they give up, offer, or trade to their organization. These might include factors such as education, training, seniority, hard work, and high-quality work. Outcomes are those factors that the organization distributes to employees in return for their inputs. The most relevant outcomes are represented by the job facets we discussed earlier—pay, career opportunities, supervision, the nature of the work, and so on. The “other” in the ratio above might be a co-worker performing the same job, a number of co-workers, or even one’s conception of all the individuals in one’s occupation.27 For example, the president of the Ford Motor Company probably compares his outcome/input ratio with those that he assumes exist for the presidents of General Motors and DaimlerChrysler. You probably compare your outcome/input ratio in your organizational behaviour class with that of one or more fellow students. Equity theory has important implications for job satisfaction. First, inequity itself is a dissatisfying state of affairs, especially when we ourselves are on the “short end of the stick.” For example, suppose you see the hours spent studying as your main input to your organizational behaviour class and the final grade as an important outcome. Imagine that a friend in the class is your comparison person. Under these conditions, the following situations appear equitable and should not provoke dissatisfaction on your part: You C grade 50 hours Friend A grade 100 hours or You A grade 60 hours Friend C grade 30 hours In each of these cases, a “fair” relationship seems to exist between study time and grades distributed. Now consider the following relationships: You C grade 100 hours Friend A grade 50 hours You or Friend A grade 30 hours C grade 60 hours Distributive fairness. Fairness that occurs when people receive what they think they deserve from their jobs. Equity theory. A theory that job satisfaction stems from a comparison of the inputs one invests in a job and the outcomes one receives in comparison with the inputs and outcomes of another person or group. Inputs. Anything that people give up, offer, or trade to their organization in exchange for outcomes. Outcomes. Factors that an organization distributes to employees in exchange for their inputs. 114 Individual Behaviour Part Two In each of these situations, an unfair connection appears to exist between study time and grades received, and you should perceive inequity. However, the situation on the left, in which you put in more work for a lower grade, should be most likely to prompt dissatisfaction. This is a “short end of the stick” situation. Conditions such as this often lead to dissatisfaction in organizational life. For example, the employee who frequently remains on the job after regular hours (input) and receives no special praise or extra pay (outcome) might perceive inequity and feel dissatisfied. Similarly, the teacher who obtains a Master’s degree (input) and receives no extra compensation (outcome) might react the same way if others have been rewarded for achieving extra education. Equity considerations also have an indirect effect on job satisfaction by influencing what people want from their jobs. If you study 100 hours while the rest of the students average 50 hours, you will expect a higher grade than the class average. In summary, the equitable distribution of work outcomes contributes to job satisfaction by providing for feelings of distributive fairness. However, let us remember our earlier discussion of cross-cultural differences in values. The equity concept suggests that outcomes should be tied to individual contributions or inputs. This corresponds well with the individualistic North American culture. In more collective cultures, equality of outcomes might produce more feeling of distributive fairness. In more feminine cultures, allocating outcomes according to need (rather than performance) might provide for distributive fairness. Procedural fairness. Fairness that occurs when the process used to determine work outcomes is seen as reasonable. Procedural Fairness. Procedural fairness (often called procedural justice) occurs when individuals see the process used to determine outcomes as reasonable; that is, rather than involving the actual distribution of resources or rewards, it is concerned with how these outcomes are decided and allocated. An example will illustrate the difference between...
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This note was uploaded on 10/01/2010 for the course FGT mba12ehtp taught by Professor Angwi during the Spring '10 term at Télécom Paris.

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