Page 245 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes New Perspective on Equity Theory
Since the original formulation of the theory, a number of revisions have been made in light of
new theories and research. One important theoretical revision proposes three types of individuals
based on preferences for equity.
1. Equity sensitives are those people who prefer equity based on the originally formed
theory.
2. Benevolent are people who are comfortable with an equity ratio less than that of his or her
comparison other.
3. Entitled are people who are comfortable with an equity ratio greater than their comparison
to the other.

Implications for Managers: Equity theory makes several helpful suggestions to supplement the
recommendations of expectancy theory.
1. Managers need to maintain two-way communication with subordinates so that they have
some idea of subordinates' equity perceptions.
2. It is important to let subordinates know the "rules" that will govern the allocation of
outcomes related to inputs. This issue is closely related to the expectancy theory
recommendation that the relationship between performance and outcomes be made clear
to subordinates.
3. A pattern of inequalities over a period of time can build into major difficulties, which is
another reason for maintaining good communication with subordinates, superiors, peers,
customers, and other individuals associated with the job.
11.3.5 Expectancy Theory

Whereas Adam's theory of inequity focuses on a social process, Victor H Vroom's expectancy
theory of motivation focuses on personal perceptions. His theory is founded on the basic notions
that people desire certain outcomes of behaviour, which may be thought of as rewards or
consequences of behaviour, and that they believe there is a relationship between the efforts they
put forth, the performance they achieve, and the outcomes they receive. In its simplest form,
expectancy theory says that a person's motivation to behave in a certain way is determined by
1. Outcomes the person sees as desirable, and
2. The person's belief that these desired outcomes can be attained.
The key constructs in the expectancy theory of motivation are:

1. Valence: Valence is the value or importance one places on a particular reward. The valance
of an outcome is positive when the individual desires it and negative when he or she
wishes to avoid it; valances are therefore scaled over a wide range of positive and negative
values.

2. Expectancy: Expectancy is the belief that effort leads to performance, for example, "If I try
harder, I can do better". Expectancy refers to the perceived relationship between a given
level of effort and a given level of performance. People attach various expectancies to an
outcome. Competent and secure individuals tend to perceive expectancy more positively
than incompetent and pessimistic individuals.
3. Instrumentality: Instrumentality is the belief that performance is related to the rewards.
For example, "If I perform better, I will get more pay". Instrumentality ranges from – 1 to
+ 1 (belief that one desired outcome is attainable only without the other) through 0 (belief

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