Equity Theory
What is favorable inequity? Unfavorable inequity?
UNFAVORABLE: (OUTCOMESp/INPUTSp) < (OUTCOMESo/INPUTSo) FAVORABLE: (OUTCOMESp/INPUTSp) > (OUTCOMESo/INPUTSo) Secretary A types faster, takes better shorthand, has worked for the company longer, has more experience as a secretary then Secretary B but gets paid less then Secretary B. Secretary A has less outcomes and greater inputs than Secretary B thus Secretary A's ratio is less than Secretary B's ratio. If our focus is Secretary A you have a case of unfavorable inequity. On the other hand, if our focus is Secretary B then you have a case of favorable inequity.
What are the four basic postulates or tenants of equity theory?
1) Individuals strive to create and maintain a state of equity. 2) When a state of inequity is perceived, it creates tension which the individual is motivated to reduce or eliminate it. 3) The greater the magnitude of perceived inequity, the greater is the motivation to act to reduce the state of tension. 4) Individuals should perceive an unfavorable inequity (e.g., receiving too little pay) more readily than a favorable one.
When faced with unfavorable inequity, what are the different ways one can use to restore equity?
1) Reduce quantity of work. 2) Reduce quality of work. 3) Convince boss to give you a raise. 4) Convince your co-worker (comparison other) to reduce his inputs/outcomes. 5) Quit your job. 6) Select a different comparison other (one that gives you a state of equity). 7) Distort your inputs or outcomes. 8) Distort inputs and/or outcomes of your comparison other. *The first five are behavioral changes and the last three are cognitive changes.
What are the problems with equity theory?
MAJOR PROBLEM: Hard to apply on a case-by-case basis 1) Little is known about how people decide with whom to compare themselves (there are a number of different referents available to individuals: professions, co-workers, internal standards, etc...). Different comparison others lead to different perceptions of equity/inequity. 2) Difficult to define inputs and outcomes. What do people consider these to be? For example, one person's outcome (increased responsibility on the job) may be another's input. Changing an input to an outcome or an outcome to an input can change one's perceptions of equity/inequity. 3) Selection of means to reduce inequity is troublesome to predict. There are many different ways to restore equity-person may do it behaviorally or cognitively. The trouble with equity theory is predicting what way the person will chose to reduce the inequity.
Which of the three types listed in the last question is most prevalent? Least prevalent?
Most=Equity Sensitive Very few benevolent
When faced with unfavorable inequity, how do people normally restore equity? (behaviorally or cognitively)
Not through changing their perceptions, but by changing behaviors ` Don't change their mind, they change their behavior!
What is more important in equity theory: perception or reality?
Perception because fair in reality may not be perceived as fair by all
What is the difference between equity and equality?
The other (o) is the referent comparison. The person (p) is the individual with whom you are concerned. EQUITY (OUTCOMESp/INPUTSp)= (OUTCOMESo/INPUTSo) EQUALITY: OUTCOMESp=OUTCOMESo
What is an Entitled? Equity Sensitive? Benevolent? What does each type perceive as fair?
` Entitled - taker wants to do less for more; over-rewarded is fair ` Equity Sensitive - take/give equally; perceives equity as fair ` Benevolent - giver, wants to do more for less; wants to give more than they take; under-rewarded is fair ` Least likely to quit = benevolent b/c so committed & entitled b/c they've got no place to go!
When faced with favorable inequity, how do people normally restore equity? (behaviorally or cognitively)
` Not going to work harder..."if they are paying me this much, I must be worth it"...cognitively ` Overpaying does not motivate people to work harder only makes them think they are better then they really are.
What is the concern of equity theory?
concerned with defining what individuals in our society consider to be equitable (fair) and their reactions to being in situations they perceive as unfair; when individuals perform work in exchange for pay, etc..., they think about what they contribute to the job (inputs) and what they receive for working (outcome).