Motivation II:

Equity,
Expectancy, and
Goal Setting

Chapter Seven

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
 After reading the material in this chapter,
you should be able to:
LO7.1 Discuss the role of perceived inequity in
employee motivation.
LO7.2 Describe the practical lessons derived from
equity theory.
LO7.3 Explain Vroom’s expectancy theory.
LO7.4 Describe the practical implications of
expectancy theory.
LO7.5 Identify five practical lessons to be learned
from goal-setting research.
LO7.6 Specify issues that should be addressed before
implementing a motivational program.
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 Equity Theory
Equity theory
 model of motivation
that explains how
people strive for
fairness and justice in
social exchanges or
give-and-take
relationships

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 The Individual-Organization
Exchange Relationship
An employee’s inputs, for which he expects
a just return, include education/training,
skills, creativity, seniority, age, personality
traits, effort expended, and personal
appearance.

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 The Individual-Organization
Exchange Relationship
On the outcome side the organization
provides such things as pay/bonuses, fringe
benefits, challenging assignments, job
security, promotions, status symbols,
recognition, and participation in important
decisions.

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Negative and Positive Inequity
Negative inequity
 Comparison in which another person receives
greater outcomes for similar inputs.
Positive inequity
 Comparison in which another person receives
lesser outcomes for similar inputs.

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 Dynamics of Perceived Inequity
1. People have varying sensitivities to
perceived equity and inequity
2. Inequity can be reduced in a variety of
ways

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 Negative and Positive Inequity

Figure 7-1

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Thresholds of Equity and Inequity
Equity sensitivity
 reflects an
individual’s
“different
preferences for,
tolerances for, and
reactions to the
level of equity
associated with any
given situation”

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Thresholds of Equity and Inequity
Benevolents
 people who have a higher tolerance for
negative inequity prefer their outcome/input
ratio to be lower than ratios from comparison
others
Sensitives
 adhere to a strict norm of reciprocity and are
quickly motivated to resolve both negative and
positive inequity

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Thresholds of Equity and Inequity
Entitleds
 have no tolerance for negative inequity
 expect to obtain greater output/input ratios than
comparison others and become upset when
this is not the case.

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 Organizational Justice
Distributive justice
 The perceived fairness of how resources and
rewards are distributed.
Procedural justice
 The perceived fairness of the process and
procedures used to make allocation decisions.
Interactional justice
 quality of the interpersonal treatment people
receive when procedures are implemented.

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 Question?
Employees at Globe Trade have always felt
that resources and rewards are allocated
unfairly at work. Such employee
perceptions reflect _________.
A.Distributive justice
B.Interpersonal justice
C.Equitable justice
D.Procedural justice

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 Practical Lessons from Equity
Theory
No matter how fair management thinks the
organization’s policies, procedures, and
reward system are, each employee’s
perception of the equity of those factors is
what counts.
Managers benefit by allowing employees to
participate in making decisions about
important work outcomes

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 Practical Lessons from Equity
Theory
Employees should be given the opportunity
to appeal decisions that affect their welfare.
Managers can promote cooperation and
teamwork among group members by
treating them equitably

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 Practical Lessons from Equity
Theory
Employees’ perceptions of justice are
strongly influenced by the leadership
behavior exhibited by their managers
Managers need to pay attention to the
organization’s climate for justice.

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 Question?
At work, if Jamal's outcome to input ratio is
greater than that of Tony's (his relevant co-
worker), Jamal will experience
A.Equity.
B.No satisfaction.
C.Positive inequity.
D.High dissatisfaction.

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Expectancy Theory of Motivation
Expectancy
theory
 Holds that people
are motivated to
behave in ways that
produce valued
outcomes.

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 Vroom’s Expectancy Theory
Motivation boils down to the decision of how
much effort to exert in a specific task
situation.

Expectancy
 represents an individual’s belief that a particular
degree of effort will be followed by a particular
level of performance.

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 Expectancy
The following factors influence an
employee’s expectancy perceptions:
 Self-esteem.
 Self-efficacy.
 Previous success at the task.
 Help received from others.
 Information necessary to complete the task.
 Good materials and equipment to work with

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 Vroom’s Expectancy Theory
Instrumentality
 A performance  outcome perception
Valence
 the positive or negative value people place on
outcomes
Outcomes
 different consequences that are contingent on
performance

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 Question?
Niles believes that he will be promoted if he
meets his sales goals. This is his
___________ perception.
A. Expectancy
B. Instrumentality
C. Valence
D. Outcome

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 Managerial and Organizational
Implications of Expectancy Theory

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 Managerial and Organizational
Implications of Expectancy Theory
Some workers value interesting work and
recognition more than money
Extrinsic rewards can lose their motivating
properties over time and may undermine
intrinsic motivation

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 Question?
Dana believes in designing challenging jobs
for her employees. This is an implication of
_________ theory.
A. Equity
B. Motivation
C. Expectancy
D. Reinforcement

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Goals: Definition and Background
Goal
 what an individual is trying to accomplish
 object or aim of an action

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Goals: Definition and Background
Management by objectives
 management system incorporating participation
in decision making, goal setting, and feedback

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 How Does Goal Setting Work
Goals direct attention
Goals regulate effort
Goals increase persistence
Goals foster the development and
application of task strategies and action
plans

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 Insights from Goal-Setting
Research
1. Specific high goals lead to greater
performance
 Goal specificity – quantifiability of a goal
2. Feedback enhances the effect of specific,
difficult goals
3. Participative goals, assigned goals, and
self-set goals are equally effective.

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 Insights from Goal-Setting
Research
4. Action planning facilitates goal
accomplishment.
 Action plan outlines the activities or tasks that
need to be accomplished in order to obtain a
goal.
5. Goal commitment and monetary incentives
affect goal-setting outcomes
 Goal commitment – extent to which an
individual is personally committed to achieving
a goal
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 Question?
Julia wants to become a successful heart
surgeon. This reflects Julia's
A. Expectancy
B. Perception
C. Goal
D. Personality

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 Practical Application of
Goal Setting
Step 1: Set goals
 Use time and motion studies, average past
performance, benchmarking
 Should be SMART

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 Practical Application of
Goal Setting
Two additional recommendations:
1. For complex tasks, managers should train
employees in problem-solving techniques
and encourage them to develop a
performance action plan

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 Practical Application of
Goal Setting
2. Because of individual differences, it may be
necessary to establish different goals for
employees performing the same job.

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Guidelines for Writing
SMART Goals

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 Practical Application of
Goal Setting
Step 2: Promote goal commitment
 Involve employees in the goal setting and
action planning process
 Have managers explain the rationale behind
higher level goals

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 Practical Application of
Goal Setting
Step 3: Provide support and feedback
 ensure that each employee has the necessary
abilities, training, technology/equipment, and
information needed to achieve his or her goals

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 Question?
Jim is the manager of a sales team at Woo
Automotive. He expects his salespeople to
sell 250 cars per week. Which guideline for
writing SMART goals does this violate?
A. Specific
B. Measurable
C. Attainable
D. Time-bound

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 Video Case: Hot Topic
What unique features does the culture at Hot
Topic have? How do these features contribute
to their success?
What benefits do you like that are offered by
Hot Topic? Are they different than the benefits
you have heard about from your parents or
others?
How does Hot Topic keep itself current with
what its customers and employees want?

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Video Case: Motivation Convention
Are people fundamentally different today than in
the past? Why do workers need to be “buttered
up” more today?
What are some different types of incentives
employees are given today to “motivate” them?
What have you received in terms of different
incentives from your employers?
Why is motivating employees so important - do
you think it makes that big of a difference?

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