Concept and Brief Description
Employee judgment about pay fairness. The book states that Equity Theory tells organizations that employees care about their pay relative to what others are earning and that these feelings are based on what the employee perceive.
Emotional Hook
I followed my boss to a new startup company. My new coworker had done the same with her boss. We were both directly under the CEO and CFO. We had the same amount of experience. We worked the same hours and initially performed the same tasks. At a certain point, she was content to stick with data entry, but I took the initiative to add new tasks to my job and create more responsibility for myself. After about a year, the workload was no longer fair. I was fully in charge of accounting and supervised 4 employees while she was a data entry associate, but we were still being paid an equal wage. When I inquired or complained, I was viewed as a “troublemaker.” My input was no longer equal to my output. My responsibilities had greatly increased, but my wages stayed the same as a data entry person. And I was inadvertently threatened with a job loss if I complained.
Key Points
In the book, it states that employees typically respond to equity/inequity by: Putting forth less effort (reduce input), find ways to increase outcomes (stealing), or withdraw by leaving the organization.
Facilitative Question
How can jobs be defined in such a way that it is clear to the employee how a raise can be earned? In what ways can a company plan and develop a career path that includes compensation packages so that employees feel motivated to continue striving towards and excellence and working towards greater opportunity?
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