Equity theoryis usually associated with J. Stacy Adams (a behavioural scientist working at the General Electric Company) who put forward the first systematic account (Adams, 1963) of the idea that fairness in comparison with others influences motivation. People like to be treated fairly and compare what they put into a job (effort, skill, knowledge, etc.) with the re- wards they receive (pay, recognition, satisfaction, etc.). They express this as a ratio of their input to their reward. They also compare their ratio with the input-to-reward ratio of others
F = (E → P) × (P → O) × V
•Feedback
•Appraisal policies
•Transparency and predictability of reward policies
•Training
•Role clarity
•Facilities/support Figure 15.6
Organisational practices affecting subjective probabilities
Management in practice Employee ownership at Child Base Nurseries
www.childbase.com
Equity theoryargues that perception of unfairness leads to tension, which then motivates the individual to resolve that unfairness.
Mike Thompson established Child Base Nurseries in 1989, and the company now operates (in early 2010) 38 nurseries in the South of England. Being a network helps staff development, as the nursery nurses can move up a career change – the company’s operations director began as a nursery worker. The company is privately owned by the employees, who can buy shares from the Thompson family holding – which is now down to about 28 per cent. The family can only sell its shares to the Employee Benefit Trust which adminis- ters the share scheme. The company’s legal rules make it clear that Child Base is established for the benefit of employees – past, present and future.
Mr Thompson believes strongly in the principle of employee ownership – he could have made more money by selling his shares in the business to external investors. He says:
You get where you are in business because of other people. Why not put the business back in the hands of the people who helped build it?
Source: Financial Times, 22 April 2009.
469 PROCESS THEORIES OF MOTIVATION
whom they consider their equals. They expect management to reward others in the same way, so expect the ratios to be roughly equal. The formula below sums up the comparison:
Input (A) Input (B) Reward (A) :
Reward (B)
Person A compares the ratio of her input to her reward to that of B. If the ratios are simi- lar she will be satisfied with the treatment received. If she believes the ratio is lower than that of other people she will feel inequitably treated and be dissatisfied.
The theory predicts that if people feel unfairly treated they will experience tension and dissatisfaction. They will try to reduce this by one or more of these means:
Reducing their inputs, by putting in less effort or withholding good ideas and suggestions
Attempting to increase their outcomes, by pressing for increased pay or other benefits
Attempting to decrease other people’s outcomes by generating conflict or withholding information and help
Changing the basis of their comparison, by making it against someone else where the inequity is less pronounced
Increasing their evaluation of the other person’s output so the ratios are in balance.
As individuals differ, so will their way of reducing inequity. Some will try to rationalise the situation, suggesting that their efforts were greater or lesser than they originally thought them to be, or that the rewards are reasonable. For example, a person denied a promotion may decide that the previously desired job would not have been so advantageous after all.
Members may put pressure on other members of the team whom they feel are not pulling their weight. Some may choose to do less, so bringing their ratio into line with that of other staff.
Tim Smit on work at Eden:
To work at Eden you’ve got to be interested in a lot of stuff. You’ve got to be prepared to catch people when they fall, because people are trying stuff all the time, and you’ve got to be prepared for the unexpected because part of the way we work is almost deliberately create chaos by doing more stuff than we’ve possibly got time to do, which means more junior members have more chance to become leaders because the senior ones can’t do it all.
One of the things I think is very special about Eden is that the letters after your name don’t make any difference. It’s what you can do . . . Sure the Finance Director’s got to be an accoun- tant and all that sort of stuff, but in the wider scheme of things, to be an Eden person you’ve got to be optimistic and smiley and damned hard working.
Case study
Gayle Conley adds:
We try not to be prescriptive about defining tal- ent and we try to encourage people to take indi- vidual responsibility for their own career path here as much as we can help them to a career path
Jess Ratty speaks about her work:
I began at Eden as a waitress when I was 16 years old with no qualifications: I’m now 24 and the Press Officer. So I’ve worked in about eight departments and worked my way up through the company. I think Eden’s been a fan- tastic opportunity for me – the ethos and the way you don’t have to have a degree – you know they’ll give people a chance . . . after working as a waitress I moved to the Stewards team where I learnt a lot about dealing with people. I worked
Eden – the case continues www.edenproject.com
Clearly the focus and the components of the comparisons are highly subjective, although the theory has an intuitive appeal. The subjective nature of the comparison makes it difficult to test empirically, and there has been little formal research on the theory in recent years (though see Mowday and Colwell, 2003). There is, however, abundant anecdotal evidence that people compare their effort/reward ratio with that of other people or groups.
Edwin A. Locke – goal-setting theory
Goal-setting theoryrefers to a series of propositions designed to help explain and predict work behaviour. Its best-known advocate is Edwin Locke (Locke, 1968; Locke and Latham, 1990, 2002; Latham and Locke, 2006) and the theory has four main propositions:
1 Challenging goalslead to higher levels of performance than a vague goal, such as ‘do your best’. Difficult goals are sometimes called ‘stretch’ goals because they encourage us to try harder, to stretch ourselves. However, beyond a point this effect fades – if people see a goal as being impossible, their motivation declines.
2 Specific goalslead to higher levels of performance than vague goals (such as ‘do your best’).
We find it easier to adjust behaviour when we know exactly what the objective is, and what is expected of us.
3 Participationin goal setting can improve commitment to those goals, since people have a sense of ownership and are motivated to achieve the goals. However, if management explains and justifies the goals, without inviting participation, that can also increase motivation.
4 Knowledge of resultsof past performance – receiving feedback – is necessary to motivation.
It is motivational in itself, and contains information that may help people attain the goals.
The main attraction of goal theory is the directness of the practical implications, including:
Goal difficulty: set goals that are hard enough to stretch employees, but not so difficult as to be impossible to achieve.
Goal specificity: set goals in clear, precise and if possible quantifiable terms.
Participation: allow employees to take part in setting goals, to increase ownership and commitment.
Acceptance: if goals are set by management, ensure they are adequately explained and jus- tified, so that people understand and accept them.
Feedback: provide information on past performance to allow employees to use it in adjust- ing their performance.
While goal theory has many implications for appraisal schemes and other performance management techniques, several variables have been shown to moderate the relationship between goal difficulty and performance – such as ability, task complexity and situational con- straints. Another major question is whether personality traits also moderate the relationship – someone with a high need for achievement may be more likely to respond positively to a
Goal-setting theory argues that motivation is influenced by goal difficulty, goal specificity and knowledge of results.
in plant sales, learning a lot about different plants, which was great to learn at 18. Then I worked in retail, the product side of things, and was then picked up by the design team . . . . and after a few more jobs one of the managers said
‘do you want to go for the job of communi- cations assistant?’ And I thought, ‘people actu- ally believe in me, they want me to do a job they think I’ll be good at’!
Case questions 15.4
Consider how the company has helped to generate positive attitudes with this member of staff.
Analyse these accounts using Herzberg’s theory – which of his ‘motivating factors’ do staff refer to?
Sources: Interviews with staff members.
471 DESIGNING WORK TO BE MOTIVATING
challenging goal than someone to with a lower need for achievement. Equally, someone with a high level of self-confidence in his/her abilities will respond to challenging goals in a different way from someone with little self-confidence.
The context may affect the motivational quality of challenging goals. In some careers entry to, or advancement within, the high-status aspects of the job depends on spending months or years, on less challenging assignments. People may be willing to work diligently at less chal- lenging tasks, if they see them as a stepping stone to a future with more challenging work. A person’s career stage will also affect the motivational effect of challenging – in late career they may be less-inclined to seek challenge than they were when young.
Extrinsic rewardsare valued outcomes or benefits provided by others, such as promotion, a pay increase or a bigger car.
Intrinsic rewardsare valued outcomes or benefits that come from the individual, such as feelings of satisfaction, achievement and competence.
Designing work to be motivating 15.6
People value both extrinsicand intrinsic rewards. Extrinsic rewards are those that are sepa- rate from the task, such as pay, security and promotion. Intrinsic rewards are those that people receive as they do the task itself – using skills, sensing achievement, doing satisfying work.
Recall that a central element in scientific management was the careful design of the ‘one best way’ of doing a piece of manual work. Experts analysed how people did the job and identified the most efficient method, usually breaking the job into many small parts. Such work provided few if any intrinsic rewards – and Taylor’s system concentrated on providing clear extrinsic rewards.
Working on a small element of a task is boring to many people, making them dissatisfied, careless and frequently absent. As these limitations became clear, managers looked for ways to make jobs more intrinsically rewarding – so that the work itself brought a reward of interest or challenge. The ideas from Maslow, Herzberg and McGregor prompted attempts to increase the opportunity for people to satisfy higher-level needs at work. The assumption was that staff would work more productively if management offered intrinsic rewards (motivators in Herzberg’s terms) as well as extrinsic ones (Herzberg’s hygiene factors), leading to ideas about job enrichment.
Job characteristics theory
Hackman and Oldham (1980) built on these ideas to develop and test empirically an ap- proach to the design of work which focused on the objective characteristics of employees jobs. Their basic idea was to build into those jobs the attributes which are likely to offer in- trinsic motivation to staff, and so encouraging them to perform well. Their job characteris- tics theory predicts that the design of a job will affect internal motivation and work outcomes, with the effects being mediated by individual and contextual factors. Figure 15.7 shows the model, with the addition of implementing concepts in the left-hand column. The model provides guidance in how to design enriched jobs which satisfy more of employees’
higher-level needs.
The model identifies three psychological statesthat must be present to achieve high moti- vation. If any are low, motivation will be low. The three states are:
Experienced meaningfulnessThe degree to which employees perceive their work as valu- able and worthwhile. If workers regard a job as trivial and pointless, their motivation will be low.
Experienced responsibilityHow responsible people feel for the quantity and quality of work performed.
Knowledge of resultsThe amount of feedback employees receive about how well they are doing. Those who do not receive feedback will care less about the quality of their performance.
Job characteristics theorypredicts that the design of a job will affect internal motivation and work outcomes, with the effects being mediated by individual and contextual factors.
These psychological states are influenced by five job characteristicsthat contribute to ex- perienced meaningfulness of work:
Skill varietyThe extent to which a job makes use of a range of skills and experience. A rou- tine administrative job is low in variety, whereas that of a marketing analyst may require a wide variety of statistical and interpersonal skills.
Task identityWhether a job involves a complete operation, with a recognisable beginning and end. A nurse who organises and oversees all the treatments for a hospital patient will have more task identity than one who provides a single treatment to many different patients.
Task significanceHow much the job matters to others in the organisation or to the wider society. People who can see that their job contributes directly to performance, or that it is a major help to others, will feel they have a significant task.
AutonomyHow much freedom and independence a person has in deciding how to go about doing the work. A sales agent in a call centre following a tightly scripted (and recorded) conversation has less autonomy than a sales agent talking face to face with a customer.
FeedbackThe extent to which a person receives feedback on relevant dimensions of per- formance. Modern manufacturing systems can provide operators with very rapid infor- mation on quality, scrap, material use and costs. Operators can then receive a high level of feedback on the results of their work.
The extent to which a job contains these elements can be calculated using a tested instrument, and then using the scores to calculate the motivating potentialscore for the job. Figure 15.7 presents the model schematically.
The model also shows how to increase the motivating potential of a job, by using one or more of five ‘implementing concepts’:
Combine tasksRather than divide the work into small pieces, as Taylor recommended, staff can combine them so they use more skills and complete more of the whole task. An order clerk could receive orders from a customer and arrange transport and invoicing instead of having these done by different people.
Management in practice Enriching the work of a software engineer
A skilled software engineer found that others were expecting him to help them out on too many routine tasks, and this was preventing him from developing new skills – so he became disengaged from the work he enjoyed. He discussed the problem with his manager, who responded effectively in that he:
made the engineer responsible for two junior engineers who could share the load;
assigned him to visit customers (previously done by a customer engineer);
authorised him to plan how to meet customers needs.
The engineer said:
After these changes, I experienced total fulfillment. I was aware of the customers’ problems. And by contacting them directly I knew what they needed. I also saw directly how our solutions helped them;
Natural work groups to share loading,
Customer relations – significant outcomes,
Vertical loading training engineers,
Feedback channel.
Source: Private communication with the engineer.
473 DESIGNING WORK TO BE MOTIVATING
Combining tasks
Forming natural work units
Establishing client relationships
Vertical loading
Opening feedback channels
Skill variety
Task identity
Task significance
Autonomy
Feedback from job
Experienced meaningfulness of the work
Experienced responsibility for outcomes of the work Knowledge of the actual results of the work activities
High internal work motivation High “growth”
satisfaction High general job satisfaction High work effectiveness Critical
psychological states Implementing
concepts Core job
dimensions Personal and
work outcomes
Moderators:
1. Knowledge and skill 2. Growth need strength 3. “Context” satisfactions
Figure 15.7 The job characteristics model
Source: Adapted from Hackman and Oldham (1980).
Form natural workgroupsIn order to give more responsibility and enable sharing of skills, groups could be created that carry out a complete operation. Instead of a product passing down an assembly line, with each worker performing one operation, a group may assemble the whole product, sharing out the tasks among themselves.
Establish customer relationsThis would bring home to employees the expectations of the people to whom their work goes, whether inside or outside the organisation, en- abling them to see how their job fits into the larger picture. Instead of people doing part of the job for all customers, they can look after all the requirements of some customers.
They establish closer relationships and gain a better understanding of their customers’
needs.
Vertical loadingThis involves workers taking on some responsibilities of supervisors to solve problems and develop workable solutions, thus adding to their autonomy. Operators may be given responsibility for checking the quantity and quality of incoming materials and reporting any problems. They may use more discretion over the order in which they arrange a week’s work.
Open feedback channelsThis would ensure that people receive feedback on their per- formance from internal or external customers. Operators can attend meetings at which customers give their views on the service provided as a basis for improving performance and building client relationships.
The last feature of the Hackman–Oldham model is the specification of three moderating influences:
knowledge and skill – a person’s ability to do the work;
growth need strength – the extent to which an individual desires personal challenges, ac- complishment and learning on the job – which clearly varies; and
‘context’ satisfaction – pay and other conditions surrounding the job.
Key ideas Meaningful work leads to positive outcomes
Management in practice Gamma Chemical (part 2) – a focus on motivating factors
Many research teams have used the work design model to test empirically the effects of the variables on work outcomes. Most have confirmed the positive relationships predicted by Hackman and Oldham (1980), in the sense that jobs which were assessed to be relatively high on the motivational factors tended to en- hance job satisfaction and performance, and to be negatively associated with absenteeism. Humphrey et al.
(2007) conducted a meta-analysis of 259 such studies, doing so in a way that enabled them both to test the general validity of the original model, and to extend it in two significant ways.
They found that the five motivational characteristics shown in Figure 15.7 were indeed positively related to job satisfaction, growth satisfaction, internal work motivation and positive job performance; and were nega- tively related to absenteeism. They also found that experienced meaningfulness was a particularly significant mediating factor – in other words, it confirmed that the reason why motivating factors lead to positive work outcomes is that they enable people to see meaning in their work.
The team also extended the original model by including measures of two aspects of the wider context in which people were performing their work. They assessed two aspects – social characteristics (such as social support and opportunities for interaction outside the organisation) and work context characteristics (such as physical demands and working conditions). Their analysis showed that these contextual factors also affect work outcomes: how people design them has a positive or negative effect on work outcomes.
Source: Humphrey et al.(2007).
Many managers, such as those at Gamma Chemical (see the following Management in Practice), have changed the kind of work they expect employees to do. This has not usually been to provide more interesting jobs, but as a response to business conditions. Nevertheless, the results of such changes often support what the theory predicts. Using ideas from this section to enhance staff motivation can enable staff to work in ways that add more value to resources, and so support wider strategy.
After taking control, Gamma Chemical made the following changes to working arrangements:
introduced a cross-training programme to improve job diversity and individual growth;
created problem-solving teams from natural work units to give operators a sense of ownership and achievement;
expected operators to make more decisions, increasing individual authority and accountability;
introduced an appraisal system that shows operators how their function affects company performance.
Management believed these changes had resulted in 20 per cent more output and 50 per cent less wastage.
Source: Private communication and discussions with the manager.