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A version of discrepancy theory of job satisfaction focusing on the discrepancies between what one has on the job and what one thinks is fair - what one should have
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Equity Theory
Social comparison takes place Perceived discrepancies between ratios may produce tension or dissonance Amount of discrepancy corresponds to the amount of tension the individual experiences Amount of tension corresponds to the amount of energy an individual expends to alleviate the discrepancy
Equity Theory
Inputs - factors considered by the individual that contribute to their work knowledge, skills and abilities Outcomes - factors considered by the individual to have personal value - money, promotion, praise
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Equity Theory
People strive for fairness and justice in social exchanges Cognitive perception of fairness or lack of it affects behavior Inputs education, skills, training, effort, etc. Outputs pay, fringe, security, recognition, etc.
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Organizational Justice
Distributive Justice: The perceived fairness
of how resources and rewards are distributed. the process and procedures used to make allocation decisions.
Conclusion
Pay attention to what employees perceive to be fair and equitable Allow employees to have a voice Employees should have opportunity to appeal Organizational changes, promoting cooperation, etc. can come easier with equitable outcomes Failure to achieve equity could be costly Climate of justice