The application of equity theory in the business world implies that employees can expect a fair return for the contributions they make to their jobs. Workers generally compare their own inputs and outcomes with those of co-workers or colleagues when measuring fairness. Similarly, reinforcement theory strives to elicit positive employee behaviors through a reward system. Organizations often apply both these theories to boost productivity and motivate employees to perform well over time.
Reinforcement theory focuses on using a system of rewards and punishment to reinforce desirable behavior and discourage inappropriate behavior. The goal of associating specific consequences with certain behaviors is to produce positive outcomes and thereby shape behavior. By reinforcing positive behavior, organizational managers increase the likelihood that employees will repeat the behavior. Appropriate rewards motivate workers and help to accomplish this goal. An example of positive reinforcement would be giving a bonus to an employee who frequently exceeds sales projections.
Negative reinforcement is a different approach to behavior modification, and it is used a way to discourage the frequency of certain unwanted behaviors. Punishment can be further broken down into positive and negative punishment. Positive punishment involves giving an employee something he doesn’t like as a consequence of engaging in inappropriate behavior. An example of positive punishment would be demoting an employee who consistently fails to meet her sales quota. On the other hand, negative punishment removes something an employee likes when his behavior is undesirable. Not giving an annual pay raise to an employee who consistently performs below expectations is an example of negative punishment. Unlike punishment, which employers use to discourage unwanted behavior, negative reinforcement is actually another component of the reward system. As a way of increasing desirable behavior, workers are rewarded for performing their jobs well by having an unpleasant consequence removed. For instance, employees who improve the quality of their work may receive less supervision.
Equity Theory Rewards
Equity theory is based on the belief that individuals are motivated by fair treatment. In the workplace, equity is based on the contributions employees make to the organization in relation to how they see themselves rewarded. Rewards for satisfactory job performance come in the form of wages, salaries, employee benefits, employer recognition and an individual’s own sense of achievement. Equity theory implies a positive relationship exists between how well an employee performs her job and how much recognition, compensation and other rewards she receives.
Equity Theory Comparisons
Equity theory does more than measure individual efforts and rewards. It involves workers comparing themselves with others in similar situations. Whether employees are fairly compensated for their work takes into account the rewards others who perform comparable duties receive in relation to the amount and quality of work they perform. Equity theory inputs are defined as the efforts employees put into their job performance, their level of education and training, and previous work experience. Outcomes include pay grade, benefits, position and opportunity for advancement, increased job satisfaction and job security.
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