1. Motivation II: Equity, Expectancy, and Goal Setting
Chapter Seven
Motivation II: Equity, Expectancy, and Goal Setting
McGraw-Hill/Irwin
Organizational Behavior: Key Concepts, Skills & Best Practices, 3/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

2. Process Theories Two approaches of motivation
Content (Need) theories : What causes motivation? (Previous Chapter)
Process theories : How motivation occurs?
Cognition (or perception) plays a major role
Equity theory, Expectancy theory, Goal setting theory

3. Equity Theory
Adams
Equity theory holds that motivation is a function of fairness in social exchanges
Two primary components of exchanges
Input
Output (Outcomes)
Issue : whether or not one receives adequate outcomes (rewards) for his/her contributed inputs

4. The Individual-Organization Exchange Relationship
Inputs include education/training, skills, creativity, seniority, age, personality traits, effort expended, and personal appearance
Outcome include pay/bonuses, fringe benefits, challenging assignments, job security, promotions, status symbols, recognition, and participation in important decisions.

5. The Individual-Organization Exchange Relationship
People make equity evaluations by comparing the perceived fairness of their employment exchange to that of relevant others
Comparing their input-outcome ratios with the input-outcome ratios of relevant others
Relevant others
informational availability
perceived relevance

6. Negative and Positive Inequity
Figure 7-1

7. Negative and Positive Inequity
Negative inequity - Comparison in which another person receives greater outcomes for similar inputs Feelings of deprivation, Anger
Positive inequity - Comparison in which another person receives less outcomes for similar inputs Feelings of guilt

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

9. Thresholds of Equity and Inequity
Equity sensitivity - An individual’s tolerance for negative and positive inequity
Benevolents have a higher tolerance for negative inequity
Sensitives adhere to a strict norm of reciprocity and are quickly motivated to resolve both negative and positive 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

10. Reduction of Inequity Five choices to reduce inequity
Change their inputs or outcomes
Induce others’ inputs or outcomes
Distorts cognitively either their own or others’ inputs or outcomes
Choose a different comparison others
Quit their job

11. Organizational Justice
Organizational Justice : The extent to which people perceive that they are treated fairly at work
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 (e,g., voice)
Interactional justice - Extent to which people feel fairly treated when procedures are implemented (e.g., truthful communication and respect)

12. Organizational Justice
Research demonstrates that employees’ perceptions of distributive, procedural, and interactional justice are positively related with job performance, job satisfaction, organizational commitment, and OCB, and negatively related with intentions to quit
Even if someone is dissatisfied with distributive outcomes, when procedural and/or interactional justice are working, he/she tends to be accepting the decision

13. Practical Lessons from Equity Theory
Equity theory provides managers with yet another explanation of how beliefs and attitudes (cognitive processes) affect job performance
Research emphasizes the need for managers to pay attention to employees’ perceptions of what is fair and equitable
Communication is important
The others: (skip)

14. Expectancy Theory Vroom’s
Expectancy theory - Holds that people are motivated to behave in ways that produce valued outcomes
Based on hedonism
Can be applied to the situation that involves a choice

15. Expectancy Theory
People will choose to behave in a way that gives the most expected utility
The expected utility is a function of expectancy, instrumentality, and valence
Effort Performance Reward
Expectancy Instrumentality Valence

16. Expectancy Theory
Expectancy - Belief that effort leads to a specific level of performance
Effort performance perception
Probability (0 ~ 1.0)
Factors influencing 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

17. Expectancy Theory Instrumentality Valence
Performance  outcome perception
Outcomes : refer to different consequences or rewards that are contingent on performance
-1.0 ~ 1.0
Valence
The value of outcome
For research purpose, -10 ~ +10, for instance

18. Expectancy Theory (Ex) Job choice
Effort Performance Outcomes (Valence)
Outcome 1 (Social Status) (7)
Becoming a CPA Outcome 2 (Salary) (9)
Outcome 3 (Interesting work) (3)
Effort
Outcome 1(Social Status) (7)
Becoming Outcome 2 (Salary) (9)
a Stewardess
Outcome 3 (Interesting work) (3)
Which alternative would you choose?
The alternative with greater expected utility
0.8
<11.3>
0.9
<5.65>
-0.8
0.5
0.7
0.5
<10.1>
<7.07>
0.5
0.7

19. Expectancy Theory and Managerial Implications
Managers can improve their subordinates’ motivation by increasing
Expectancy
Improving self-efficacy
Providing coaching, information, resources
Instrumentality
Valid and accurate performance ratings
Matching reward with those performance ratings
Valence
Identifying rewards valued by subordinates

20. Goal Setting Theory Locke Having the strongest empirical evidence
Goal – what an individual is trying to accomplish
Management by objectives (MBO)
Management system incorporating participative goal setting and feedback

21. Goal Setting Theory
How Does Goal Setting Work (Motivational mechanism)
Goals direct attention
Goals regulate effort
Goals increase persistence
Goals foster the development and application of task strategies and action plans

22. Insights from Goal-Setting Research
Difficult goals lead to higher performance
Specific, difficult goals lead to higher performance for simple rather than complex tasks
Goal specificity – quantifiability of a goal
Feedback enhances the effect of specific, difficult goals

23. Relationship between Goal Difficulty and Performance
Figure 7-2

24. Insights from Goal-Setting Research
Participative goals, assigned goals, and self-set goals are equally effective
Goal commitment affect goal-setting outcomes
Goal commitment – extent to which an individual is personally committed to achieving a goal
Difficult goals lead to higher performance only when employees are committed to their goals

25. Practical Application of Goal Setting
Step 1: Set goals (“SMART”, p.191)
Specific, Measurable, Attainable, Results
oriented, Time bound
Step 2: Promote goal commitment
Step 3: Provide support and feedback

26. Managerial Actions for Enhancing Goal Commitment
Provide valued outcomes for goal accomplishment
Raise employees’ self-efficacy about meeting goals by:
Providing adequate training
Role modeling for desired behaviors and actions
Persuasively communicating confidence in the employees ability to attain the goal
Have employees make a public commitment to the goal

27. Managerial Actions for Enhancing Goal Commitment
Communicate an inspiring vision and explain how individual goals relate to accomplishing the vision.
Allow employees to participate in setting the goals.
Behave supportively rather than punitively.
Break a long-term goal (i.e., a yearly goal) into short-term sub-goals.
Ensure that employees have the resources required to accomplish the goal.