Slide 1Motivation II: Equity, Expectancy, and Goal SettingAfter reading the material in this chapter, you should be able to:Equity TheoryThe Individual-Organization Exchange RelationshipSlide 6Negative and Positive InequityDynamics of Perceived InequitySlide 9Thresholds of Equity and InequitySlide 11Slide 12Organizational JusticePractical Lessons from Equity TheorySlide 15Slide 16Slide 17Expectancy Theory of MotivationVroom’s Expectancy TheoryExpectancyQuestion?Slide 22Research on Expectancy Theory and Managerial ImplicationsManagerial and Organizational Implications of Expectancy TheorySlide 25Expectancy TheoryPrerequisites to Linking Performance and RewardsSlide 28Slide 29Goals: Definition and BackgroundHow Does Goal Setting WorkInsights from Goal-Setting ResearchRelationship between Goal Difficulty and PerformanceSlide 34Practical Application of Goal SettingTypes of goal orientationManagerial Actions for Enhancing Goal CommitmentSlide 38Video: Financial Troubles at GMMotivation II: Equity, Expectancy, and Goal SettingChapter SevenCopyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinOrganizational Behavior: Key Concepts, Skills & Best Practices, 3/e7-3After reading the material in this chapter, you should be able to:•Discuss the role of perceived inequity in employee motivation.•Describe the practical lessons derived from equity theory.•Explain Vroom’s expectancy theory.•Describe the practical implications of expectancy theory.•Identify five practical lessons to be learned from goal-setting research.•Specify issues that should be addressed before implementing a motivational program.7-4Equity Theory•Equity theory - Holds that motivation is a function of fairness in social exchanges7-5The Individual-Organization Exchange Relationship•An employee’s inputs, for which he expects a just return, include education/training, skills, creativity, seniority, age, personality traits, effort expended, and personal appearance.7-6The Individual-Organization Exchange Relationship•On the outcome side,the organization provides such things as pay/bonuses, fringe benefits, challenging assignments, job security, promotions, status symbols, recognition, and participation in important decisions.7-7Negative and Positive Inequity•Negative inequity - Comparison in which another person receives greater outcomes for similar inputs.•Positive inequity - Comparison in which another person receives lesser outcomes for similar inputs.7-8Dynamics of Perceived Inequity1. People have varying sensitivities to perceived equity and inequity2. Inequity can be reduced in a variety of ways7-9Negative and Positive InequityFigure 7-17-10Thresholds of Equity and Inequity•Equity sensitivity - An individual’s tolerance for negative and positive equity7-11Thresholds of Equity and Inequity•Benev olents have a higher tolerance for negative inequity.•Sensitive s adhere to a strict norm of reciprocity and are quickly motivated to resolve both negative and positive inequity7-12Thresholds of Equity and 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.7-13Organizational Justice•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.•Interactional justice - Extent to which people feel fairly treated when procedures are implemented.7-14Practical Lessons from Equity Theory•Equity theory provides managers with yet another explanation of how beliefs and attitudes affect job performance.•Research emphasizes the need for managers to pay attention to employees’ perceptions of what is fair and equitable.7-15Practical Lessons from Equity Theory•Managers benefit by allowing employees to participate in making decisions about important work outcomes.•Employees should be given the opportunity to appeal decisions that affect their welfare.7-16Practical Lessons from Equity Theory•Employees are more likely to accept and support organizational change when they believe it is implemented fairly and when it produces equitable outcomes.•Managers can promote cooperation and teamwork among group members by treating them equitably.7-17Practical Lessons from Equity Theory•Treating employees inequitably can lead to litigation and costly court settlements.•Employees’ perceptions of justice are strongly influenced by the leadership behavior exhibited by their managers•Managers should pay attention to the organization’s climate for justice7-18Expectancy Theory of Motivation•Expectancy theory - Holds that people are motivated to behave in ways that produce valued outcomes.7-19Vroom’s Expectancy Theory•Motivation boils down to the decision of how much effort to exert in a specific task situation.•Expectancy - Belief that effort leads to a specific level of performance.7-20ExpectancyThe following factors influence an employee’s 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 with7-21Question?In Vroom’s expectancy theory what is the value of a reward?A. InstrumentalityB. ValenceC. OutcomeD. Input7-22Vroom’s Expectancy Theory•Instrumentality - A performance  outcome perception•Valence - The value of a reward or outcome•Outcomes - refer to different consequences that are contingent on performance7-23Research on Expectancy Theory andManagerial Implications•Managers are advised to enhance effort  performance expectancies by helping employees accomplish their performance goals.•Important for managers to influence employees’ instrumentalities and to monitor valences for various rewards.7-24Managerial and Organizational Implications of Expectancy Theory7-25Managerial and Organizational Implications of Expectancy Theory•Some workers value interesting work and recognition more than money•Extrinsic rewards can lose their motivating properties over time and may undermine intrinsic motivation7-26Expectancy TheoryRead an article from Management and Organization Review on “Expectancy Theory-Based Performance Management7-27Prerequisites to Linking Performance and Rewards1. Managers need to develop and communicate performance standards to