Chapter Eight

Motivation Through Equity,

Expectancy, and Goal Setting

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Chapter Eight Outline
■ Adam’s Equity Theory of Motivation
- The Individual-Organization Exchange Relationship
- Negative and Positive Inequity
- Dynamics of Perceived Inequity
- Expanding the Concept of Equity
- Equity Research Findings
- Practical Lessons from Equity Theory
■ Expectancy Theory of Motivation
- Vroom’s Expectancy Theory
- Porter and Lawler’s Extension
- Research on Expectancy Theory and Managerial Implications
■ Motivation Through Goal Setting
- How Does Goal Setting Work?
- Insights from Goal-Setting Research
- Practical Applications of Goal Setting
■ Putting Motivational Theories to Work © The McGraw-Hill Companies, Inc., 1999
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Negative and Positive Inequity

■ An Equitable Situation
- Comparison in which another person’s ratio of outcomes to
inputs is equal to your outcome to input ratio
- Example: Self = $2 = $2 per hour vs. Other = $4 = $2 per hour
1 hour 2 hours
■ Negative Inequity
- Comparison in which another person receives greater outcomes
for similar inputs
- Example: Self = $2 = $2 per hour vs. Other = $3 = $3 per hour
1 hour 1 hour
■ Positive Inequity
- Comparison in which another person receives lesser outcomes
for similar inputs
- Example: Self = $3 = $3 per hour vs. Other = $2 = $2 per hour
1 hour 1 hour
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Distributive and Procedural 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.
Research Results
* Justice perceptions are improved by giving employees a
“voice” in decisions that affect them.
* Distributive and procedural justice are significantly
correlated with a variety of outcomes such as:
- job satisfaction - organizational commitment
- commitment to - absenteeism
support a decision - turnover
- quality of decisions - trust in management
* Overall, equity theory was supported.
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Practical Lessons from Equity Theory

❇ Employees’ beliefs and attitudes affect job performance.
❇ Managers should pay attention to employees’ perceptions of
distributive and procedural justice because they affect many
different employee outcomes.
❇ Managers benefit by allowing employees to participate in making
decisions about important work outcomes.
❇ Perceptions of fairness are increased by giving employees the
opportunity to appeal decisions that affect them.
❇ Employees are more likely to accept change when they believe the
organization is treating them fairly and equitably.
❇ Managers can promote cooperation and teamwork among work
group members by treating them equitably.

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A General Model of Vroom’s

Expectancy Theory
Outcome 1
Performance
High Effort Outcome 2
Goal

Expectancy Outcome 3
“What are my chances
of reaching my
performance goal
if I work hard?” Instrumentality
Decision to “What are my chances Valence
Exert Effort of getting various “How much do I value
Expectancy outcomes if I achieve these outcomes?”
“What are my chances my performance goal?”
of reaching my
performance goal
if I slack off?”
Outcome 1
Performance
Low Effort Outcome 2
Goal
Outcome 3

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Applying Vroom’s Expectancy Theory

(1.0) Outcome 1
Make $3,600 in (+2)
commission

Outcome 2
High Effort Performance Gain respect from
(.80) (.75) peers and recognition (+1)
Work
Workhard
hardfor
for Sell nine cars
1010hours
hoursa aday
day a month from boss

Outcome 3
(-.9) Have more time to
spend with boyfriend (+2)

Expectancy Instrumentality Valence

(1.0) Outcome 1
Make $1,200 in (+.5)
commission

Low Effort Performance Outcome 2

(.80) (.75) Lose respect from
Work hard for Sell three cars (-1)
5 hours a day a month peers and recognition
from boss

(.60) Outcome 3
Get fired (-2)

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Porter and Lawler’s Expectancy
Model
8
11 4
Perceived
Value
Valueofof Abilities
equitable
Reward
Reward and traits
rewards

7A
Intrinsic
rewards
6 9
3 Performance
Effort Satisfaction
(accomplishment)

7B
Extrinsic
rewards

2
5
Perceived
Role
effort - reward
perceptions
probability

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Goals
Goal: What an individual is trying to accomplish.

Directing
one’s attention

Regulating
Goals one’s effort
motivate the Task
individual performance
Increasing
by... one’s persistence

Encouraging the
development of goal-
attainment strategies
or action plans
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Insights from Goal-Setting Research

■ Difficult Goals Lead to Higher Performance.
- Easy goals produce low effort because the goal is too easy to
achieve.
- Impossible goals ultimately lead to lower performance because
people begin to experience failure.
■ Specific Difficult Goals May or May Not Lead to Higher
Performance.
- Goal specificity pertains to the quantifiability of a goal.
- Specific difficult goals impair performance on novel, complex
tasks when employees do not have clear strategies for solving
these types of problems.
■ Feedback Enhances The Effect of Specific, Difficult Goals.
- Goals and feedback should be used together.

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Insights from Goal-Setting Research
(continued)
■ Participative Goals, Assigned Goals, and Self-Set Goals Are
Equally Effective.
- Managers should set goals by using a contingency approach.
Different methods work in different situations.
■ Goal Commitment and Monetary Incentives Affect Goal-Setting
Outcomes.
- Difficult goals lead to higher performance when employees are
committed to their goals.
- Difficult goals lead to lower performance when employees are
not committed to their goals.
- Goal based incentives can lead to negative outcomes for
employees in complex, interdependent jobs requiring
cooperation.
* Employees may not help each other.
* Quality may suffer as employees pursue quantity goals.
* Commitment to difficult goals may suffer.
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