Ob-1. How Can Equity Theory Explain the Motivation of Employees Working at Xandria?

Topics: Motivation, Distributive justice, Victor Vroom Pages: 8 (1957 words) Published: August 27, 2013
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1. How can equity theory explain the motivation of employees working at Xandria?

In case study, Xandria Pharmaceuticals is a Chinese researcher and manufacturer of pharmaceutical products in HK. Their goal is to produce the highest quality products with the minimum negative impact on the environment, which is an inspiration to their 150 employees. While some mission statements are meaningless general statements, Xandria’s “green” philosophy guides all decisions. In following, this essay will discuss the case study about motivation of employees working through Adams’s equity theory identified. These are including their formed three of different situations: equity, underpayment equity and overpayment equity and their organizational justice identified.

Adam’s equity theory is holds that motivation is a function of fairness in social exchanges. That subject mentioned that people are motivated by their need for fair treatment said by Katzell and Thompson (1990) and Organ et al. (2006). That means like input -disbursement is equal the outcome. Outcome (O) illustrates anything an individual obtains from an organization or a job as like pay, benefits, job security, accomplishment, recognition. Input (I) represents anything an individual gives to his or her organization of job as like time, effort, knowledge, skill, work behaviors. There are 2 Outcomes and 2 Inputs, personal Outcome (Op), referent other Outcome (Oo), personal Input (Ip) and referent other Input (Io). Their formula of theory basically should have three types. First is an equitable situation as Op/ Ip = Oo/Io. Secord is negative inequity situation (underpayment equity) as Op/ Ip < Oo/Io. Third is positive inequity situation (Overpayment equity) as Op/ Ip > Oo/ Io. Refer to case study, they have formed 3 different situations on equity theory is following.

Equity situation can be found in case study. While the surf’s up, Xandria urges the employees to produce the highest quality product. At the same time, the company demands creativity, collaboration, work hard and result. The outcome is time to produce the highest quality product and the input is skill and work hard. So that Outcome and Input in personal is same as that in referent other. Their formula like produce the highest quality products (self) / skill and hard work (self) = produce the highest quality products (other) / skill and hard work (other). Therefore, we found the ratio is the same. In this equity situation, people have motivation to keep the current status.

Moreover, according to case study by Xandria offered full medical benefit to all staff, including part time staff. This makes a negative inequity situation which defined comparison like another person receives greater outcomes for similar input. The outcome is day care centre and full medical benefit and the input is work hours involved. Outcome in personal is the same as referent other, but input is different. So their formula of negative inequity is day care centre and full medical insurance (self)/ working hours -full time worker (self) < day care centre and full medical insurance (other)/ working hours-full time worker (other). Therefore, worker contributes more inputs but also takes the same output as referent. In case of negative inequity, people have motivation to strive toward to increase his or her outcome. Dansereau, Cashman and Graen (1993) highlighted that people will try more effort to seek compensation in this situation.

For positive inequity means comparison in which another person receives lesser outcomes for similar input. According to case study, Xandria would like provide six weeks off at full pay working for environmental groups, and sponsor 50% continue study pay for their tuition fees to employee which is above market rate. Besides, other companies do not have a surfing break. Outcome is surfing break and sponsor and input and creative and knowledge....
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