Theories of HRM
Equity theory is a theory that attempts to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources within interpersonal relationships. Considered one of the justice theories, equity theory was first developed in 1963 by John Stacey Adams. Employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. Equity theory proposes that individuals who perceive themselves as either under-rewarded or over-rewarded will experience distress, and that this distress leads to efforts to restore equity within the relationship. It focuses on determining whether the distribution of resources is fair to both relational partners. Equity is measured by comparing the ratios of contributions and benefits of each person within the relationship. Case of US
Cowherd and Levine (1992) used a sample 102 business units in 41 corporations to examine whether the size of the pay differential between lower-level employees and top management had any impact on product quality. Cowherd and Levine suggest that individuals often compare their pay to that of people higher in the organization structure. If lower-level employees feel inequitably treated, they may seek to reduce their effort to achieve equity. Quality, in their study, was defined as customer perceptions of the quality of goods and services. They hypothesized that extra role, or citizenship behaviors, such as freely offering to help others, following the spirit rather than letter of rules, and correcting errors that would ordinarily escape notice, would be less likely when pay differentials between hourly and top managerial employees were large. Their results supported this hypothesis, suggesting that organizations need to take care that they not forget the potential adverse motivational consequences of executive pay for the motivation of other employees. Nepalese Context:
Human Resource Development Practice in Nepalese Business Organizations: A Case Study of Manufacturing Enterprises in Pokhara -Lal Bahadur Baniya
At the outset, the management theory of equity towards personnel management including related past studies were reviewed. Being a descriptive study, survey research design was applied to collect required primary data. The primary data were collected from the manufacturing firms having more than 25 employees. As per the record of Gandaki Zonal Labor Office, Pokhara and office of Industrial Estate Management Ltd. Pokhara, there were altogether 23 manufacturing firms with more than 25 employees in Pokhara. Out of 23, 18 firms were found in operation. Therefore, all 18 firms were included in the study. Structured interviews were administered on the top executives-chairman, managing director and general manager-of the manufacturing firms at their office. The filled out questionnaires were thoroughly checked, compiled and presented in appropriate forms to facilitate data analysis and interpretation. Research:
Development Opportunities for Employees
Training and time adjustment for study are the two opportunities provided for employees. A good number of firms have been found to offer study facilities to the employees besides providing training.
Areas and Subject of Training
Majority of firms have found to offer training in the field of financial management followed by marketing management and production management at all levels. Duration of Training and Practice of Identifying Training Need Out of 18 firms, two-third of firms provided short-term training of less than two weeks. The rest offered mid-term training of two to four weeks. None of the firms reported of providing training longer than four weeks duration. Employee Empowerment
Out of 18 firms, executives of 6 firms (33%) are aware of the employee empowerment concept whereas executives of 12 (67%) firms are unaware of this concept. Those...
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