Some employees will restrict

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1 addressing employees feelings of inequity: capitalizing on equity theory in modern management Reginald L. Bell, Ph.D. Some employees will restrict their inputs to a level they believe is consistent with the outcomes they receive. Others will meet with their supervisors to verbally negotiate a better deal meaning they will struggle to find a balance between work and reward. The distress of inequity will cause others to quit the organization. Even though Adams s Equity Theory has been a part of the management literature since 1963, some managers still don t know how to deal effectively with employees feelings of inequity. In this article, I show managers how to use communication to address employees feelings of unfairness when they distort the facts. Feelings of Inequity Vis-à-vis Employers Breaking EEO Laws In cases where employers are engaging in differences in treatment and/or differences in impact against protected groups these claims should be resolved in the courts. Recently, the Equal Employment Opportunity Commission (EEOC) reported on its website that nearly 100,000 workplace discrimination lawsuits were filed in 2010, with race and harassment being top causes. Discrimination cases are normally hard to prove, time consuming and costly; however, some claims are prima facie. For example, imagine yourself as the comptroller for a manufacturing company and a 47- year-old female staff accountant storms into your office yelling at you. She just found out all male staff accountants in her department earn on average a 40% higher salary for doing the same job. And, you know there is no other discernable difference between her and her male counterparts. This is a prima facie example of a possible violation of her civil rights under The Equal Pay Act of 1963 (EPA): This law makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. The law also makes it illegal to retaliate against a person because 3

2 the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. Furthermore, if the 47-year-old woman files a formal grievance you could be in for a bumpy ride. However, any competent human resources department should be able to conduct a fair and objective investigation of her claim to determine if there is systemic bias and discrimination towards her and possibly other women working in that department. If her complaint is not resolved internally it could be escalated to the EEOC and eventually the courts. (See Supervision Magazine October 2010, page 22 for a deeper analysis of hostile environment cases.) Nevertheless, feelings of inequity are different than legitimate claims of workplace discrimination where employers are actually breaking EEO laws, intentionally or unintentionally. When companies are EEOC compliant, there are still employees who have feelings of inequity. Despite managements perception that the environment is otherwise fair these feelings can persist. This is where equity theory is most applicable when employees distort the facts. Equity Theory in a Nutshell Edward C. Tolman (1932) in his book Purposive Behavior in Animals and Men reported what happens to monkeys behaviors when monkeys expected bananas for a reward and received monkey chow instead. When Tolman s monkeys were trained to use signals they were rewarded with monkey chow or bananas. They learned to associate effort with reward this way. Nonetheless, when Tolman s monkeys selected signals that were supposed to yield a banana reward but they were rewarded with monkey chow instead the monkeys went literally bananas! Tolman s monkeys liked monkey chow but they found bananas irresistible! Tolman, therefore, inferred that his monkeys placed an exchange value on their efforts with rewards they received. The betrayed monkeys refused to play Tolman s game thereafter because they had been deceived by the researcher. Psychologists tend to infer onto human behavior what they learn from their animal experiments. Even when employers are not breaking any of the EEO laws, feelings of inequity among employees often lead to loafing, employees doing the minimum just to keep their jobs, or high levels of turnover meaning employees quitting the organization for apparently no good reason. John Stacey Adams s (1963) Equity Theory is predicated on three assumptions applicable to most situations where employees seek to reduce inequity. Assumption One The equity norm is a social assumption that an employee will expect a fair return for the contribution to the job they do. If Bob is hired on as a Customer Service Representative, he ll want to know that he is receiving a fair wage for the job he is doing in comparison to others doing the same job. The more Bob perceives inequity the more distress he will feel and he will feel less distress when he perceives more equity. Bob will not complain if his raise for the evaluation period is $2 per hour and all others doing the same job is $1 per hour; over-reward might lead him to overcompensate with additional inputs to justify the abundance he has received. Assumption Two The social comparison is the determination employees will make as to whether or not their outcome is equitable in comparison to others inputs and outcomes. This means Bob, who earns $15 per hour, will have a realistic expectation that all other Reps similar to him will earn $15 per hour and be treated the same in terms of raises, promotions, scheduling, etc. Bob will become very angry if he learns that Laura, who has the same experience, training and education, and works the same hours, earns $17 per hour while he makes only $15 per hour; which might be legal, but, will likely create a sense of inequity in Bob once he learns of this fact. Under-reward leads to the most distress when employees feel others equity is greater than their own. 4

3 Assumption Three When employees feel their equity is less than others equity, they will seek to reduce the inequity in three ways: 1) cognitively distorting inputs and outcomes known as cognitive distortion, meaning they will make a psychological adjustment justifying the imbalance, or the behaviors they take to reduce the imbalance; 2) they will actually alter their inputs, meaning they will restrict work inputs until they reach a level that they perceive is on par with the outcomes they are receiving; and/or 3) they will quit the organization. This set of assumptions is the reason equity theory is still good theory. It s Still Good Theory A theory is any collection of statements that attempt to explain phenomenon. A good theory is one that over time its statements are tested, those statements withstand scientific scrutiny, and those statements are confirmed much more often than they are rebutted. Nevertheless, any good management theory worth its salt at some point must be applicable to improving human capital and making the manager s job easier. Otherwise, what good is good theory if good theory is inapplicable to management practice? For example, Frederick Winslow Taylor was able to use his theory of Scientific Management to show managers how to improve efficiency with time and motion in relation to manual labor, to be exact, optimizing laborers shoveling motions. Elton Mayo and Fritz Roethlisberger used their Hawthorne experiments to produce theory that showed practicing managers how social interaction improves employees productivity. Therefore, Equity Theory does have practical uses in modern management. A very good way to explicate the applicability of Equity Theory is to present Bob s case. How to Address Bob s Feelings of Inequity? Bob, a Customer Service Representative, working in a 300 seats customer support centers for an international phone company, located in Houston, Texas was sure he was treated inequitably when he compared himself to other Reps. The problem started when Bob realized that even though he received a $0.50 per hour raise following his biannual performance review, his colleagues in the same department doing the same job received on average a $1.50 per hour increase. Bob was distressed by the knowledge. The only way he found out about the disparity was at a recent company sponsored Christmas holiday office party. Four of the Reps were talking about their evaluations and the raises they received. Laura, one of the Reps, asked Bob, Okay Bob, what are you going to spend your $1.50 raise on? Bob s reply was, What $1.50 raise? I got a $0.50 increase. Is this not what pretty much everybody else got? Laura, grinning, declared, I d be pissed-off if all I got was a $0.50 raise! Bob was visibly unhappy with the revelation and when his face scrunched to a frown he said, I work as hard as every other Rep. I don t understand why I m viewed as completely worthless! The group of four found immediate reasons to disperse after they realized Bob was not happy with the news. The following Monday, Bob s mood and demeanor were noticeably different from the other Reps. It took about a month for Jesse, Bob s immediate supervisor, to notice that Bob s performance had deteriorated. His normal monthly sales volume of high-speed internet service normally $40,000 on average was down $20,000. Jesse asked around and eventually Laura confided in him the conversation at the Christmas party among the Reps. Jesse immediately scheduled a meeting with Bob to discuss the precipitous decline in his monthly sales volume. Since Bob was already exhibiting behaviors that he was attempting to reduce inequity, Jesse knew he needed to confront Bob right away with the facts. Company policy was the reason Bob s raise was $0.50. Bob did not know this, thus, his equity barometer of inputs to expected outcomes became imbalanced as compared to other Reps. Jesse, therefore, needed to confront Bob in the meeting with the truth. 5

4 6 What Bob did not remember from his initial sit-down with Jesse several months earlier was that Jesse did in fact disclose in the written materials about policy on attendance. Bob missed four days during the sixmonth review period. Bob s nonmedical absences precluded him of a merit pay increase for the evaluation period. However, Bob was eligible for a cost-of-living increase which was $0.50. This meeting between Bob and Jesse put Bob back on track because at this meeting Bob was made to realize that his lower than average raise was not because of a personal grudge. And, other Reps who received merit pay increases, in addition to a cost-of-living increase, did not violate attendance policy during the evaluation period. When Jesse checked the sales volume for all Reps working in his department the following month, Bob s sales were back to normal. Communicating the facts directly to Bob helped him rebalance his equity barometer. Conclusion To avoid employees feelings of inequity, be sure that each employee is regularly evaluated; their perceptions of inputs should always be on par with their perceptions of fair outcomes. Be sure that they understand the reward structure. Just as Tolman s monkeys understood the difference between being rewarded with monkey chow when they earned bananas, your human capital will understand the value of their inputs (work they do) in relation to the outcomes (rewards) they receive. Every employee will make social comparisons of their worth and value with others equity. The manager s job is to always be aware of the feelings of inequity among the workers, and the potential causes of such feelings. In other words, employees will seek to balance the level of equity in the workplace for themselves if their perception is that management has not established this balance for them. Experienced managers know very well that sometimes frustrated workers abuse customers. Workers can and do hold feelings of resentment when these feelings of inequity are unrequited; productivity and sales can plummet as a result. Talk to your workers regularly about their perceptions of the value of their inputs. Create a plan to reward employees inputs based on their perceptions of fairness but never promise a banana and reward with monkey chow instead. If you do, employees will seek to reduce their feelings of inequity by restricting output, distorting the facts or quitting the organization. A good manager will use communication to directly confront distortions of facts to rebalance employees attempts to reduce inequity for themselves. Remember, addressing employees feelings of inequity will always be a two-way employment communication responsibility. S V Reginald L. Bell is a tenured associate professor in the college of business at Prairie View A&M University. Bell received his Ph.D. in Business Education from the University of Missouri at Columbia. He is an active member of the Association for Business Communication, and serves on its Publications Board. Bell has more than four dozen articles published in peer reviewed journals. His research has appeared in the Business Communication Quarterly, Journal of Business and Leadership: Research, Practice and Teaching, Journal of College Teaching and Learning, Academy of Educational Leadership Journal, Academy of Marketing Studies Journal, Supervision Magazine, Southwestern Business Administration Journal, and The Journal of Leadership, Accountability, and Ethics. Bell, along with Jeanette S. Martin, is coauthor of Managerial Communication, a graduate level textbook by Pearson Higher Education, with an in stock date scheduled for January, 2013.

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