SEM 1 MB0043 2 Human Resource Management

8/6/2019 SEM 1 MB0043 2 Human Resource Management

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Master of Business Administration-MBA Semester ISubject Code – MB0043

Subject Name – Human Resource Management4 Credits

(Book ID: B1132)

Assignment Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Ques.1 Explain Wage Administration policy. What are the ways by which wagesand salaries are managed in India?

Ans: Wage Administration Policy

The term compensation management, or alternatively, wage and salaryadministration has come to be accepted as the designation for the field of endeavor concerned with the establishment and implementation of soundpolicies and methods of employee compensation.It includes such areas as job evaluation, development and maintenance of wage structures, wage surveys, wage incentives, wage changes andadjustments, supplementary payments, profit sharing, control of compensation costs, and other related pay items. The term wage is commonly used for those employees whose pay iscalculated according to the number of hours worked. Thus, the weeklypay check will fluctuate as the number of hours actually worked varies. The word salary applies to compensation that is uniform from one period

to the next and does not depend upon the number of hours worked.Salaried often implies a status distinction, because those who are onsalary are generally white collar, administrative, professional, andexecutive employees, whereas wage earners are designated as hourly,non-supervisory, or blue collar.Wage earners in some organizations do receive full wage if they areabsent for such reasons as sickness, whereas salaried employees,especially at the lower levels, often receive overtime pay when they workover the standard work week.

The ways by which wages and salaries are managed in India.

The basic purpose of wage and salary administration is to establish and maintainan equitable wage and salary structure. Its secondary objective is theestablishment and maintenance of an equitable labor cost structure i.e., anoptimal balancing of conflicting personnel interests so that the satisfaction of employees and employers is maximised and conflicts are minimised. The wageand salary administration is concerned with the financial aspects of needs,



motivation and rewards.Managers, therefore, analyse and interpret the needs of their employees so thatreward can be individually designed to satisfy these needs.

The word 'salary' is defined in the Oxford Dictionary as ‘fixed periodical paymentto a person doing other than manual or mechanical work’. The payment towardsmanual or mechanical work I referred to as wages. The word pay refers to the

payment for services done which would include salary as well as wages.Wages are commonly understood as price of labor. In ordinary parlance, anyremuneration paid for services is etymological wage. Benham defines wage as“‘a sum of money paid under contract by an employer to a worker for servicesrendered.”Labor was always looked upon as a commodity governed by the law of supplyand demand. Certain theories were propounded for determination of wages butthese could not stand the test of time. A few theories are discussed below:Subsistence theory: This theory, also known as 'Iron Law of Wages', waspropounded by DavidRicardo (17721823).According to this theory, wages tend to settle at a level just sufficient to maintainthe workers and his family at minimum subsistence levels. The theory appliesonly to backward countries where laborers are extremely poor and are unable toget their share from the employers.Standard of living theory: This theory is a modified form of subsistencetheory. According to this theory, wages are determined not by subsistence levelbut also by the standard of living to which a class of labourers becomeshabituated.Residual claimant theory: Francis A. Walker (18401897) propounded thistheory. According to him, there were four factors of production/ business activityviz., land, labour, capital and entrepreneurship. Wages represent the amount of value created in the production which remains after payment has been made forall these factors of production. In other words, labour is the residual claimant.The wage fund theory: According to this theory, after rent and raw materials

are paid for, a definite amount remains for labour. The total wage fund and thenumber of workers determine the average worker's share in the form of wages.Demand and supply theory: According to this theory, wages depend upon thedemand and supply of labor.Marginal productivity theory: This is an improved form of demand and supplytheory. Wages are determined by the value of the net product of the marginalunit of labour employed.Purchasing power theory: According to this theory the prosperity, productivityand progress of industry depend on there being sufficient demand to ensure thesale of its products and pocketing of reasonable profits. A large part of theproducts of industry is consumed by workers and their families and if wages arehigh, demand will be good. However, if wages and the purchasing power of theworkers are low, some of the goods will remain unsold; Output will go down,which will result in unemployment.The bargaining theory of wages: John Davidson propounded this theory.According to him, wages are determined by the relative bargaining power of workers or trade unions and of employers. When a trade union is involved, basicwages, fringe benefits, job differentials and individual differences tend to bedetermined by the relative strength of the organization and the trade union.

The Tribunals and Wage Boards have generally followed the principles laid downin the Fair Wages



Committee's Report on fixing wages. The Committee, in its report, has given aconsiderable thought to wage differentials and has stated that the followingfactors should be taken into consideration for fixation of wages:1. The degree of skill.2. The strain of work.3. The experience involved.

4. The training involved.5. The responsibility undertaken.6. The mental and physical requirements.7. The disagreeableness of the task.8. The hazard attendant on the work, and9. The fatigue involved.

Ques.2 Texas is a medium size, plastic manufacturing company. In this Company,workers have developed grievances against management. For past 2 years, in

spite of making Profit, Company is not paying bonus to the workers. It is expectedthat, if the grievances are not dealt, it might lead to severe consequences. Imaginethis situation and explain the grievance handling procedure, list each steps of theprocedure. Suggest few measures to avoid grievances.

Ans. Grievances Meanings

The definition of a grievance often varies from company to company andfrom author to author. The broadest interpretation of the term wouldinclude any discontent or dissatisfaction that affects organizationalperformance. As such, it can be stated or unvoiced, written or oral,

legitimate or ridiculous. The only major restriction in this definition is thatthe discontent must affect worker performance.

The word grievance is used commonly to indicate various forms andstages of an employee’s dissatisfaction. It means either dissatisfaction ora complaint or a grievance.While dissatisfaction could be defined as anything that disturbs anemployee, a complaint is spoken or written dissatisfaction brought to theattention of the supervisor or his immediate head. In the language of thelabour management relations, a grievance is a complaint formallypresented by the employee or employees to the management.

Dale Yoder defines it as "a written complaint filed by an employee andclaiming unfair treatment". Prof. Jucious defines grievance as “anydiscontent or dissatisfaction, whether expressed or not and whether validor not, arising out of anything connected with the company that anemployee thinks, believes or even feels unfair, unjust or inequitable.”Prof. Pigors and Meyers define grievance as dissatisfaction. Accordingto them, dissatisfaction of an employee is anything that disturbs theemployee, whether expressed or not. The International Labour



Organization (ILO) classifies a grievance as a complaint of one or moreworkers with respect to wages and allowances, conditions of work,interpretations of service stipulations, covering such areas as overtime,leave, transfer, promotion, seniority, job assignment and termination of service. The National Commission of Labour states that complaintsaffecting one or more individual workers in respect of their wagepayments, overtime, leave, transfer, promotion, seniority, workassignment, and discharges would constitute grievances.

The Grievance Handling Procedure

Principles suggested by the Indian Institute of Personnel Management foraddressing the grievance are as follows:a) A grievance should be dealt within the limits of the first line supervisor.b) The appellate authority should be made clear to the employee so thatif he cannot get satisfaction from his immediate supervisor, he shouldknow the next step.

c) The grievance should be dealt with speedily.d) In establishing a grievance procedure, if the grievance is against aninstruction given by a superior in the interest of order and discipline, theinstructions must be carried out first and then only employee can registerhis protest.

Grievance Handling ProcedureInitial step The greatest opportunity for the settlement of a complaint or grievancelies in the initial step of the procedure. If there is no formal procedure andthe firm announces an open door policy, then it is possible that the

supervisor may get bypassed by the worker who would take his grievancedirectly to the higher levels of management. But such bypassing notmerely undermines the supervisor’s authority, which loses face, but alsocreates an atmosphere of win or lose in which both the worker andsupervisor will try to prove the other wrong.Intermediate stepAs the figure indicates, the next step on the management side of theprocedure is to submit the dispute to middle management.Involving the supervisor’s middle and senior line managers in thegrievance process helps in two ways. Initially, the social barriers betweenthe various categories are, to some extent, broken by personal contactand mutual understanding. Secondly, the problem solving approach

integrates the various levels in the organization into a team to jointlyovercome the problem which concerns not only the worker but themanager as well. However, it is important to ensure that the linemanagement assumes prime responsibility for the settlement of agrievance. In many organizations, the Personnel Department is injectedinto the procedure as a decision making power. On the union side,intermediate levels are represented by higher personnel in the unionhierarchy. In most of the organizations, the business agent, a fulltime



negotiations specialist of the union, takes over the intermediate andsometimes the final step. The presence of a business agent may explainwhy management is often out man oeuvre by the union. Business agentsare specialists in union management negotiations, and it is also theirfulltime job. The line manager often considers grievance processing aminor, incidental, and distasteful duty. This lack of specialization andinterest on the part of line management has led to the situation in whichthe staff personnel department is given authority to make decisions aboutgrievances.Final Company union stepUsually, the final step to be undertaken by the company and union is adiscussion of the grievance between representatives of top managementand top union officials. For management, it may be the President inimportant grievances, a Vice-president, or a high levelIndustrial Relations Executive but, for the union, it may be the President of the local union, the Union Executive Committee, or a representative of theInternational Union. It is difficult to secure an integration of interests at

this high level.

Few measures to avoid grievances:-

Grievances arise due to various factors. It is important from the point of view of the manager to know the root cause of the employee'sdissatisfaction.A grievance is always a symbol of some malfunctioning or maladjustmentand an able and skilful manager can always find out the real orsubmerged reasons for a grievance.Several studies have been conducted in various establishments and it hasbeen generally found that causes of employee grievances could begrouped under different major headings.Some of the causes that need to be considered are avoiding grievances:-

1. Promotions; 2. Amenities; 3. Continuity of Services;4. Compensation; 5. Disciplinary action; 6. Fines;7. Increments; 8. Wages; 9. Acting Promotion;10. Recovery of dues; 11. Safety appliance; 12. Superannuation;13. Supersession; 14. Transfer; 15. Victimization; And16. Conditions of work.

Ques.3 Define competency. How competency is linked to Human

resource system?

Ans: Meaning of competency



A competency is an underlying characteristic of a person/organizationwhich enables to deliver performance in a given job, role or a situation1. Thus the performance of an organization or an individual will depend onthe relevant competencies they possess and higher the level of competencies, superior will be the performance. Competencies allowfocus process-“How things are done?” not simply on outcomes.

Classification of competencies

Competencies can be broadly classified into three categories namelyorganizational competencies, job related competencies and personalcompetencies.Organizational competencies are unique factors that make anorganization competitive. According to C.K.Prahlad and Hamel who wrotethe famous book“Competing in the future”, organizational competencies- a) Providepotential access to a wide variety of markets b) Make a significantcontribution to perceived customer benefits of the end product c) Aredifficult for competitors to imitate.2Organizations need to focus theirefforts in the area of their competencies and strengthen them andoutsource the other activities. This is very important as thesecompetencies are fundamental to the success of the organization. Someof the examples for organizational competencies include Sony-miniaturization, Phillips-optical media, Honda-engines, and Intel-microchip. Job related competencies are those competencies which are required forperforming a specific job. These are the competencies someone mustdemonstrate to be effective in his job/role, task or duty. Thus these

competencies are job or role specific and vary from job to job. Acompetency model can be used to develop specific job relatedcompetencies and come out with a competency dictionary. Thesecompetencies are organization specific as roles and responsibilities mayvary from organization to organization even though the job title may bethe same. Job related competencies may become the criteria for most of the HR functions like selection, Training and development, performanceappraisal, compensation etc.Personal competencies are aspects of an individual they include theabilities of individuals to perform the activities within an occupation orfunction to the standard expected in employment. It includes the various

behavioral competencies apart from the knowledge and skill level of anindividual. These competencies include.Personal competencies like developing oneself, taking initiative, deliveringresults, showing commitment, and adaptability.b. Interpersonal competencies like influencing, relationship building,advising, team orientation, service orientation, cultural awareness,communication, and openness.c. Information oriented competencies like strategic thinking, businessunderstanding, conceptualizing, innovation, processing, analyzing and



comprehending.d. People management competencies like leadership, directing, buildingteams, facilitating performance, motivating, guiding people, andtransferring knowledge.

How competency is linked to Human resource system?

The four steps may be for competency linked to Human resource system:

1. Developing a Competency model2. Competency Mapping3. Linking Competencies to Compensating factors4. Designing compensation on the basis of actual competencies

Developing a competency model The basic need for a competency based compensation management is a

competency model. A competency model is one which identifies thevarious competencies required for performing a job and describing thesecompetencies in the form of indicators, which can be quantified. Eachcompetency can be quantified on a scale on the basis of its relativeimportance with respect to each job. This serves as a reference for allcompetency management activities in the organization. Competencymodel is organization specific as each organization may have its own wayof defining and quantifying competencies and competencies may beunique for each organization.We have been working with few organizations on issues related tocompetency management and this paper is based on the experience indeveloping the competency model and its applications. We adoptedfollowing procedure to develop standard competencies.1. We started with job/role analysis to identify the competencies requireto perform the job. Job descriptions and job specifications can throw alight on competency requirements for satisfactory performance of theduties and responsibilities, which are listed in them. If these are notavailable then job analysis is to be carried out. This gives us thepreliminary list of job specific competencies.2. Job holders and immediate superiors may have better understanding of the jobs and thus they can easily identify the critical competencies. Thuswe gathered further information with discussions and brainstormingsessions involving them. This helped us in refining the list of preliminary

competencies developed in the first step..

Competency MappingOnce the dictionary is ready, then the actual mapping process needs to becarried out. To do the mapping, the following steps were followed by us inmapping out competencies:1. A structured questionnaire was designed for the employee and hisimmediate superior. The same questionnaire is administered to both for



getting the rating.2. The employee whose competency is to be mapped is asked to ratehis/her own competency level in the questionnaire.3. The immediate superior’s ratings of the employee are also collected inthe same way.4. A weighted average of the ratings is computed to get the final score.70% weight was given to the superior’s rating and 30% to the employee’sself rating.

Linking the Competencies to Compensation Factors The next step in the competency based compensation model is to link thecompensation to competency mapping ratings of the employee. This isdone so by computing the “Compensation Factor” which is defined as theweighted average of the competency ratings an employee has obtained. This compensation factor can then be used to design compensationstrategies according to the organization’s compensation policy. It can alsobe used to fine tune the policy and adjust for internal and external

equities which are explored in the sections given below. Furthercomputations and adjustments might be required to the compensationfactor depending on situations, which will be explained as and when thosesituations are taken up for discussion.

Computing the Compensation Factor “F”:Let us assume that for a given level of employees “m” competencies havebeen identified.Let xp, where p = 1 to m represent the average criticality ratings of eachof the competencies identified. Let the matrix C, of the order 1 X m,represent the row vector of criticality ratings of competencies.

Let yij, where i = 1 to m and j = 1 to n, “m” is the number of competencies and“n” is the number of employees, represent the competence ratingexhibited by jth employee on ith competence. Let the matrix R, of theorder m X n, represent the vector of employee ratings on eachcompetency where “m” is the number of competencies and “n” is thenumber of employees. Since competencies vary across organizationalunits like departments or hierarchical levels, the number “n” typicallyrepresents the number of employees in a given unit.Let ΣCp where p = 1 to m represent the sum of the criticality ratings.Let the matrix F of the order 1 X n represent the row vector of eachemployee’s compensation factor. Then we can say thatF 1 X n = (1/ΣCp )* C 1 X m * R m X n --------------------- (1) The above equation actually gives out the compensation factors, whichare the weighted average of the employee’s ratings. The row vector F cannow be used to design the compensation packages of the employees of the unit and/or the hierarchical level. The next section uses this model todemonstrate how various compensation packages can be designed usingthe compensation factor vector.



Designing Compensation Packages: The compensation models vary across organizations. Two typical casesare very frequent. First is the case where the organization makes changesto the “Basic” salary component of the employee. Next is the case wherethe organization does not change the basic frequently, but has an

“Incentive” component to reward performances of employees which arehighly satisfactory. Below we explore both the cases sufficiently andprovide illustrations with the help of live data wherever necessary. It mustbe noted that while the competency mapping data is live, severalassumptions and adjustments have been made to the compensation data,to keep the Non-Disclosure Agreement sacred.

Ques.4 Think of a situation in which an employee is to be dismissed

from the organization, what will be the fair steps of dismissal

followed by the organization?

Ans: Dismissal and Discharge of an Employee

According to Article 311 of the Indian Constitution, which says that “noperson shall be dismissed or removed from service until he has been

given a reasonable opportunity to show cause as to why the proposedaction should not be taken against him?" The Model Standing Orders, too, lay down that, "before an employee isdismissed, he should be given an opportunity to explain thecircumstances against him." The following steps are followed for dismissal of an employee:a) Charge Sheet is Framed and Issued: The first step in the procedure is to frame a written charge sheet which isbased upon a written complaint against the employee in question, andwhich contains details of the offence with which he is charged and theallegation of misconduct made against him, and indicating the time limit

within which a reply to the charge sheet should be submitted to theauthorities. The employee is called upon to show because why a disciplinary actionshould not be taken against him. The contents and implications of the charge sheet may be explained tohim in his own language and in the presence of some reputable witness,before a copy of it is handed over to him. If he refuses to accept it, itshould be sent to his residential address "registered post with



acknowledgement due". If the employee refuses to take delivery of theregistered letter, or when it has been returned undelivered, it should bepublished in a local paper to ensure its wide publicity.b) Receipt of Explanation: The employee may submit his explanation within the prescribed period of time, or he may ask for an extension of time for its submission. In thelatter case, the request should be considered in good faith in accordancewith the rules of natural justice.c) Issue of Notice of Enquiry:If the explanation is received from the employee is found to beunsatisfactory, a notice of enquiry, mentioning the time, date and place,has to be given to him in which the name of the person or officer whowould conduct the enquiry would also be mentioned. The employee isrequired to be present at the appointed time and place, together with hiswitness, if he has any.d) The Holding of Enquiry:On the appointed day and at the appointed place and time, the enquiry is

held by the Enquiry Officer in the presence of the employee. The contentsof the charge sheet and an explanation of the procedure to be followed atthe enquiry are communicated to the worker. If he pleads his innocence,the enquiry proceeds; but if he pleads guilty, unconditionally and inwriting, the enquiry is dropped.e) The Findings:Once the enquiry is over, the Enquiry Officer has to give his findings,which should invariably contain the procedure which was followed, theparty’s statements, the documents produced and examined, the chargesmade and the explanations given and the evidence produced. The officershould then record his own findings on each of the charges and the

grounds on which he has come to a particular conclusion. He shouldspecifically mention which charges have been proved and which have notbeen proved. He then submits his findings to the authorities empoweredto take a disciplinary action against the employee. He, however, is notrequired to make any recommendations.a) On receiving the report, the executive authorized to take a decisionthereon passes an order of punishment.b) Communication of the order:A copy of the orders is then handed over to the employee.Discharge of an Employee The following conditions must necessarily be satisfied before an employeeis discharged from service by way of punishment for misconduct.

a) The misconduct of the employee is of such a nature as to indicate thathis discharge or dismissal would be an appropriate punishment and thatthis kind of punishment has been provided in the Standing Orders.b) An enquiry must be held by the employer into the misconduct which anemployee has been charged with. This enquiry should be held only after acharge sheet has been preferred against him, and he has been given duenotice of the time, place and date of enquiry.c) The officer should be held in such a manner as to ensure that it would



be fair and proper and in conformity with the principles of natural justice. The worker must be given an adequate opportunity to defend himself andto present witness in support of his contention or case.d) The officer holding the enquiry should not be one who may bedisqualified on the ground of bias, personal interest, or on the ground of his having been on eye witness to the misconduct with which theemployee is charged.e) At the conclusion of the enquiry, the findings, based on recordedevidence, should be recorded by the enquiry officer.f) The findings must necessarily be based on recorded evidence andshould not be perverse.g) The order of dismissal or discharge against the employee must bepassed in good faith.h) The order must be duly communicated to the employee against who ithas been passed.

Ques.5 Suggest few measures to improve employee morale.

Ans: Measurement of Employee Morale

Signs of low morale are generally not noticed till it is obviously, low or when

something goes amiss. By the time the management recognizes the fact thatmorale has deteriorated, it is faced with one crisis or another. Perceptivemanagers are, therefore, constantly on the lookout for clues to any deteriorationin the morale of the employees.Dale Yoder and others pointed out the following as signals of low morale:1. Employee unrest.2. High rate of absenteeism.3. Tardiness.4. High employee turnover.



5. Grievances.6. Need for discipline7. Fatigue and monotony.

Improving Morale

There are a number of measures which can be used to control the warningsignals of low morale.

The following are the positive measures to be taken to bring job satisfaction tothe employees and reconcile individual interests with the interests of theorganization.1. Creation of whole jobs.2. Job enrichment.3. Building responsibility into a job.4. Modifying the work environment.5. Flexing working hours.6. Job sharing.7. Rotation of jobs.

8. Profit sharing.Morale can also be improved by adapting several other measures such asemployee contest, special recognition and awards to long service employees,film shows to employees during their lunch hour, free coffee during rest pauses,and training the supervisors in how to handle people.1. Under this method, complete jobs are assigned to the workers. The complexityof a job should be increased so that it may appeal to their higher needs.2. Job enrichment tries to deal with dissatisfaction by increasing job depth. Underthis, individual employees may be given responsibility for setting their own workpace, for concerning their own errors, and/or for deciding on the best way toperform a particular task.3. Employees should be encouraged to take risk decision.4. This can be achieved by:

i) Developing work groups;ii) Developing the social contacts of the employees;iii) The use of music;iv) Regular rest breaks.5. Flex time permits employees to arrange their work hours to suit their personalneeds and lifestyles.

This is particularly suited to situations with fluctuating workloads. Flex timeemployees are responsible for coordinating their functions with other employeesand thereby have more responsibility and autonomy.6. Two workers divide a fulltime job between themselves splitting not only thehours of work but also the salary.7. This reduces employee's boredom which arises out of the monotonous nature

of his work.8. Morale can be improved by effective profit sharing schemes. In addition to itseconomic aspects, profit sharing has also psychological aspects relating tofriendly move by the management in providing the workers an opportunity toparticipate in the profits.



Ques.6 Explain Victor Vroom’s Expectancy theory of motivation.

Ans:

Motivation

The personnel function is really all about motivation. It is agreed thatunless individuals are motivated to make sufficient potential to performeffectively, they may not achieve the level of performance that is desiredfrom them. Managerial people are always facing the problems of motivating their subordinates to release their potential most effectivelyand thereby permit the desired goals of the organization and the needs of employees to be achieved. Knowledge of the motivational processprovides the basis for understanding why people do what they do.Motivation is positively correlated with concepts of (1) level of aspiration,(2) degree of commitment, and (3) inclination towards action.It is rightly said, "You can buy a man's time, you can buy a man's physical

presence at a given place, but you cannot buy his enthusiasm, initiativeand loyalty." Motivation aims at transforming the ‘ability to do’ into ‘thewill to do’. Motivated employees are in a state of tension. To relieve thistension, they engage in activity. The greater the tension, the greater shallbe the activity to bring about relief.

Victor Vroom’s Expectancy theory of motivation

The expectancy theory of motivation is suggested by Victor Vroom. Unlike Maslow and

Herzberg, Vroom does not concentrate on needs, but rather focuses on outcomes.

Whereas Maslow and Herzberg look at the relationship between internal needs and the

resulting effort expended to fulfill them, Vroom separates effort (which arises from

motivation), performance, and outcomes.

Vroom, hypothesises that in order for a person to be motivated that effort, performance

and motivation must be linked. He proposes three variables to account for this, which he

calls Valence, Expectancy and Instrumentality.

Expectancy is the belief that increased effort will lead to increased performance i.e. if I

work harder then this will be better. This is affected by such things as:



• Having the right resources available (e.g. raw materials, time)

• Having the right skills to do the job

• Having the necessary support to get the job done (e.g. supervisor support, or correct information on the job)

Instrumentality is the belief that if you perform well that a valued outcome will be

received i.e. if I do a good job, there is something in it for me. This is affected by suchthings as:

• Clear understanding of the relationship between performance and outcomes – e.g.the rules of the reward ‘game’

• Trust in the people who will take the decisions on who gets what outcome

• Transparency of the process that decides who gets what outcome

Valence is the importance that the individual places upon the expected outcome. For example, if I am mainly motivated by money, I might not value offers of additional time

off.

Having examined these links, the idea is that the individual then changes their level of

effort according to the value they place on the outcomes they receive from the process

and on their perception of the strength of the links between effort and outcome.

So, if I perceive that any one of these is true:

• My increased effort will not increase my performance

• My increased performance will not increase my rewards

• I don’t value the rewards on offer

...then Vroom’s expectancy theory suggests that this individual will not be motivated.This means that even if an organization achieves two out of three, that employees would

still not be motivated, all three are required for positive motivation.

Here there is also a useful link to the Equity theory of motivation: namely that people willalso compare outcomes for themselves with others. Equity theory suggests that people

will alter the level of effort they put in to make it fair compared to others according to

their perceptions. So if we got the same raise this year, but I think you put in a lot less

effort, this theory suggests that I would scale back the effort I put in.

Crucially, Expectancy theory works on perceptions – so even if an employer thinks theyhave provided everything appropriate for motivation, and even if this works with most

people in that organisation it doesn’t mean that someone won’t perceive that it doesn’t

work for them.

At first glance this theory would seem most applicable to a traditional-attitude work

situation where how motivated the employee is depends on whether they want the reward



on offer for doing a good job and whether they believe more effort will lead to that

reward.

However, it could equally apply to any situation where someone does something because

they expect a certain outcome. For example, I recycle paper because I think it's important

to conserve resources and take a stand on environmental issues (valence); I think that themore effort I put into recycling the more paper I will recycle (expectancy); and I think

that the more paper I recycle then less resources will be used (instrumentality)

Thus, this theory of motivation is not about self-interest in rewards but about the

associations people make towards expected outcomes and the contribution they feel they

can make towards those outcomes.

Other theories, in my opinion, do not allow for the same degree of individuality between

people. This model takes into account individual perceptions and thus personal histories,

allowing a richness of response not obvious in Maslow or McClelland, who assume that people are essentially all the same.

Expectancy theory could also be overlaid over another theory (e.g. Maslow). Maslowcould be used to describe which outcomes people are motivated by and Vroom to

describe whether they will act based upon their experience and expectations.

SEM 1 MB0043 2 Human Resource Management

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