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Posted on September 3rd, 2012, by

Motivation is a highly important issue, both for organizations and for individuals. It is the working force that puts the people into action and allows the organization to achieve its goals (Chandler & Richardson, 2008). Proper motivation increases the efficiency of work, shapes organizational structure, creates stable atmosphere in the team. The lack of motivation quickly results in deterioration of the organization, decrease of performance, achievements etc.

For individuals, good motivation gives the opportunity to set and achieve personal goals, to fill in the pyramid of needs, receive satisfaction from work and in general to improve the quality of living in all senses. Therefore, for managers and for employees it is important to study the background of motivation and the factors influencing it. There are several key theories concerning motivation, equity and expectancy theories in particular. The aim of this essay is to discuss the concepts of these theories and analyze the applicability of these theories to leadership.

Equity theory deals with perception of employers about fair and unfair distribution of resources. It was created in 1962 by John Stacey Adams, and is based on the theory of needs by Maslow and Hertzberg’s theory of two factors (Thomas, 2000). This theory regards the individual as a rational thinking human being, and can be classified as one of the cognitive theories. Equity theory supposes that an individuals’ motivation is positive (in other words, the individual considers that he is treated fairly) when the ratio of his inputs into work and outputs can be considered equal compared to the other employees. The inputs that the employee makes usually are the work itself, commitment, efforts, tolerance, trust, determination, personal sacrifices etc. Outputs are defined as the positive and negative consequences that an individual perceives a participant has incurred as a consequence of his/her relationship with another (Maddock & Fulton, 1998). Outputs include adequate work compensation, different benefits, recognition and reputation, esteem and praise, perspectives etc. It has been noticed that individuals have the best motivation when the ratio of their inputs and outputs is close to 1.

Equity theory states that people are seeking to maximize their outcomes, i.e. rewards minus costs. When individuals consider that unfairness exists, they feel distressed. There are two kinds of unfairness underpayment and overpayment. In the situation of underpayment employee may increase outcomes or decrease input to come to balance (or leave, when balance is impossible). In case of overpayment, the employee may increase inputs to reach balance, decrease outcomes (rarely) and increase the subjective value of his work, coming to distortion. Therefore, to ensure positive motivation, managers should maintain the balance of inputs and outputs close to 1, and eliminate unfairness.

Expectancy theory, introduced by Victor Vroom, explains the process of choice making by individuals. It is based on the idea that people make choices between alternatives trying to maximize pleasure and minimize pain (Latham, 2006). Employee’s performance depends on many individual factors such as personality, skills, abilities, knowledge etc. Also, expectancy theory states that motivation is actually a product of two probabilistic measures valence and expectancy (instrumentality).

Valence is the emotional appraisal of the work outcomes by the individual; it measures how much the individual wants the consequences of completing the task. Instrumentality is the probability (more exactly, the measure of belief of the employee) that the desired outcome will take place in case the task is completed successfully. Expectancy measures the level of confidence of the employee that he/she will be able to complete the task successfully. Actually, the theory of expectancy states that motivation is the product of these three factors. This concept or formula may be used to measure such things as job satisfaction, choice of occupation, workforce dynamics, retaining of employees, and the efforts that they have to dedicate to work (Green, 1992).

Thus, expectance theory suggested that individuals are positive motivated when they see the correlation between efforts and performance, believe that good performance will lead to desired results, and the reward will be satisfying important needs.

For leadership, enhancing motivation is one of the key important features. Both theories and their applications are important for ruling the working collective: equity theory helps to avoid imbalance and disappointments among employees, while expectancy theory gives the keys for motivating each employee and stimulating personal development with appropriate needs. This theory may also help the leader understand which factors are slowing down the working progress, and which conditions should be changed in order to increase motivation and inspire the others to develop further.

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