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Equity Theory

Is equal pay the same as equitable pay? First you need to know the difference between the two. Equal pay would be a female doing the job of a construction electrician getting the same pay as her male counter part. Equitable pay is the perceived fairness when employee's compare pay from their job with other jobs in the company. You also need to know that pay adequacy is the pay level that allows the employee to meet basic needs and to achieve a standard of living that is minimally acceptable to the employee. (Kirkpatrick 1996) the last thing to describe is Equity Theory. Equity Theory maintains that people seek a balance between there

efforts and rewards and the rewards that others receive for their efforts. Thus, if one employee believes that his or her efforts are being under-rewarded in comparison to his or her colleagues' efforts, the employee will attempt to restore balance by either securing additional rewards or reducing his or her efforts.

Equity pay can undercompensate or overcompensate, two forms of inequity, and cause "distress" that workers seek. The results suggest that it is not necessarily


or actual return generated by the position. In those rare cases in which market pressure and operational necessity demand that a position be paid more than the return it will generate, impact analysis will keep management apprised of the negative return to prevent its being lost or forgotten.

distressing. Underpaid workers may experience feelings of deprivation and of being cheated, whereas overpayment may produce feelings of guilt and unworthiness. These different expressions of distress may engender quite different strategies for reduction. How workers reduce or avoid feelings of inequity caused by overpayment. Individuals would rather raise their estimations of their own inputs than reduce the valuation of their outcomes; the latter process could be far more costly to the individual. Attitudes that devalue the job and/or its outcomes could eventually lead to job dissatisfaction, which is likely to diminish one's overall well-being. Kirkpatrick emplies that "If employee's are not meeting pay adequacy through pay or other resources, then striving to maintain fair pay is irrelevant." (P158)

An organization

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Approximate Word count = 754
Approximate Pages = 3 (250 words per page double spaced)


  

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