Expectancy and Equity Theory

Expectancy and Equity Theory
Expectancy theory is among other theories that attempt to study and what
influences the decisions they make from an economic and psychology
perspective. The underlying concept of this theory is known as
subjective expected utility. SEU assumes that individuals can process
information cognitively, and make rational decisions. Employees assess
their ability to achieve set goals, and the rewards or punishments that
would result.
There are several practices that seem to be based on the concepts of
this theory in this company. One of them is hiring individuals whose
personalities and abilities closely match the organizations goals and
core values. During recruitment, the organization employs this strategy
to ensure that employees do not require to make radical adjustments to
their behaviors. Instead, the employees hired have the strengths that
match the organization’s goals, and after basic training, they easily
plug into the system and begin bearing fruit.
Another practice is performance based promotion and remuneration. This
organization uses performance indicators to make most of the decisions,
not only employee related. For instance, tendering for suppliers and
other key business partners is based on performance contracting. The
best bidder by quality and cost gets the tender.
As for employees, performance evaluations are done which determine the
rewards to be extended to employees. This is fair because it is expected
that employees are aware of the rewards and punishments linked to
performance. Therefore, the employees have to work hard to meet those
targets to attract the linked award. The organization helps employees
sustain high ambition by running employee morale-boosting programs.
These two practices show a practice of expectancy theory as they well
under expectancy and instrumentality concepts which the theory promotes.
Dreher, G., & Dougherty, T. (2002).  Human resource strategy: A
behavioral perspective for the general manager Boston, MA : 
McGraw-Hill/Irwin.  ISBN 0256211892

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