Tom finds out: Tom has baked on the Mill Lane night shift for three years. He knows every recipe, shapes more loaves a night than anyone except Priti, and showed Ade the ovens when Ade joined in June.
In the break one night, Ade mentions his pay: $17 an hour. Tom is paid $16.
Nothing about Tom's own pay has changed. The next night he works a little slower anyway.
Tom was content with $16 until that break. His pay did not fall; what changed is what he measured it against. The American psychologist J. Stacy Adams described this in 1963 (equity theory): people judge whether their reward is fair by comparing it with what someone else gets for what that person puts in.
What Tom weighs up
What he puts in (inputs)
Effort, hours, skill, experience, loyalty, the help he gives others.
Tom: three years on the shift, every recipe, the fastest shaper after Priti, and he taught Ade the ovens.
What he gets out (outputs)
Pay, bonuses, fringe payments, praise, status, a chance of promotion.
Tom: $16 an hour, the same shifts and the same thanks as everyone else.
Who he compares with (the referent)
A colleague, a friend at another business, or himself in an earlier job.
Tom picks Ade: newer, still learning the sourdough, and paid $1 an hour more.
The verdict
Fair, if his outputs for his inputs match Ade's outputs for Ade's inputs.
Tom puts in more and gets out less, so he feels under-rewarded. The gap is called inequity.
| Tom | Ade | |
|---|---|---|
| Inputs | Three years, every recipe, fastest shaper after Priti, trains others | Since June, still learning the sourdough |
| Outputs | $16 an hour | $17 an hour |
| How it looks to Tom | More in, less out | Less in, more out |
A balance, not a pay rate: Tom would not mind Ade earning more if Ade put in more. Equity is about the balance of inputs to outputs, set beside somebody else's balance.
It is also about how things look to Tom. Lena had a reason: in June, bakers willing to work nights were scarce, and $17 was what it took to hire Ade. Tom does not know that, and what he believes is what moves him.
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So what does Tom do about it? Adams said a person who feels under-rewarded tries to bring the balance back, and there are only a few ways to do it. Each one shows up at the bakery.
Five ways Tom can restore the balance
Put in less
He stops staying after 10 a.m. to finish a late batch and leaves the new bakers to Priti. His effort drops until it matches what he thinks he is paid for.
Ask for more
He asks Priti, then Lena, for $17 an hour. If he gets it, the balance is back and nothing else has to change.
See it differently
He tells himself Ade must have had a better offer elsewhere, or does work Tom never sees. Nothing changes except the way he reads the facts.
Compare with someone else
He stops comparing himself with Ade and thinks of friends at Goldcrust, who work longer shifts for less. With a new referent, his own deal looks fair again.
Leave
He answers Goldcrust's advert for night bakers. The bakery loses its fastest shaper and three years of know-how with him.
The other side: Ade: Ade overhears. He learns he is paid more than a baker with three more years at the ovens. Adams said the over-rewarded can feel uneasy too, and may work harder to justify the gap.
But people put up with being overpaid far more easily than with being underpaid, and the unease soon passes. Unfairness in their own favour rarely costs a business much; unfairness against them does.
What Lena can do
- Explain how pay is set. If Tom knew $17 was what it took to fill a night job in June, he might read it differently.
- Pay for what people put in. A pay scale that rises with years and skills makes the balance visible to everyone.
- Put Tom's pay right. $1 an hour over a 40-hour week is $40 a week, far less than finding and training a new night baker.
- Add outputs that are not pay. Make Tom the trainer for new bakers, with the title and the recognition that go with it (non-financial rewards, 2.4.3).
Fair pay stops the damage: Raising Tom to $17 removes his grievance. It does not make him try harder than he did before that break.
That is the same pattern as Herzberg's hygiene factors in 2.4.2: put the unfairness right and effort returns to where it was. Equity theory is strongest at explaining why effort falls.
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Same bonus, two shops: Lena wants more sales in the shops. She announces a bonus: any shop that raises its monthly sales by 20% earns $300, shared among its counter staff.
At High Street, Aisha's four counter staff start offering a cake with every loaf. At Market Square, Kofi's three counter staff shrug.
Same bonus, same company. Why does one team try and the other not?
The Canadian-born psychologist Victor Vroom answered this in 1964 (expectancy theory). A reward on offer is not enough. Before people put in extra effort, they ask themselves three questions, often without noticing. If the answer to any one of them is no, the effort does not come.
The three questions at Market Square
Can I do it? (expectancy)
Will more effort lead to the performance asked for?
Market Square's sales rise and fall with the market days, and the council is closing the square for road works in March. The staff do not believe 20% is possible, whatever they do.
Will I get it? (instrumentality)
Will the performance really bring the reward?
The rule says the bonus is paid 'if the company's profits allow'. The staff never see the profits, so they doubt it will be paid even if they hit the target.
Do I want it? (valence)
Is the reward worth having to me?
$300 shared by three is $100 each for a month of extra selling. One of them, a student, would rather have a Saturday off.
Vroom put the three together as a multiplication: motivation = expectancy × instrumentality × valence. Rate each from 0 (not at all) to 1 (certain, or wanted very much). Because the three are multiplied, a score near zero on any one pulls the whole answer near zero, however high the other two are. (Valence can even fall below zero, for an outcome someone wants to avoid.)
| Expectancy | Instrumentality | Valence | Motivation | |
|---|---|---|---|---|
| High Street | 0.8: a busy street, and customers who say yes to a cake | 0.5: the same vague rule | 0.6: $75 each | 0.8 × 0.5 × 0.6 = 0.24 |
| Market Square | 0.1: the square closes in March | 0.5: the same vague rule | 0.4: $100 each, but one wants time off | 0.1 × 0.5 × 0.4 = 0.02 |
One weak link is enough: Doubling the bonus to $600 raises the valence at Market Square. It does nothing about the road works. If the staff still believe 20% is impossible, a bigger prize for an impossible target is still close to nothing.
Find the weakest link first, then fix that one.
Lena rewrites the Market Square scheme with Kofi. Each change repairs one of Vroom's links.
| Link | What was wrong | What Lena changes |
|---|---|---|
| Expectancy | A 20% sales rise, with the square closed in March | A target the staff can move: one cake sold with every four loaves, counted at the till |
| Instrumentality | Paid 'if profits allow', and nobody can check | A written rule, the count on the wall each week, the bonus paid with the next month's wages |
| Valence | $100 each, and one of them wants time off | Each person chooses the cash or a Saturday off |
Where equity comes back in: The new scheme passes all three of Vroom's questions at Market Square. Then Kofi's staff hear that Aisha's team, on the busiest street in town, earns the same bonus for the same target and hits it in two weeks.
The reward is reachable, certain and wanted, and it still feels unfair. Expectancy theory asks whether the reward is worth the effort; equity theory asks whether it is fair beside what others get. A reward scheme has to pass both.
Equity theory's limits
- Fairness is felt, not measured: Lena cannot see how Tom weighs his inputs
- A manager rarely knows who each person compares with
- Some people mind unfairness far more than others
- It explains why effort falls better than what makes it rise
Expectancy theory's limits
- It assumes people weigh up odds and rewards; many act from habit or feeling
- Each person's three answers differ, so a manager has to know every worker
- It says a reward must be wanted, not which rewards people want
- The three scores cannot really be measured, only estimated
What they add
- Both explain why one reward works in one team and fails in the next
- Both point to fixes: explain pay openly, set targets people can reach, keep promises
- Maslow and Herzberg (2.4.1, 2.4.2) say what people want; these two say how they weigh it up
Using them in an answer: Name the theory, then use its own words: inputs, outputs and the person compared with for Adams; expectancy, instrumentality and valence for Vroom.
Then point to the one comparison or the one link that is weak in the case, and say what it does to effort.
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How this comes up: In a case with a table of staff survey results: with reference to expectancy theory and the table, explain one reason why the manager should be concerned, for two marks. One is for showing what the theory says; the other is for a finding in the table tied to it.
In longer questions, equity and expectancy are theories to use when you weigh how a bonus, a pay change or a new reward will affect motivation. A case about fair pay invites Adams.
The two-mark pattern
- Say what the theory needs. People try harder only if they believe effort brings the performance, the performance brings the reward, and the reward is worth having.
- Find the row where a link breaks. Only 17% of the Mill Lane bakers believe they can reach the waste target with the ovens they have.
- Join the two. Expectancy is low, so the bonus will not raise effort, whatever the other rows say. That is the reason for concern.
The trap: theory and table that never meet: Reciting Vroom's three terms shows the theory and no more. Listing the worst figures in the table, with no link named, does not show the theory at all.
The figure has to show one of the links breaking: can I do it, will I get it, do I want it. Say which one, and what that does to effort.
With reference to expectancy theory and Table 1, explain one reason why Lena should be concerned by the results of the bakers' survey.
Model answer plan
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