Equity in a workplace means everyone receives fair treatment.

There's a transparency to cause and

effect, and everyone knows what to expect in terms of consequences and rewards. When equity exists,
people have equal access to opportunities. It sets up an advantageous environment for both the
employees and the employer.

ADVANTAGES

Achievement
The opportunities afforded by an equitable workplace motivate employees to achieve.
Believing that rewards will be commensurate with effort, employees with ability and drive
strive to shine. This behavior is explained by equity theory, which links fairness to employee
effort. When people receive bonuses, pay and promotions at a job that equitably rewards
merit, the company ends up with the right people in the right places doing the right things.
Equity, then, sets the stage for a dynamic culture of achievement.

Employee Retention
Equity also encourages employee retention. An employee who believes he can have a bright
future with a company wants to stay and claim it. When employees stay, companies are
relieved of brain drain, the expense of training replacement employees and watching former
employees enrich competitors with training provided by the original employer.

Attracting Talent
Attracting talent is easier for companies that pursue workplace equity and foster a
meritocracy than it is for those that do only enough to avoid breaking employment laws.
People who have a lot to offer want to be compensated fairly without worrying about hidden
agendas that lead to preferential treatment for a chosen few. Talented people ready to excel
are excited that cause and effect rules in an equitable workplace. It means investment of
brains, energy and dedication pays off. It also gives these achievers the chance to work with
other achievers.

Breadth by Diversity
Diversity is often the result of workplaces that are functioning equitably, assuming that the
potential workers have equitable access to educational opportunities. Diversity in a
workplace means more experience, more perspectives and more source material to draw
from in brainstorming, solving problems and creating innovative products or services. A
company's intellectual capital gains depth and breadth through diversity.

Enhanced Bottom Line

A culture that achieves, possesses breadth and depth, retains employees and draws top
talent makes a company competitive and favorably affects its bottom line. Such companies
also have high morale among employees, which also enhances the bottom line. A 2010
study published in "Inc." showed that companies engaging employees at high levels
performed better than normal in the stock market and enjoyed higher shareholder returns
than other companies.

IMPORTANCE OF EQUITY TO EMPLOYEES AND EMPLOYERS

Expectation of Reward
One of the more important features of workplace equity lies in expectations. Equity theory
states that people's behavior correlates to the fairness with which they're treated, according
to Warren Plunkett, Raymond Attner and Gemmy Allen, authors of "Management: Meeting
and Exceeding Customer Expectations." Employees will put forth an effort commensurate to
their expectation of reward. If equity exists and rewards are fair, employees feel motivated
to give their best effort. When employees expect to be treated unfairly, they either quit or
perform more poorly so that their perceived effort matches the inadequate reward they
expect. Thus, to employees, equity expectations determine performance level, which, in
turn, affects the performance of the employer's business as a whole.

Meritocracy
For both employer and employees, establishing a meritocracy is important, and workplace
equity lays the foundation for that. A meritocracy means that the rewards people get -raises, bonuses, promotions and recognition -- are achieved through merit, not as a result of

preferential treatment. A culture of meritocracy creates a win-win situation where employees

become achievers and find their proper place in the company. Meanwhile, the employer
ends up with a company staffed for maximum productivity and achievement.

Morale
High achievement comes easiest when employers communicate expectations. Equity plays
an important part in this since, as far as opportunity goes, there are no hidden agendas.
Managers set quantifiable goals and employees reach for them without fear of being used
while someone else gets ahead. In short, equity creates a climate of security and trust
where people can get on with the business of business. The sense of safety also fosters a
sense of belonging. Blended with a culture that supports achievement through reward, the
climate becomes one of high morale.

Retention
When employees have high morale, they are too happy to quit their jobs. On the other hand,
employers pay when workplace equity is lacking. Workers feel no need to be loyal when they
aren't treated fairly. For an employer, retaining employees means training and development
investments see returns for the company instead of for the competition. Meanwhile, a
company with a reputation for equitable treatment of employees attracts good prospects,
potential employees who want to get on with the company to get ahead and enjoy quality of
work life, which contributes to quality of life in general. Equity is a reason for employees to
invest themselves in a company.

Two-Factor Theory

Believing an individuals relationship to work is basic, and that attitude toward work can
determine success or failure, psychologist Frederick Herzberg wondered, What do people want
from their jobs? He asked people to describe, in detail, situations in which they felt

exceptionally good or bad about their jobs. The responses differed significantly and led
Hertzberg to his two-factor theory

also called motivation-hygiene theory. 11

As shown in

Exhibit 7-2, intrinsic factors such as advancement, recognition, responsibility, and achievement
seem related to job satisfaction. Respondents who felt good about their work tended to attribute
these factors to themselves, while dissatisfied respondents tended to cite extrinsic factors, such as
supervision, pay, company policies, and working conditions. To Hertzberg, the data suggest that
the opposite of satisfaction is not dissatisfaction, as was traditionally believed. Removing
dissatisfying characteristics from a job does not necessarily make the job satisfying. As
illustrated in Exhibit 7-3, Herzberg proposed a dual continuum: The opposite of satisfaction
is no satisfaction, and the opposite of dissatisfaction is no dissatisfaction. According to
Herzberg, the factors that lead to job satisfaction are separate and distinct from those that lead to
job dissatisfaction. Therefore, managers who seek to eliminate factors that can create job
dissatisfaction may bring about peace, but not necessarily motivation. They will be placating
rather than motivating their workers. As a result, Herzberg characterized conditions such as
quality of supervision, pay, company policies, physical working conditions, relationships with
others, and job security as hygiene factors. When theyre

adequate, people will not be

dissatisfied; neither will they be satisfied. If we want to motivate people on their jobs, Herzberg
suggested emphasizing factors associated with the work itself or with outcomes directly derived
from it, such as promotional opportunities, personal growth opportunities, recognition,
responsibility, and achievement. These are the characteristics people find intrinsically rewarding.

MOTIVATORS
Factors that directly
motivate people to
work harder.

HYGIENE
Factors that
de-motivate if not
present but not
actually motivate
people to work harder.

The two-factor theory has not been well supported in the literature, and it has many detractors.
Criticisms include the following:
1.

Herzbergs methodology is limited because it relies on self-reports. When things are going

well, people tend to take credit. Contrarily, they blame failure on the extrinsic environment.

2.

The reliability of Herzbergs methodology is questionable. Raters have to make

interpretations, so they may contaminate the findings by interpreting one response in one manner while
treating a similar response differently.
3.

No overall measure of satisfaction was utilized. A person may dislike part of a job yet still

think the job is acceptable overall.

4. Herzberg assumed a relationship between satisfaction and productivity, but he looked only at
satisfaction. To make his research relevant, we must assume a strong relationship between satisfaction and
productivity.

Regardless of the criticisms, Herzbergs theory has been widely read, and few managers

are unfamiliar with its recommendations.

Written Report: The Human Side of Enterprise

The individual and the organization enter into a social transaction in which both parties derive mutual benefits.
Individuals achieve their goals through and with the assistance of organizations just as organizations employ
individuals to attain their objectives.
Whyte's SOCIAL ETHICS Whyte stated that "a new social ethics had developed to rationalize the organization's
demand for whole-hearted dedication and loyalty."
The 2 Propositions the Social Ethics upholds:
(1) Belief in "belongingness" as the ultimate need of the individual.
(2) A belief in the application to achieve the "belongingness."
Chris Argyris explanation of the Conflict between Man and Organization:
Argyris believes that there exists incompatibility between the needs of employees and formal organizations and that
Employees desire INDEPENDENCE while Organizations want DEPENDENCE. Such conflict of interest brings
about frustration, sense of failure and loss of self-esteem. Conformity in Organizations Implied in the organizationman theory is that man is required to conform to the organization rather than the organization conforming to the
individual. Conformity presupposes dependence on the norms established by others without independent thinking.
3 Groups to which One conforms:
(1) Organization itself
(2) Informal work groups
(3) External Community

Some studies showed that managers who scored low in conformity were given higher ratings by their superiors.
Business organizations encourage initiative and creativity and have been among the supporters of individuality.
Conformity is not a hallmark of business culture unlike that which exists in government, church or in labor
unions/quarters.
Organizational Influence
Through its policies, systems, procedure and rules, organizations resort to conformity in order to achieve
coordinated action in realizing their objectives. Conformity may be either of action (may be on the job or off the job
by means of educational programs, hobby groups etc.) or of thought. If management tries to influence employees in
an area not considered legitimate, resentment may develop.

Rights to Privacy
Privacy refers to the employees' thoughts, opinions, and motives, to his private psyche more than his private
activities. Religious, political and social beliefs are part of the employees' inner self and should, therefore, not to be
subjected to analysis as a requirement for getting or keeping a job, unless the person's attitudes adversely affect his
job performance.

People's Complex Needs

Abraham Maslow's Hierarchy of needs (psychological needs; safety/security needs; belongingness and love needs;
esteem; cognitive; aesthetic; self-actualization needs; and self-transcendence needs) attempt to understand and
account for human behavior.
"The Human Side of Enterprise" claims that, "Man is a wanting animal- as soon as one of his needs is satisfied,
another appears in its place. This process is unending. It continues from birth to deaths. Most continuously puts forth
effort - works, if you please- to satisfy his needs." - Douglas McGregor