In the context of equity theory, which of the following is considered an outcome?

Equity Theory

Equity theory proposes that individuals estimate the ratio of what has been contributed (i.e., inputs) to what has been received (i.e., outcomes) for both themselves and a chosen referent other (Adams, 1965). Inputs are the employee's contributions (e.g., education, performance, work experience), while outcomes constitute rewards that employees receive in exchange for their contributions (e.g., compensation, promotions, career development opportunities). If an imbalance between inputs and outcomes occurs, individuals are likely to reduce the discrepancy by adjusting their attitudes, contributions, or outcomes to restore the balance between the two ratios.

2 History of Justice in Organizations

Adams’ work on equity theory is the foundation for psychological work on fairness. The focus of this work was on the fairness of outcomes, or what has become known as distributive justice. Organizational researchers recognized the potential effect of distributive justice on organizational functioning and, thus, it has been a major focus of organization-based research since the 1980s. However, as it became clearer that employees’ reactions to organizational events were not based solely on their perceived notions of outcome fairness or distributive justice, the direction of research followed from work in social psychology and process-related issues began to be examined. Thus, procedural justice, or the fairness of the processes used to determine outcomes, became a major research focus and this has continued into the 21st century. Procedural justice is enhanced by providing employees with opportunities for voice or input into the process and by following fair and consistent rules. In fact, Leventhal suggested a set of rules to follow to ensure procedural justice that included accuracy, ethicality, and representativeness.

In the mid- to late 1980s, Bies suggested a third dimension of organizational justice that he called interactional justice. Interactional justice is believed to be related to procedural justice, but in particular it describes how decisions are communicated to employees and focuses on interpersonal treatment. That is, whereas procedural justice focuses on the fairness of organizational procedures involved in decisions, interactional justice deals more with how these decisions are conveyed to employees.

There continues to be disagreements among researchers as to the number of independent dimensions of justice. Some believe only in the traditional distinctions between procedural and distributive, where interactional justice is subsumed under procedural justice. Others maintain interactional justice as a third independent dimension of justice. It has also been suggested that interactional justice is composed of two dimensions: (i) interpersonal justice, which focuses on treating individuals with respect, dignity, and courtesy, and (ii) informational justice, which focuses on the explanations provided to individuals about the decision-making process.

1.1 Four roles for package appearance

By extension, brand equity theory suggests there are at least four roles for appearance as a carrier of brand equity in the store (Garber, Burke and Jones, 2000). As shown in Figure 25.2, these would include: (1) identifying the category to which the product belongs (e.g. white paper bags for flour); (2) identifying the brand (e.g. the barbell-shaped Listerine bottle); (3) conferring meaning to the brand or reinforcing or heightening existing meanings and associations (e.g. the festive, carnival-like yellow and red of McDonald's that connotes fun particularly to a child's sensibilities, or the small size of caviar jars or expensive perfumes, meant to convey preciousness); and (4) providing novelty or contrast to make the brand more distinctive in and of itself, or more eye-catching and salient with respect to its competitors (e.g. Obitz soft drinks, with gelatin balls floating in liquid, which provide a novel mouth feel as well as visual experience!).

Any given product or package design must fulfill all four functions simultaneously. The package represents the product to all consumer segments, serving the needs of disparate groups and serving disparate purposes across all stages of the choice process. But some of these functions may be in conflict with others. For example, a package shape, size or color that is highly associated with a category may do a good job of denoting a new product as a category member, but may not allow it to stand out sufficiently to get notice or purchase consideration.

When designing a new package, a manufacturer can borrow on the visual conventions established by existing brands in the category that connote typicality and familiarity. For example, a new dishwashing liquid may use the color green, similar to Palmolive, to communicate gentleness. This approach has the virtue of reassuring the shopper by fulfilling expectations of what a brand in the category should look like, thus providing a measure of legitimacy and credibility (Dichter, 1975). Consistent with this, Loken and Ward (1990) report that consumers prefer products which tend to match their expectations. Conversely, package novelty and contrast refer to the package's ability to stand out visually from its surroundings, and to draw attention to itself through its novel appearance, as discussed further in Section 2.2.

Emotion and Equity, Justice, and Exchange

Other social psychological theories – including equity theory (Walster et al., 1978), justice theory (Hegdvedt and Parris, 2014), and exchange theory (Lawler, 2001; Lawler and Thye, 1999) – also detail the coconstitutive relationship between emotion and social structure.

Equity theory, for instance, predicts that individuals are also likely to experience negative emotion when they perceive an inequity in their interactions with others. Originally, the theory predicted that individuals would experience ungeneralized distress, whether they were underbenefited or overbenefited. However, later scholars specified that anger was more likely in the former case, whereas shame was more likely experienced in the latter.

Most of the early scholarship on equity and discrete everyday emotion was based on experiments, based on college student samples. Later survey-based studies of married and cohabitating adults, however, found that a broad range of emotions – including positive ones – are affected by perceptions of inequity within the context of long-term romantic relationships. Further, in the case of the household division of labor, men were more likely to experience anger and rage when faced with perceptions of under benefiting (that is, doing more than their fair share), whereas women were more susceptible to feelings of self-reproach and fear when confronted with perceptions of overbenefiting (that is, doing less than their fair share). These findings suggest that women may willingly do more than their fair share of the household division of labor in order to manage their own – and their male partners' – negative feelings. Needless to say, such endeavors – while the managing unpalatable emotions of both self and other – do little to ameliorate the conditions that arise to perceptions of inequity in the home that led to these emotions to begin with.

The justice framework also has grown to include the study of emotion (see Hegdvedt and Parris, 2014, for a complete review). Justice theorists generally consider two processes: procedural justice and distributive justice. The former focuses on the means by which outcomes are distributed, whereas the latter is more concerned with the actual allocation of outcomes, often taking into account such issues as need, equity, and equality. Generally speaking, people are happy when they feel like procedural decisions are just and the outcomes seem fair. They are less sanguine, however, when they believe the procedures to be unfair and the outcomes – as a result – fail to meet their expectations. Indeed, most people assume that fair procedures will lead to fair outcomes. However, even when individuals experience less than they expected, their negative feelings are somewhat alleviated, if they believe the procedure governing the decision is fair (Hegdvedt and Killian, 1999) or if the decision maker is legitimate (Clay-Warner, 2006).

Finally, exchange theorists, too, have been making advances in conceptualizing the role of emotions in exchange interactions. A framework for a number of more specific theories (e.g., the theory of social commitments (Lawler et al., 2009), relational cohesion theory (Lawler and Yoon, 1996), and the affect theory of social exchange (Lawler, 2001)), exchange theory, at its most basic, suggests that individuals who perceive equity in their social arrangements, who see these arrangements as inherently just, and who believe that their contributions are successful, are not only happier with their outcomes, but also experience more group cohesion and are more affectively committed to participate in ongoing exchanges. Conversely, individuals who feel that their costs outstrip their rewards, their contributions are not valued, or the exchange is not successful are likely to exit the exchange – whether within the context of a friendship, a marriage, or a job, or a small task-focused group – especially in light of better viable alternatives.

Taken together, these social psychological perspectives reveal that emotions are shaped by existing social and structural arrangements. They also illustrate emotions' ability to contribute to – and disrupt – the very conditions that gave rise to them initially. Equity theory, justice theory, and exchange theory all rely on the assumption that it is the perception of equity, fairness, or net gains over the course of a single – or ongoing – interaction that affect emotions, rather than the actual, obdurate conditions in which the individuals are actually embedded.

Comparison standards of fairness perceptions

The research on fairness began with studies of equity theory (Adams, 1965) and relative deprivation theory (Crosby, 1982). Both theories agree on the idea that fairness judgments are based on a comparison process, whereby the outcomes of the judge are contrasted with the outcomes received by a comparative referent (Martin & Murray, 1983). There is a variety in referent standards that are used in the comparison to produce the resulting judgment (Austin, 1977). The comparative referent may be external or internal. External or social comparison standards come from comparable others. Internal standards come from either one’s own past experience or mental simulations.

Information on social comparison can be used to construct fairness perceptions. Generally we evaluate how fair our situation is by appraising the situation of another who is similar to us in most relevant aspects (Austin, 1977). This comparison refers to comparisons made by a participant to others in the immediate situation, those who are in an ongoing relationship with the person. The person will initially compare their outcome/input ratio directly with a partner following an interaction with the partner or after they have mutually interacted with a common third party. In this manner, consumers compare their outcomes with those of other consumers, after they have individually interacted with a common firm.

It is vital for firms to manage this process because fairness perceptions are more susceptible to social-comparison-based information than satisfaction judgments (van den Bos, Lind, Vermunt, & Wilke, 1997). The extent to which one has access to information of the others in the immediate situation is the key. When information on multiple social comparison referents is available, people may separately compare their focal outcome with each piece of comparison standard, rather than integrating available comparison information to form one reference point (Ordonez, Connolly, & Coughlan, 2000). In contrast, people may compare their outcome with the most superior other or the most inferior other (Fehr & Schmidt, 1999). Depending on which one is selected, consumers may change their fairness perceptions.

Internal comparison standards play an important role. Individuals will be satisfied with rewards that equal or exceed their expectancies and dissatisfied with rewards below their expectancies. This concept has been utilised as the expectation disconfirmation model in the satisfaction literature in marketing (e.g. Oliver, 1993, 2000). Consumers form these expectancies based on past experiences, whether in general form or as specific exemplars (Messe & Watts, 1983). An additional source of information comes from the simulation heuristics (Kahneman & Tversky, 1982). If people can imagine or mentally simulate what they could get (a priori) or have got (post hoc), then this mental image can be used for comparison with the actual outcome. This simulated image may be an image of a generalised other or ‘mythical men’ (e.g. Berger, Fisek, Norman, & Wagner, 1983; Berger, Zelditch, Anderson, & Cohen, 1972; Taylor, Wood, & Lichtman, 1983; Wood, Taylor, & Lichtman, 1985).

Likewise, social comparison referents may not necessarily be authentic. They can easily be fabricated (Goethals, 1986), to serve whatever goal the comparer has in mind, through a process termed as constructive social comparison (Goethals, Messick, & Allison, 1991). Rather than dealing with actual comparison data, people produce self-generated social comparison information, in order simply to imagine or make up information about what others are like, how they might perform and what they might think (Goethals & Klein, 2000; Suls, 1986).

Which standards are used more prominently in constructing fairness perceptions? On the one hand, several studies support the possibility that internal comparison standards may be primary, and social comparison standards secondary. Messe and Watts (1983) found that social comparison had little (if any) moderating effect on the impact of internal standards on fairness judgments. Their studies showed that social comparison appeared to magnify fairness judgments when subjects were paid an amount that was substantially lower than their own internal standards; but when the pay was consistent with their own internal standard of equity, social comparison did not affect fairness judgment. Only when one experiences gains are the outcomes of other persons important determinants of fairness judgments; in the case of losses, the outcomes of others have little influence over fairness perceptions (de Dreu, Lualhati, & McCusker, 1994).

On the other hand, some argue that the social comparison standards may dominate internal standards in influencing fairness judgments. In both business and personal situations, people are more concerned with the comparison of their own outcomes with those of another party than with the value of their own outcomes (Loewenstein, Thompson, & Bazerman, 1989). Knowing others’ outcomes significantly influenced bargaining satisfaction (Corfman & Lehmann, 1993). Social comparison information may be perceived as more relevant and diagnostic than internal expectation information (van den Bos et al., 1997). With technological advances, it is becoming easier and easier to search for and observe a plethora of offers for other consumers. The availability of social comparison information in this manner will inevitably restrict the implementation of individual-level price discrimination or dynamic pricing because of fairness concerns (Bolton, Keh, & Alba, 2010).

Ultimately, whether social comparison information or internal expectation is used depends on the salience of the information in the particular situation (Austin et al., 1980). Salience may be determined by incorporating both accessibility and diagnosticity (Feldman & Lynch, 1988). If one piece of information is immediately accessible and perceived to be diagnostic, then this information will be more likely to be used – whether it is internal or external – to form a frame of reference with which to evaluate the fairness of a situation.

In East Asian countries, the degree of open sharing of the information may be larger within tighter in-groups, compared to the out-groups. It may depend on cultural characteristics in these countries related to Hofstede’s individualistic-collectivistic tendencies and power distance measures. Because of the concerns about ‘face’, Chinese consumers are known to be more sensitive to in-group versus out-group differences than American consumers (Bolton et al., 2010). This is where in-group versus out-group memberships may play a role, especially in Asian countries with strong membership ties from various life-stage organisations (e.g. hometowns, schools, clubs, companies). Comparison within the relevant reference groups (in-groups) becomes more important and significant in determining fairness perceptions in East Asian countries with high collectivistic tendencies. Central to this process is managing the information available for consumers to actively use as the comparison standards for their fairness judgments. What information from which groups is readily available? Does the cultural norm dictate that participants should focus on their own efforts or to seek equal treatment among all? Information availability on social comparison standards or tendency regarding the usage of internal comparison standards both influence salience of each comparison standard. Managing such salience of particular comparison standards, if at all possible, is a goal to pursue for marketers in East Asian countries.

Victor Vroom and expectancy theory

Victor Vroom is well known for his expectancy theory of motivation. It is similar to equity theory in that it posits that one weighs certain factors relative to motivation. According to Vroom ([1964] 1995: 7), motivation may be defined in a variety of ways, but his definition is ‘to refer to a process governing choices made by persons or lower organisms among alternative forms of voluntary activity’. Vroom’s theory differs from others to some extent, in that it focuses on the here and now as opposed to past behavior. According to Vroom, his approach forces one to ‘assume that the choices made by a person among alternative courses of action are lawfully related to psychological events occurring contemporaneously with the behavior’ (ibid.: 17).

The concept of valence is central to Vroom’s theory. Essentially, whenever people act, they do so to affect one among two or a series of possible outcomes. Valence is thus ‘affective orientations toward particular outcomes’ (ibid.: 18). It should be noted that much like equity theory, which focuses on perceived inequity, the focus is on one’s perception of the outcomes. That is, an outcome may or may not be a satisfier to the degree expected once achieved, but the theory considers only the expected satisfaction to be achieved. In all decisions there is an element of risk. According to Vroom, people essentially weigh their desire to achieve a given outcome against the risk associated with it. He believes that all of these factors can be measured with some degree of accuracy.

Vroom validated his theory in a variety of ways. One way was to ask individuals to report verbally on the elements mentioned above. Another was to analyze fantasies or stories told by individuals. A third was to examine whether or not a given outcome spurred desire in the direction of further learning. A fourth way was to examine alternative choices that an individual could have made against the one actually made. Lastly, one could observe another’s actions to see which choices are made. All of these methods allow us to examine motivations relative to Vroom’s theory.

While this concept may seem fairly complicated on the surface, it could be applied by library managers with considerable effectiveness. By understanding someone’s choices as they are made, their tolerance for risk, etc., one can better guide and coach a given employee. Certainly, individuals will differ considerably in the choices they make and their level of tolerance for risk.

Vroom’s book Work and Motivation, through its detailed exploration of scores of specific studies, provides much wisdom beyond just the basic outlines of his theory. According to Vroom (ibid.: 46), ‘many work roles provide their occupants with an opportunity to contribute to the happiness and well-being of their fellow man’. I can think of no better way to describe how many of us, at least to some degree, view library work. Our respective missions provide us with a great deal of satisfaction and, as he posits, may create a situation in which expenditure of energy as opposed to avoidance of it is deeply satisfying. Likewise, he suggests that some professions are more of a first choice than others. In this respect, one would think that librarians are somewhat unusual in that most, while they may be able to point to positive early experiences in a library, come to the profession later in life. By definition, a librarian is typically not viewed as a professional without a graduate degree in library and information studies. This has significant ramifications for how to motivate professional library staff. He also notes studies which indicate that social workers and teachers are much higher in intrinsic and lower in extrinsic orientation towards rewards. This too may apply to librarians to an equal degree.

Common to all workers, Vroom identifies the most critical satisfiers, which may in turn serve as motivators: ‘intrinsic job satisfaction, company involvement, financial and job status satisfaction, and pride in group performance’ (ibid.: 118). Some other common elements among workers have been identified by Vroom as well. For example, people commonly list co-workers most often and a supervisor second most often when asked about satisfiers. Likewise, a different ranked list of job factors was reported: ‘security, followed by opportunity for advancement, company and management, wages, intrinsic aspects of jobs, supervision, social aspects of jobs, communication, working conditions, and benefits…’ (ibid.: 123). It should be noted, however, that many of these satisfiers may not directly relate to performance. Certainly, motivation-hygiene theory has already sounded this warning. Vroom (ibid.: 218) states ‘There is no simple relationship between job satisfaction and job performance.’ While part of this may be due to the challenge in objectively measuring job performance, it also serves as a warning beyond meeting serious hygiene concerns. That is, just satisfying people or making them happy is not necessarily the best way for a library manager to motivate staff to be productive. Likewise, while some have suggested that certain styles of management are more conducive to motivation, indiscriminate support or rewarding of staff without connection to performance is counterproductive. ‘To be of maximal value to motivating subordinates to perform effectively, consideration or supportiveness must be a response to effort and accomplishment rather than indiscriminate supervisory style’ (ibid.: 253). In a separate work, Vroom gets more specific on management styles and notes, for example, that ‘managers must have the capabilities of being both participative and autocratic and of knowing when to employ each’ (Vroom and Jago, 1988: 42).

Theories of Default

Previous literature has explored two theories of default and foreclosure: the ability-to-pay theory and the home-equity theory. The ability-to-pay theory suggests that default occurs when a borrower cannot make the monthly payments on the loan (Clauretie and Sirmans, 2003). This is perhaps due to certain trigger events in his/her life – such as loss of employment or health issues – that have caused resources to become strained, consequently leading the borrower to default (Elmer and Seelig, 1998). Clauretie and Sirmans (2003) stated that research conducted to explain or predict default under this theory has focussed on borrower characteristics such as family size, source of income, number of dependents, trigger events, and so on. There is also a major issue at present in that mortgage brokers and lenders encouraged many subprime borrowers to take out fixed or adjustable rate mortgages (ARMs) which they had little or no prospect of repaying when the mortgage rate went up. Default is thus almost inevitable.

Contrary to the ability-to-pay theory, the equity theory examines only the amount of equity in the property. This theory asserts that no borrower with substantial positive equity would default (Clauretie and Sirmans, 2003). Borrowers will have a motivation to do a short sale to capture some of the equity. On the other hand, if there is negative equity or the value of the property is less than the amount of the loan, default may occur, even if the borrower is able to make the monthly payment. To predict default under this theory, home equity, or the related measure loan-to-value ratio, is scrutinised. Studies of default and foreclosure have included factors that are expected to be related to both the equity theory and the ability-to-pay theory. Arguably, neither theory deals adequately with the causes of mass foreclosure caused by the growth of reckless lending practices.

4.3.1 Situational determinants of how people defend BJW

In Hafer and Gosse (2010), we discuss a number of potential situational determinants of how people defend BJW in the face of threat. Drawing from equity theory (Adams, 1965; Walster et al., 1976), cognitive dissonance theory (Festinger, 1957), and the motivated social cognition literature (Kruglanski, 1996), we organize these variables according to a number of general principles that guide how people pursue their desired ends.

First, strategies that are less effortful or more available will be pursued more than those that are more effortful or less available. Therefore, Hafer and Gosse (2010) suggest that some situational characteristics likely influence the degree to which specific BJW-defense strategies are pursued by affecting perceived effortfulness or availability of strategies. For example, situations can contain cues that a victim is to blame for his or her situation (e.g., Haynes & Olson, 2006). In such a case, blaming the victim requires only moderate cognitive effort and therefore might be employed to a greater extent than other, more effortful ways of maintaining BJW. Additionally, according to justice motive theory, if helping a victim of injustice is unavailable as a means of preserving BJW, then people are more likely to engage in cognitive distortions (Lerner & Miller, 1978).

Second, Hafer and Gosse (2010) suggest that some situational variables affect the degree to which different BJW-defense strategies are employed because these variables influence the perceived effectiveness of the coping mechanisms. For example, people might be more willing to help an innocent victim who represents an isolated case rather than one of many such cases, perhaps because help in the latter situation is viewed as less effective at alleviating injustice (Miller, 1977; see also Kogut, 2011). Similarly, people might be more likely to help if aid is not so personally costly as to make them victims of injustice in the process (see Holmes, Miller, & Lerner, 2002).

Third, people are likely to prefer to attain their desired ends in ways that satisfy multiple motives. According to Hafer and Gosse (2010), therefore, a number of situational variables likely influence the degree to which people pursue particular modes of BJW-defense because these variables determine the extent to which other motives (aside from preserving BJW) are also met. For example, a person who is the perpetrator versus a third-party observer of an injustice might want to maintain BJW while avoiding feelings of guilt or social censure (see Chaikin & Darley, 1973). Derogating the victim of injustice could serve both motives better than some other strategies, such as compensating the victim.

Testing the kinds of situational determinants described in this section requires careful experimental design. Ideally, experiments would include at least the following three elements to test situational predictors of different ways of defending BJW: a manipulation of BJW-threat, measures to test at least two modes of BJW-defense, and a manipulation of a situational variable proposed to determine the degree to which strategy each will be pursued. With these components, one could test, for instance, whether use of one strategy is greater for level 1 of the situational determinant than for level 2, and use of another strategy is greater for level 2 of the situational determinant. To be clear evidence of BJW-defense, this pattern should occur only when threat to BJW is high, not when threat is low. Alternatively, one could test whether one strategy is used more in the high versus low threat condition at level 1 of the situational determinant, whereas another strategy is used more in the high versus low threat condition at level 2 of the situational determinant.

Most studies are unable to test such relations because they do not include all three elements noted in the previous paragraph, although there are a few exceptions (e.g., Kay, Jost, & Young, 2005, Study 1; Warner et al., 2012, Study 4). In one exception, Warner et al. (2012, Study 4) found that the temporal distance of victimization determined the degree to which people endorsed different BJW-defense strategies. When BJW-threat was high, participants who were told the victimization took place in the recent past blamed the victim’s behavior more than did participants told the victimization was in the distant past. To the contrary, participants who were told the victimization took place in the distant past blamed the character of the victim more and saw greater benefits in her suffering than did participants who thought the victimization was in the recent past. The authors interpreted their findings in terms of construal level theory (Trope & Liberman, 2010), in that psychologically distant events prompt global judgments (as in character attributions or estimations of benefits), whereas psychologically close events prompt context-specific judgments (like blaming specific behaviors preceding a victimization event). In terms of Hafer and Gosse’s (2010) organization of BJW-defense strategies, Warner et al.’s (2012) temporal distance variable probably influenced endorsement of different strategies through the availability principle. That is, temporal distance might have affected the availability of BJW-defense strategies that required different modes of thinking.

To summarize, many situational variables determine how people defend BJW when confronted with a threatening injustice. These variables likely have their influence through general principles affecting preferences for alternative ways to manage threat. Of course, how people engage in BJW-defense is determined not only by situational characteristics, but also by characteristics of the person. In the following section, we discuss our own research on this topic.

3.2 Cross-Cultural Differences in How Employees Are Motivated at Work: Process Theories

Process theories deal with the ways in which employees are motivated at work. There are four major process theories of motivation: goal-setting theory, job enrichment theory, equity theory, and expectancy theory. Among the four, goal-setting theory of Locke and Latham has received the most attention from cross-cultural researchers. The theory asserts that the existence of goals is motivating and that goals with particular characteristics (e.g., challenging, specific, accepted) are more motivating than others. Participation and joint decision making are considered to be a key factor in motivation. Participation enhances motivation in that it provides greater autonomy and control over work outcomes and reduces anxiety and uncertainties. The Industrial Democracy in Europe (IDE) International Research Group compared the participative decision-making practices in 12 European countries in 1981 and repeated the study 10 years later in 10 of the original 12 countries as well as in Japan and Poland. This was a major undertaking to show that participation had different meanings and practices across cultures. These studies show that in the most collectivist cultural contexts, group participation is more motivating and effective in improving work outcomes than is individual participation. Individual and face-to-face involvement in decision making (i.e., the North American model) is, in fact, not desired in all cultural contexts. In cultures that Hofstede identified as high in power distance and uncertainty avoidance, participation may even result in demotivation because subordinates seek guidance from their superiors to reduce uncertainties. Research suggests that for participative goal setting to be motivating in developing countries, organizations should enhance employees’ self-efficacy beliefs through empowerment, coaching, and mentoring.

The job enrichment theory of Hackman and Oldham suggests that workers are motivated to the extent that they experience meaningfulness in their jobs. This can be achieved through more autonomy and discretion in one’s job, feedback on performance, opportunity to use multiple skills (i.e., skill variety), identification of the contribution of one’s job to the overall work context (i.e., task identity), and knowledge of the significant contribution of one’s job to others’ lives (i.e., task significance). Jobs that are designed to have high autonomy, feedback, skill variety, task identity, and task significance are referred to as “enriched jobs.” This theory is based on individualist assumptions of employees’ desire for independence, freedom, and challenge. Thus, it is argued that job enrichment might not be as effective in countries with power hierarchies and avoidance of uncertainties. Increasing discretion and responsibility elevate anxiety and uncertainty, and worker autonomy defies the role of the authority. In more collectivist European countries, job design takes the form of “autonomous work groups” in which job enrichment principles are implemented at the group level (e.g., team autonomy, team-based feedback). However, this system is reported to have limitations in developing countries due to uncertainty avoidance and resource scarcity that is endemic to the majority of developing countries.

The equity theory of Adams purports that employee motivation is achieved by invoking the perception of fairness. One way in which to increase fairness is to establish an equitable relationship between “inputs” and “outputs” among workers. Inputs represent everything that employees perceive as their contribution to the job (e.g., training, skills, time, effort, loyalty, commitment to the organization), whereas outputs represent everything that employees perceive as received in return for their contribution (e.g., pay, promotion, praise, recognition and awards). Equity theory has not attracted much cross-cultural research attention, but the available evidence suggests that what constitutes inputs and outputs varies across cultures. In collectivist cultures, loyalty, commitment, seniority, and tenure are more important inputs for promotion and rewards than is job performance. Also, in cultures where there are status hierarchies, the social class or caste to which one belongs is considered an input. Similarly, there are cultural variations in the perception of outcomes. Challenge and autonomy in the job and salary increases are considered to be valued outcomes in individualist cultures, whereas praise from supervisors can be an important outcome in collectivist cultures. There are ways in which to restore equity such as changing inputs (e.g., working less), changing the comparison group, changing the outcomes (e.g., asking for a salary increase), and leaving the organization. There is not enough research to indicate cross-cultural variations in the ways in which to restore equity. However, there is a large body of cross-cultural research in the area of organizational justice. Reward allocation based on an equity principle is not endorsed in all cultural contexts.

The final process theory of motivation is the expectancy theory of Vroom. According to the theory, employees are motivated to the extent that their expectations are met in the following ways. First, if they exert enough effort, their job performance will be at the desired level. Second, if they perform at the desired level, it will lead to some outcomes. Third, the outcomes will have high valence or attractiveness. Although there is no systematic research testing the validity of the theory across cultures, it seems to have more applicability in individualist cultures than in collectivist ones. In individualist cultures, employees are motivated if there is a high likelihood of meeting their own expectations, whereas in collectivist cultures, motivation is related to the probability of meeting the expectations of “significant others” (e.g., family, organization, superiors). “Face saving” is also an important motivator in collectivist cultures. Another cross-cultural variation may exist in people’s beliefs in the controllability of events. In fatalistic cultures, employees do not believe that control of events is in their hands; that is, they have an “external locus of control.” Thus, expectancy theory might not be useful in such cultural contexts.

3.2 Equity Theory

Expectancy theory is focused upon the individual human being, engaged in means-to-end relationships. Is that individual affected by one or more others, by smaller or larger social networks in the choice-making process? Yes, according to Ajzen and Fishbein's theory of reasoned action (1980), in which the individual's beliefs about what others think he or she should do are supposed to affect the choices he or she make. Equity theory (Adams 1963, 1965) includes ‘social others’ indirectly in the balance between contributions and inducements. Adams holds that an individual strives for such a balance relative to the balance that individual perceives between contributions and inducements as applying to a referent. A referent may be one or more human beings, a particular group, an organization's policy, and that individual at an earlier or later stage of their career. Contributions relate to long-term investments and short-term costs, such as education, abilities, and effort. Among inducements are task performance, recognition, and compensation. Equity is achieved when the person's perceived contributions–inducements ratio is equal to their perception of the referent's ratio. An unequal balance results in dissonance and inequity.

A typical setting would be an experiment in which the ratio between a person's effort (to perform a task) and pay is compared with the effort–pay ratio as perceived to apply to the referent. A high level of inequity would be the result when the person perceives their own situation in terms of high effort for low pay, and the referent's ratio as low effort for high pay. Obviously, the person would then be motivated to restore an equitable balance. But how? That is difficult to predict. Available strategies are: effecting change in contributions and/or inducements; changing the referent; cognitively reinterpreting the inequitable situation; or leaving the organization. Harder (1992) showed in a study of baseball and basketball players that under-rewarded players tended to opt for utilitarian, egotistic behaviors that were thought to lead to future higher rewards.