Page 268 - Introduction to Business

242 PART 2 Managing Business Behavior

they are not being fairly treated, they may take appropriate action. First, they may
change their work habits by decreasing input, for example, reducing the hours of
work or spending more time surfing the Internet instead of working, or by increasing
their output but redirecting it, for example, trying to make additional money by doing
other jobs on company time or to use corporate resources for personal purposes. Sec-
ond, some employees may try to rationalize their inequitable outcomes-to-inputs
ratio to their job itself: “My job carries more prestige than the other person’s.” This
way the employees increase the outcomes stream in the outcomes-to-inputs ratio.
Finally, some employees may depart from the situation they are in, that is, quit.
Because equity theory is very down to earth, employers can impact employee
motivation by taking simple steps to make sure that all employees are treated fairly.
Very rarely do you find two employees with identical backgrounds in terms of edu-
cation, professional skills, attitude toward work, and so on. Yet, every effort should
be made by firms to treat employees fairly, otherwise there will be a negative impact
on employee morale, productivity, and corporate performance—not to speak of the
class action law suits that will follow. For example, on July 12, 2004, Morgan Stanley—
a Wall Street investment bank—agreed to settle with the U.S. Equal Opportunity
Commission (EEOC) and pay $54 million to end a sex bias trial. The EEOC alleged
that women at Morgan Stanley were systematically denied equal compensation
and promotion given to men. The equal opportunity employment policy that is
largely followed in the United States is based on the equity theory philosophy.

Reinforcement Theory
reinforcement theory The theory that is Reinforcement theory is based on the principle that rewarding desired behavior
based on the principle that rewarding will lead to continued good performance, while penalizing unacceptable behavior
good behavior will lead to continued
good performance, while penalizing will lead to reduced misconduct. As a child you may have participated in the prac-
unacceptable behavior will lead to tice of reinforcement theory without knowing it. When children behave well at
reducing unacceptable conduct home, parents often reward them with a pat on the back and with such remarks as
“good boy” or “good girl,” and if they are lucky, the children may even receive a
treat! However, if the children throw tantrums, which are unacceptable behaviors,
even after an initial warning, they may end up in a “time-out” session. In the busi-
ness world, managers try to reinforce employees’ good behavior—working hard,
meeting set goals, being punctual, being neat and tidy—by offering rewards—
pay increases, promotion, awards. This type of employee reinforcement is called
positive reinforcement Giving of positive reinforcement. Managers also try to reduce unacceptable behavior—
rewards by managers to try to tardiness, sloppiness, chitchatting, web browsing at work—by reprimanding—
strengthen employees’ good behavior
sidelining, demoting, reducing pay, increasing workload, laying off—the employee.
negative reinforcement Reprimanding This type of reinforcement is called negative reinforcement, which managers try to
of an employee by a manager to reduce avoid as much as possible because of employee resentment and its unpleasant
unacceptable behavior
impact on office morale and productivity. Whether it works positively or negatively,
reinforcer Any consequence that a reinforcer is any consequence that strengthens specific behavior.
strengthens a specific behavior Managers can use positive and negative reinforcers in a number of ways to
achieve desired corporate objectives. The effectiveness of reinforcers on employee
motivation and performance depends on what types are used, when they are used,
and in what culture they are used. Employees generally prefer to have reinforcers
spelled out clearly so that the rules of the game are transparent. New employees
generally require positive reinforcers early in their career so that they develop a
positive attitude to management and the firm. As the years pass, employees know
what is expected of them. In general, positive reinforcers are the preferred
approach to employee motivation, with negative reinforcement being used as spar-
ingly as possible or even being coupled with some rewards.

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