Issues

Issues

The primary issue at hand is Mike’s dissatisfaction with rewards he has received. Mike believes that the level of effort and commitment he has displayed should have resulted in greater returns, in the form of improved status at his organisation and more significant wage increases. His dissatisfaction with the rewards he has received arises from two main concepts relating to the motivational power of rewards.

The first is expectancy theory, which states that people will be motivated to make a greater effort if they believe that (a) their efforts will result in improved performance and (b) improved performance will allow them to obtain desired outcomes (Cordery and Burr, 2006). In this case, Mike believed that his efforts (e.g. working longer hours, sacrificing his private life) would allow him to maximise his performance and thereby obtain desirable outcomes such as recognition, increased wages and promotion within the company. Although Mike’s efforts did result in improved performance, his expectations about the rewards he would receive were not met. As a result, the expectancy has been broken and Mike’s motivation has been shaken.

The second issue is the concept of organisational justice, or equity theory, which proposes that individuals decide whether they are being fairly rewarded by comparing themselves to others (Huseman, Hatfield and Miles, 1987). If they perceive that the ratio between the contribution they make (assessed by effort, experience and qualifications) and the rewards they receive is equal throughout the organisation, they will be satisfied that equity exists. For example, if two workers making the same contribution receive equal rewards and a third worker contributing twice as much receives double their pay, all workers are being rewarded in the same ratio and so the situation is perceived as equitable. In Mike’s case, he is earning less than