General Motors, Ford and Daimler Chrysler are closing numerous factories and laying off thousands of employees

You are the new dean of the college of business administration at a major university. One of the first tasks you have undertaken is a review of the salaries of your non-tenured faculty members. You note that the OB instructor has similar credentials to the marketing instructor, but is paid $5,000 less per year for similar teaching duties. You are also aware that faculty members recently found out salaries of all instructors when the payroll office erroneously sent an email with that information. Knowing equity theory, what reactions to the inequity might you expect, and how would you address them?

Equity theory suggests that two ratios are assessed by an individual: first, a self-assessment ratio comparing one’s input to outcomes. If the outcome is favorable given the input invested, an individual feels equity. That self-assessed ratio is then compared against a similar ratio “mentally” prepared on a referent. Again the comparison leads to feelings of equity or inequity. In this scenario, a comparison of the OB instructor to that of the marketing instructor, all things being equal, is going to make the OB instructor feel inequitably treated by the college.

Knowing the inequity felt by the OB instructor, the dean could pursue a number of different options to address feelings of unfairness in the university system. For example, the dean might attempt to help the OB instructor alter his perception of his own or the referent’s inputs and outcomes. Specifically, the dean could help the OB instructor see that he really did not work as hard on his classes, nor teach them as successfully as he thinks he did (perhaps by providing student evaluation of such). Other options to address the inequity felt include: having the referent increase his inputs, having the OB instructor reduce his inputs or attempt to increase outcomes, change the comparison person (perhaps by comparing himself to another OB instructor) and having the OB instructor leave the university.

149. General Motors, Ford and Daimler Chrysler are closing numerous factories and laying off thousands of employees. Based on the research on procedural justice, what recommendations could you make to the firms to be fair with those individuals?

Again, answers will vary. Some options the auto companies might utilize include providing the laid-off employees with advance notice of the job action, thus providing them an opportunity to prepare themselves for the major life impact. Other options include: allowing employees a voice in decision making, providing full explanations for the need for such job action, and treating all employees in a consistent manner (having a set procedure for determining who will be laid off and not deviating from the plan).

150. Using expectancy theory, describe the thought process a pharmaceutical salesman might go through if his firm has developed a new drug and provides him the option of staying with his previous products or adding the new product to his account.

Expectancy theory suggests that three factors should be examined. First is the notion of expectancy itself. Will my effort lead to high performance? In this case, does the salesman believe he can sell the new drug? Will his current selling techniques allow him to maintain his high performance level?

The second issue to be considered is instrumentality. Instrumentality is the degree to which the person believes performance is related to rewards. Will the sale of this drug produce good commissions?

Finally, the notion of valence must be assessed. Is the size of the commissions sufficient to facilitate such effort? When these issues are considered in concert with one another, the motivation to pursue the action is determined. The role of the manager of this pharmaceutical sales person is to try to influence all these perceptions.

151. You have been hired to replace a very unpopular manager of a marketing department. Department members were especially vocal about how unfair the previous manager was in conducting performance appraisals and allocating merit bonuses. What ideas do you have about being a fair person?

Being fair involves looking at a few key issues:

The prior manager may not have done so, but when distributing rewards, you must make sure you are paying attention to the different contribution levels of your employees. Not all employees contribute equally and to reward them all equally is to be unfair to those with greater participation.

That said, there are occasions when the nature of people’s contributions should be ignored and the rewards distributed equally. For example, when holding a luncheon to celebrate the attainment of a production goal, all employees should be invited, not just those most directly responsible for the production of the actual product.

You must also pay attention to how you actually make decisions. Though you are accountable for your decisions, you should not always make those decisions unilaterally. Talk to your employees and get some perspective by those who will be affected by the decisions.

Pay attention to how you talk to people. Use the old adage: Treat people as you yourself would like to be treated.

Justice is also in the eye of the beholder. Even though you may feel that you are being fair, everyone has different perceptions. Recognize that and accept it.

Finally, people care about how they are treated, but they also care about how others are treated.

With these thoughts in mind, you will have a head start on addressing the issues created by your predecessor.

152. Many firms are instituting wellness programs for their employees as a means to improve those employees’ health and well-being and lower healthcare premiums. Use the stages of organizational behavior modification to explain how to modify employee health in the workplace.

Stage 1: Identify the behavior to be modified. Overweight individuals, particularly those who are established as being clinically obese, represent real medical concerns both now and in the future. Identifying those individuals whose BMI (body mass index) suggest they are candidates for medical problems down the road is an important first step.

Stage 2: Measure the baseline level. A firm can decide to institute a wellness program whereby they publicize the opportunity to privately find out your BMI. Many firms institute a team competition to get department members to be measured. The department with the most individuals measured, for example, may get $5 gift cards to a local eatery.

Stage 3: Analyze its antecedents and outcomes: Once the BMI is assessed and the potential level of obesity in the firm determined, the firm can begin to determine the potential causes of the weight problem among its employees. Often the problem is a lack of exercise.

Stage 4: Intervene. If lack of activity is one contributing problem for the firm’s employees, a program addressing the issue can be created. Many firms are taking part in a walking program called “America on the Move.” The program distributes pedometers to all participants, and baseline numbers of steps in a daily routine are determined. Once that baseline is assessed, the firm attempts to encourage its employees to increase the number of steps daily. One goal might be to take 2,000 extra steps each day.

Stage 5: Evaluate and maintain. Teams are formed in departments of the firm to compete against one another as each individual and group attempts to reach the 2,000 steps per day goal. After a set time period, progress toward the goal is assessed and those teams and individuals achieving the goal are rewarded for their efforts. At one university instituting this program, goal achievers have their monthly insurance premiums reduced by an established formula for every month that goal is achieved. Clearly the overall effect is that employees become healthier and overall company healthcare premiums are reduced.