International Human Resource Management (American Food & Beverage Company): How does equity theory apply to the motivation of this company's managers and workers?

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CASE OB 2
Individual case study-please type your answers in a word file
Name: ID:....
Mark : /........ points /5.

Question 1 : How does equity theory apply to the motivation of this company's managers and workers ? /8

WORKERS
Examination of the workers´s perception of their INTERNAL equity: /2

The single most important thing to remember about equity theory is that if rewards are to motivate employees, they must be perceived as being equitable and fair. In this case the workers have felt that they were under rewarded because their working conditions were harsher than those of other workers, with the heat, humidity and constant noise. In addition, they had to get used to the complex American methods.

Examination of the workers´s perception of their EXTERNAL equity: /2

The worker felt that they were under rewarded because of the appalling work habits of the managers, who lazed around, took long tea breaks in their air-conditioned offices and took days off for personal reasons, while they earned higher salaries than those of the employees. Please remember that according to the equity theory three attitudes are possible: an individual may feel equitably rewarded, underrewarded, or overrewarded. When individuals feel underrewarded or overrewarded, they will do something to reduce the inequity.

MANAGERS
Examination of the managers´ perception of their internal equity:

/ 2

The fact that managers and directors showed little respect for schedules and took long tea breaks and lazed around shows that the managers perceive the company to be unfair and inequitable towards them. This perception seems to be reinforced by the view of the marketing department that this slackness was allowed to compensate for long hours of work and for a very busy previous quarter. In short there seems to be a perception among managers that they are under rewarded.
Consider the following example,
Mr. Thao Chang had previously headed a textile company and here as a marketing director he felt under rewarded. There is a strong possibility that he thinks that the company is not being equitable and fair to him.

Examination of the managers ´ perception of their external equity: /2

The examination of the mangers' perception of their external equity cannot be done directly but through the observations of Paul and his behaviour. That Paul was afraid that the managers could be snatched up by competitors by offering higher salaries indicates that Paul felt that the subsidiary was not being fair and equitable to the managers. Secondly, the perception of Paul that the "employees loyalty" was in doubt indicates that the managers were under rewarded. Third, Paul's proposal that the managers' salaries be increased strongly indicates that the subsidiary is that the managers' perception of their external equity is not positive.

Question 2: How does EXPECTANCY THEORY apply to the case of this company's managers: Examine and comment on the following elements of the expectancy theory
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