Reference no: EM131557777

"Restoring Equity" through the example of the Senior VP at a Fortune 100 Company.  Was the VP's reaction justified? Minimum 250words

Suppose that you were hired by company X last year with an annual salary of $85,000. You felt happy about your salary until you learned that your colleague at the same company, whom you regard to be of equivalent skill and background, is paid $5,000 more per year. How do you deal with this inequity? When people find themselves in an inequitable relationship, they become distressed; the greater the perceived inequity, the more distressed people feel. Distress drives people to attempt to restore equity.

People who believe they are underpaid feel dissatisfied and seek to restore equity. For example, underpaid workers lower their level of effort and productivity to restore equity, and in some cases they leave organizations characterized by inequity to join an organization in which wages are more fairly distributed, even if they are less highly paid in absolute terms. Consider what happened when two vice presidents of a major Fortune 100 company were promoted to senior vice president at about the same time. Both of them moved into new offices, but one of them suspected an inequity. He pulled out blueprints and measured the square footage of each office. His suspicions were confirmed when it turned out the other guy's office was bigger than his by a few feet. A former employee said, "He blew a gasket." Walls were moved, and his office was reconfigured to make it as large as his counterpart's

People use the following six means to eliminate the tension arising from inequity:

1. Alter the inputs. The senior VP could work less hard, take on fewer projects, take more days off, etc.

2. Alter the outcomes. The senior VP could make his office bigger-which he did.

3. Cognitively distort inputs or outcomes. The senior VP could minimize the importance of his contributions and maximize the perceived value of his office-for example, by deciding that his office was quieter than that of his counterpart.

4. Leave the situation. The senior VP could quit his job.

5. Cognitively distort either the inputs or the outcomes of an exchange partner. The senior VP may view the other VP as contributing more, or perhaps regard the big office to be less attractive than it actually is.

6. Change the object of comparison. The senior VP may stop comparing himself to the other senior VP and start comparing himself to someone else in the company.