Calculative Theories

These theories assume that incentive is the outcome of a calculated procedure that people go through when obtainable with circumstances. In evenhandedness theory, people analyze their inputs and outputs and measure up to them to others' inputs and outputs. For example, if I think I am functioning harder  than my assistant, yet I'm being paid the same, I may well condense my inputs (effort) until I think we are "equitable." This has implication for organizations using fixed pay scales for jobs-how do you support people to perform improved? Many companies take action with incentive schemes, or performance-related pay, but these have their own problems, as we'll see when we look at recompense systems in the section on company-level rudiments.

Equity theory can habitually clarify why some people who used to be "high-flyers" hurtle-there comes a point when they understand that although they are working harder and smarter, their returns are the same as those of other people who are just passing the time at the office, so why bother?

Expectancy theory is an additional calculative way of looking at incentive. The second equation you need to know is:

F = E * I * V

F (the force of inspiration) is equal to Expectancy (the conviction that exerting the effort will lead to presentation) times Instrumentality (the belief that the presentation will lead to an out- come) times Valence (the value given to the outcome). The significance of anticipation theory is that it shows that there are numerous places where incentive can break down:

1. Does my effort lead to performance? I might be working flat out, but the apparatus I'm using is just not good enough to do the job.

2. Does the presentation in point of fact lead to a preferred outcome? I could be the best service technician you have ever had in the company, but however well I do my job, the customer's com- plain that it takes too long to repair a machine because we don't have adequate technicians to cover the territory, so I never get a good presentation report-I end up demotivated.

3. How significant is the outcome to me? I might be the theater well-and it might actually be probable for me to win the end-of-year sales bonus-but the amount is so diminutive relative to my remuneration-and my peers will taunt me for winning- so it just isn't value the effort.

At each period there could be individual or managerial reason for the breakdown in enthusiasm. One lesson from anticipation theory is that it is as imperative (and often easier) to remove the de motivators as to recover the motivators. You can pay a person as much as you like, but if any one of the three steps breaks down, you will not get any more inspiration for your money.