- Equity Theory Equity theory focuses on people’s perceptions of the fairness of their work inputs relative to their work outputs. The best inputs and outputs setting is equity. Equity exists when employees with same input level are treated equally with same output level. Otherwise, overpayment and underpayment both could lead people to lower their inputs on their jobs. From both sides, input and output, company can create two talent management tools. In output side, manager needs to have a completed and accurate compensation plan. A modern compansation plan has cash, bonus, stock options, long-term benefit plan etc. Why the company needs those complicated pay structure is because they want to maintain fair pay related to employee’s performance. If the company only has fixed cash salary, the employees only want to contribute the efforts equaling to fixed salary and restore their inputs to next work term. But bonus, stock option and other kind of benefit could overcome it, because they are measured with employees’ inputs level and then maximize the effect of motivation. In an ad company, a good compensation plan can motivate people contribute their talent in their works directly. Higher performances, higher bonuses. People feel that there is a fair balance between inputs and outputs. Under output, there are some elements hard to be measured by money amount, such as interest and enjoyment. Therefore, besides compensation, company needs to provide other benefits in organization culture or environment. To improve work environment, the company could search outside technology solution such as ERP human capital management. Besides payroll and other administration methods, employee could feel they can obtain other kinds of benefit thought the improvement of work environment. The new technology brings a new concept of “self-service” to employees. have a video of one biggest ERP service firm, SAP, it interview one of its client, Allied Irish Banks and show the idea how a good information system could benefit the employee and the company. http://www.sap.com/solutions/business-suite/erp/hcm/customersuccess/AIB.epx As we know, after the baby boom, the HR market is getting into the shortage of talent. Then, when the basic compensation structure is getting complicated, now companies are searching new benefit to retain their talent. Not only to keep current top asset in the company, with a good output system, the company also could attract more talent people join the team.
On the other side, inputs, or we say, performance measurement is also the key. Some of the input elements can be measured by number, but some of them, such as personal sacrifice and loyalty may need professional judgment. The company needs to build a good performance evaluation system. For example, in a talent based ad company, managers might use the quality of advertise as the benchmark, because the most important goal for an ad company is to satisfy their client with good advertise.
- Learning Theory Learning theory focuses on increasing employee motivation and performance by linking the outcomes that employees receive to the performance of desired behaviors and the attainment of goals. Learning Theory can be separate into two theories, operant conditioning theory and social learning theory. An advertising company requires creative people. These people are the top assets in a successful advertising company. The disadvantage of these people is that they are hard to be managed under company’s rule and standard, which is the reason why companies like to hire people with similar characters to the company’s culture. Learning theory indicate the importance of desired and correct behaviors and beliefs. Managers could use some training lessons to teach people how to perform under the company’s behalf. Also from social learning theory, we learned that it is necessary to build a nice organizational culture, because motivation is not only from direct rewards and punishments, but also from a person’s thoughts and beliefs. - Goal Setting Theory Goal-setting theory focuses on identifying the types of goals that are most effective in producing high levels of motivation and performance and explaining why goals have these effects. difficult goals are necessary. Difficult goals can motivate people to put more inputs into jobs in the right direction. Then, Difficult goal setting not only can make people work in the same direction, also it can motivate people to put more efforts into their jobs. With a higher goal, people may be more serious to their works. Also a difficult goal can lower the risk that the result fails to reach the actual quality level. Goal-setting theory is really important for an advertising company, because of the nature of this industry. In advertising works, people need to have a clear goal in mind in order to use their creativities to best promote certain products. Without a goal, people can not perform efficient works, although they might have talent. For example, before first apple computer appears, people in Apple were working really hard; even many of them were willing to have overtime works. The reason is that people in Apple held a clear goal in mind and they want to change the old image of family used computers. Therefore, Goal-setting is the key in an organization’s performance.
Now I will pass to XX and we will talk about organizational culture in details.