Nobody downloaded yet

Equity, or perceived fairness, of compensation from the perspective of the employee - Essay Example

Comments (0) Cite this document
Furthermore, it is a major factor that determines not just how an organization is been run, but also how employees perceive the management…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
Equity, or perceived fairness, of compensation from the perspective of the employee
Read TextPreview

Extract of sample
"Equity, or perceived fairness, of compensation from the perspective of the employee"

Download file to see previous pages Equity or fairness, from the employee’s perspective is best explained with the equity theory.
Equity theory suggest that in the quest for fairness and justice, employees quantify their inputs and outputs and judge fairness or otherwise, by comparing these to that of a referent other (Werner and Mero, 1999 p.1291). According to Werner and Mero (1999), employee inputs include quality of job performance, length of service, education, experience, amount of responsibility and pressure, productivity on the job, effort expended on the job and organizational citizenship behavior. While outputs subsumes pay and benefits, promotions, status and intrinsic rewards (p.1291).
Compensation can be defined as including pay and benefits, with particular emphasis on pay i.e. wages/salary, bonuses, stock options, incentives, etc. Fairness, on the other hand, is an objective evaluation of competencies, performance and compensation (CAPS, 2003). Fairness or the perception of fairness plays a crucial role in understanding employee behaviors/morale in any organizational settings (Charness and Haruvy, 2000 p.655); employees that perceive that they are being under or over compensated tend to experience feelings of anger or guilt and therefore act in a way to correct the situation or achieve fairness either by altering inputs or outputs, using a different referent for comparison or creating psychological justifications (Werner and Mero, 1999 p.1292).
In this regard, employee perception of fairness is bound to have a profound effect on productivity, job performance, and organizational citizenship behavior. For example, underpayment and other perceived inequities have been related to lower satisfaction, lower productivity, illegal behavior, lower production quality, and increased turnover. Therefore, as concluded by Bass (1995), understanding factors that shape employee perception of fairness will greatly help in building employee trust and improve productivity (Bass 1995 ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Equity, or perceived fairness, of compensation from the perspective of Essay”, n.d.)
Equity, or perceived fairness, of compensation from the perspective of Essay. Retrieved from
(Equity, or Perceived Fairness, of Compensation from the Perspective of Essay)
Equity, or Perceived Fairness, of Compensation from the Perspective of Essay.
“Equity, or Perceived Fairness, of Compensation from the Perspective of Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
...?To what extent do you agree or disagree that greater regulation of employment practices is leading to increased workplace fairness? Executive Summary The issue of workplace fairness has become a serious debate among business executives, theorists, law-makers, industry analysts, employers and general public because the above mentioned groups are directly affected if unfair practices exist. Some of the major workplace issues include employee – employer and employeeemployee conflicts, discrimination on the basis of race / ethnicity, religion, gender, disability and age, unhealthy working conditions, unfair compensation and untimely pay,...
13 Pages(3250 words)Essay
Employee compensation and benefits
...-work-environments-employee-satisfaction-and-patient-safety-care-provider-perspectives/ 18. Armstrong, M. (2006). A Handbook of Human Resource Management Practice. Kogan page publisher. 19. Tropman, J.E. (2001). The compensation solution: how to develop an employee-driven rewards system. John Wiley and Sons. 20. Gustin, K. (2005). A good fit ... or just another trend? Evaluate your goals and priorities for employee benefits. The National Provisioner. Retrieved April 5, 2011, from 21. Munro, J.H (2007). Organizational leadership. Mcgraw-hill 22. Wood, G. (2009). Human Resource...
2 Pages(500 words)Essay
Executive Compensation and Employee Benefits
...compensation plan is subject to the approval of the shareholders who can vote for or against issuance of an equity plan on a non-binding basis. This eradicates enormous windfalls which may result owing to a stock market being on the rise or following a long period of retained profits. Employee Benefits Employee benefits also referred to as perks, perqs, perquisites, benefits in kind or fringe benefits are a number of compensations which are non-wage which are provided to an employee as a supplement to their normal salaries or wages e.g. housing paid for or provided by the employer, group insurance, tuition, retirement benefits,...
8 Pages(2000 words)Term Paper
Employee Compensation
...the effects of equity-based compensation (EBC) given to employees on the performance of organizations and the determinants of equity based compensation. Firms tend to depend largely on equity based compensation and compensate employees according to profits of the firm and now increasingly firms prefer to give equity based compensation for their employees. A positive relationship is thus seen between firm profits and employee compensation and if this could be related to employee...
12 Pages(3000 words)Essay
Employee Compensation
...Swarnambika S Academia Research MBA July 26, 2007 Employee Compensation The literal meaning of compensation is to counter-balance. In the case of human resource management, compensation is referred to as money and other benefits received by an employee for providing services to his employer. Money and benefits received may be in different forms-base compensation in money form and various benefits which may be associated with employee’s service to the employer like provident fund, gratuity, and insurance scheme and any other payment which the employee receives or benefits he enjoys in lieu of such payment....
4 Pages(1000 words)Essay
Db1 employee compensation and benefit
...and misuse of child labour. In addition, in 1994 the school to work opportunities act was introduced to the Fair Labour Standards Act. This act had more impact on those businesses that provided on the job training. The main rationale for this act was to provide on the site training and internship based on an agreement between the employer and the student. If any exemption was to be made from the Fair Labour Standards Act, the guidelines had to be followed. This guideline was to ensure the individual role was clearly defined as an intern and not an employee, hence was not entitled to the benefits that would have been in place if he or she was a permanent employee of the...
1 Pages(250 words)Research Paper
Db3 =employee compensation and benefit
...Behavioral improvement affiliation Behavioral improvement The challenge of creating a long-term behavioral improvement in an organization is based on the psychological influences impacted of employees. In an argument by Hope & Fraser (2003) long term efforts on behavioral improvement are based on the ability of a management team to analyze the wants and needs of their staff and then generate a program that would permanently address these needs and wants. Bratton & Gold (2007) argue that incentives plans are effective in changing employee behavior in the positive direction. However, the authors point out that the durability of this strategy is limited (Bratton & Gold, 2007). This is attributed to the fact that once employees... are...
1 Pages(250 words)Research Paper
Employee Compensation and Benefits
...Equals Total compensation and benefit Package 28,152 Components of the Total Compensation The above figure gives a rough estimated percentage of the expected components of the total compensation. On average, the benefits represent about 25 per cent of the total compensation. However, it is worthwhile to note that it is expected to vary annually given...
5 Pages(1250 words)Essay
Recognizing Employee Contributions - Compensation & Benefits
...Recognizing Employee Contributions of the of the Introduction This study will focuson different approaches that are implemented by an organization so as to enhance performance level of employees. Human resource management is regarded as one of the critical organizational activities. There are various procedures through which team members can be managed and their interests be addressed. Employees usually contribute towards growth and success of an organization. These contributions have to be recognized appropriately as it helps in motivating team members. Benefit plans are designed by an organization in order to fulfill needs and wants of employees. Every firm develops a...
9 Pages(2250 words)Essay
Employee Compensation and Benefits
...Employee Compensation and Benefits Package Employee Compensation and Benefits Package for a Secretary for the HR department of an organisation in Germantown, Maryland Introduction The purpose of this employee compensation and benefits package is to provide all the components of compensations and benefits of a secretary in a HR department of an organisation in Germantown, Maryland. The main components of the employee compensation and benefits include wages, bonus payments, and benefits such as healthcare coverage, disability insurance and retirement benefits. 1. Wages The wages of a...
2 Pages(500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Equity, or perceived fairness, of compensation from the perspective of the employee for FREE!
Contact Us