Agrarian Tractors, a farm equipment company, issues quarterly bonuses to its sales agents. This quarter Clay sold more tractors than anyone else in the company and exceeded his sales goals for the fifth consecutive quarter. As the bonuses were issued, Clay received the same bonus as all the other Agrarian Tractors sales agents. Per equity theory, Clay will probably:
focus on just meeting his quarterly goal.
be cooperative with the other sales agents.
determine new tactics to drive even more sales.
ignore his feelings of resentment and frustration.
The Correct Answer and Explanation is:
The correct answer is: focus on just meeting his quarterly goal.
Explanation:
Equity theory, developed by John Stacey Adams, is a motivation theory that explains how individuals perceive fairness in the distribution of resources or rewards. According to this theory, employees compare their input-to-output ratio with that of others. Inputs include effort, skill, experience, and time, while outputs are rewards like pay, bonuses, recognition, or promotions.
In this scenario, Clay has sold more tractors than anyone else and exceeded his sales goals for five consecutive quarters. This means his inputs (effort, skill, and performance) are higher than those of his peers. However, the outputs (bonuses) he receives are the same as everyone else’s, indicating an inequity or unfairness from his perspective.
When people perceive inequity, they experience feelings of distress, frustration, or resentment. To restore equity, individuals may take one or more of the following actions:
- Reduce their inputs: If the reward does not match the effort, the individual might reduce their effort to match the perceived reward. In this case, Clay might “focus on just meeting his quarterly goal” instead of exceeding it, because going beyond no longer results in additional rewards.
- Increase their outputs: They might try to negotiate for higher rewards or bonuses.
- Change their perception of the inputs or outputs: They might rationalize that the reward is fair for some reason.
- Change the comparison referent: They might compare themselves to someone else.
- Leave the situation: They might quit the job.
Since the question focuses on what Clay will “probably” do in response to the inequity, reducing effort to only meet the basic goals is the most common response in equity theory when a high performer perceives unfair treatment in reward distribution.
Clay being cooperative or ignoring feelings are less likely, as inequity usually triggers motivation to restore fairness. Also, “determining new tactics to drive even more sales” would imply increased input despite no increase in output, which would increase the inequity and is less rational based on the theory.
Summary: Clay will likely reduce his effort to align his inputs with his outputs, meaning he will just meet his sales goals rather than exceed them, which matches the answer: focus on just meeting his quarterly goal.