Do the 3 theories of compensation remain consistent even with the Coronavirus affecting the workplace and our lives?
Do the 3 theories of compensation remain consistent even with the Coronavirus affecting the workplace and our lives? For example, according to the Equity Theory, “…there should be equity in the pay structure of an employee’s remuneration.
Do the 3 theories of compensation remain consistent even with the Coronavirus affecting the workplace and our lives?
This week we have been discussing the 3 Theories of Compensation:
1. Reinforcement and Expectancy
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3. Equity
Do the 3 theories of compensation remain consistent even with the Coronavirus affecting the workplace and our lives? For example, according to the Equity Theory, “…there should be equity in the pay structure of an employee’s remuneration. If the employee feels he is not being paid fairly for the amount of work he does in a day, it will result in lower productivity, increased turnover and also high absenteeism. “
Looking at the amount of work our nurses and doctors are performing, does the Equity Theory still apply? Further, what about the cashiers working in our local supermarkets? Or our truck drivers? Finally, do these theories remain consistent, or does it change in the face of this pandemic?
More details;
Theories of Compensation
Compensation is the remuneration give to the employees for the work they do for the organization. In other words, an employee is entitle to both the financial and the nonfinancial benefits in return for his contribution to the organization.To understand which component of compensation is efficient, we need to go through the theories of compensation. There are three theories of compensation viz. Reinforcement and Expectancy Theory, Equity Theory and also Agency theory which are explain ed below.
Reinforcement and Expectancy Theory: This theory is based on the assumption that, the reward-earning behavior is likely to be repeated, i.e. an employee would do the same thing again for which he was acknowledged once.
Similarly, in the case of Expectancy Theory, given by Vroom, the employee is motivated to do a particular thing for which he is sure or is expected that performance will be followed by a definite reward or an outcome.
