If you are living in the UK and pay attention to the news, you won’t help but be aware of just how many public servants are paid more than the Prime Minister – 170 according to the Guardian and Telegraph.
Why does it matter?
Photo credit: World Economic Forum
It isn’t what we get paid that matters
It clearly matters that public servants’ pay is set properly. But why does the comparison with one post matter? The answer seems to be that most of us are less concerned with how much we get paid, than we are with how our pay compares to that of the people around us.
If you work in an organisation, you and your colleagues are probably curious about what everyone earns. And whilst you may be happy with your salary now; how would you feel if the colleague at the next work station doing the same job at the same level earns 5% more than you?
Enter John Stacy Adams
It was John Stacy Adams who first articulated a management theory of fairness. He was an industrial psychologist at the General Electric Company when he published ‘Inequity in Social Exchange’. This puts our feelings into a mathematical framework:
What matters are the comparisons between the outcomes we get (through reward such as pay) and the work we contribute. For me, that ratio is: O/W.
What I will unconsciously do is compare my ratio (O/W) with your ratio, as I believe it to be, (O’/W’). If I find that they are equal, I will be content. If, however, your ratio is bigger than my ratio, I will be unhappy – I will perceive an ‘inequity’.
So do why we worry that 170 senior Civil Servants are overpaid? It must be because there is an instinctive belief that they cannot possibly do that much more work than the Prime Minister. Is this true? My answer to that is: ‘I don’t know’.
Equity works both ways
It is also the case that if I perceive I am over-rewarded, then I will probably feel a sense of guilt. Our innate need for fairness is what drives Adams’ ‘Equity Theory’. He argued that where we feel a sense of inequity, we respond in a way that will, in our minds, remove the inequities.
An example, please, Mike…
Sam is a sales rep; her boss, Chris, is head of sales. Chris regularly sniffs out the best sales leads from her team and then ‘poaches’ the client, to try to make the sale herself. She also re-allocates her less promising leads to other sales reps, like Sam. Sam is angry and wants to do something about this. She is confident in her ability to close a sale and knows she is every bit as good as Chris – if not better.
So what’s going on with Sam and Chris?
Chris believes she is better than her team members. She has the experience and the seniority. Having worked hard to achieve it, she unconsciously (maybe consciously) thinks she deserves to get the best leads and pocket the big commissions.
Sam has worked hard to generate the leads. She feels Chris is unfairly cherry-picking the best leads from Sam and her colleagues, getting the rewards of their work, for little input.
A Force for Change
When Sam and her colleagues feeel the inequity is ‘too great’, they will be motivated to do something about it. Whatever it is – maybe challenging Chris, or under-reporting their progress – Equity Theory predicts change.
Look out quangos!
Management Pocketbooks you might like
Adams’ Equity Theory is one of many theories and models of motivation in the Motivation Pocketbook, by Max Eggert.
You will also find a detailed analysis of two other powerful models of motivation in the Management Models Pocketbook,
… and a wealth of guidance on how to manage your staff, Chris, in the People Manager’s Pocketbook,
… and ideas for how to handle your boss, Sam, in the Managing Upwards Pocketbook,
… and tips on how to have that tough conversation, Chris and Sam, in the Tackling Difficult Conversations Pocketbook.
Yes, Max and I have spelt Stacy correctly – it’s Wikipedia and another famous business amd management website that have it wrong!