Do people behave differently when they are working to meet a need than when they are working due to some other motivation? Maslow’s hierarchy of needs of might explain the need to establish base pay guidelines from an employee perspective but it rarely addresses the need employers have to enhance employee job performance. When potential employees can audition perspective employers, it rarely comes down to “base pay” and crafting a desirable compensation package requires a greater understanding of motivation and behavior. President Dwight D. Eisenhower is credited with saying “motivation is the art of getting people to do what you want them to do because they want to do it.” He understood that motivation is not a carrot on a stick, or a stick from behind, but in innate desire to accomplish a task and the rewards, whether emotional or tangible, that are received in return.
Expectancy theory, equity theory, and agency theory each attempt to explain the behavior and motivation of employees and how these impact compensation decisions. HR professionals, and the companies they work for, can use this knowledge to generate policies and programs to meet the motivational needs of their workers. In this Assignment, you will examine the three theories of compensation and how these apply in practice. In addition, you will determine if the theories can be used simultaneously to drive compensation decisions.
To complete this Assignment, review the Learning Resources for this week and other resources you have found in the Walden Library or online, then respond to the following bullet points in a 3- to 4-page paper:
Explain the three theories of compensation: Reinforcement and expectancy theory, agency theory, and equity theory.
Describe how these theories apply in practice.
Could these theories be applied simultaneously or are they too diverse and must be applied individually?
