A Role for Equity Theory in the Turnover Process Essay

The intent O f the present survey was to analyze the function O f equity theory in the context of the modern-day turnover procedure. A theoretical account was developed and tested with 192 infirmary employees utilizing structural equation mold ( SEM ) . which placed satisfaction and purpose to discontinue as go-betweens of employee turnover. The consequences strongly support the present theoretical account. but besides suggest a function for other go-betweens. some of which are suggested for future research.

Equity theory ( Adams. 1963. 1965 ) continues to be a major theoretical account exciting considerable research sing work motive in recent old ages ( Bretz & A ; Thomas. 1992 ; Carr. McLoughlin. Hodgson. & A ; Maclachlan. 1996 ; Glass & A ; Wood. 1996 ; Greenberg. 1990 ; Harder. 1991. 1992 ; Huseman. Hatfield. & A ; Miles. 1985. 1987 ; Johnson & A ; Johnson. 1991 ; Joshi. 1990 ; King & A ; Miles. 1994 ; King. Miles. & amp ; Day. 1993 ; Miles. Hatfield. & A ; Huseman. 1994 ; Perry. 1993 ; Sheehan. 1993 ; Sweeney. 1990 ; Van Dierendonck. Schaufeli. & A ; Sixma. 1994 ) . Briefly summarized. equity theory suggests that an employee compares the ratio of his or her results to inputs to the ratio of results to inputs of some referent other. Employees who perceive themselves in an unjust state of affairs will be dissatisfied and will seek to cut down the unfairness.

Although Adams ( 1963. 1965 ) proposed a figure of ways that employees might cut down unfairness. research concerned with organisations has tended to concentrate on employee reactions to pay unfairness. such as low public presentation and dissatisfaction ( Greenberg. 1990 ) . Leaving the state of affairs ( i. e. . voluntary turnover ) was besides postulated as a tenseness reaction manner by Adams ( 1 963. 1965 ) . but merely a few surveies have examined the impact of unfairness perceptual experiences on turnover in the context of modern-day thoughts sing a turnover procedure ( e. g. . Horn & A ; Griffeth. 1995 ; Mobley. 1977 ) . The intent of the present survey is to prove the relationship between equity perceptual experiences and turnover within the context of such a modern-day turnover procedure theoretical account. ‘The writers greatly appreciate the remarks of Peter Hom. Debra Cohen. Peggy Lewis. and two anon. referees on earlier versions of this paper.

1018 GRIFFETH AND GAERTNER

Early research into the equity-turnover relationship. utilizing aggregative rates of turnover. found assorted consequences. For illustration. Telly. Gallic. and Scott ( 1971 ) found aggregative perceptual experiences of equity within fractional monetary units of an organisation to be significantly related to that subunit’s turnover rate for the old 11 months on five of the seven dimensions ( e. g. . supervising. societal facets ) . Dittrich and Carrel1 ( 1 979 ) developed and tested a five-dimension step of equity perceptual experiences that they called the Organizational Fairness Questionnaire ( OFQ ) .

They found that the five factors ( wage regulations. pay disposal. work gait. pay degree. and rule disposal ) underlying the OFQ were non prognostic of turnover rates by section. However. wage regulations ( a factor that combines comparings of one’s ain wage to that of coworkers with the equity of the regulations for allowing wage additions and publicities ) and work gait ( equity of the supervisor in keeping a just gait of work activity ) were prognostic of absence. While non straight prognostic of turnover. employee perceptual experiences of the equity of wage regulations and equality of wage among coworkers and of supervisor control of the work gait were strongly prognostic of occupation satisfaction ( R 2 = S8 ) .

Equity and Individual Turnover

At the single degree. trials of a direct relationship between equity perceptual experiences and turnover have besides had mixed consequences. For illustration. Oldham. Kulik. Ambrose. Stepina. and Brand ( 1 986 ) found that equity perceptual experiences in combination with occupation complexness descriptions were marginally prognostic of turnover. Vecchio. Griffeth. and Hom’s ( 1986 ) initial findings were that perceptual experiences of supervisor control over work-pace equity were significantly related to turnover. However. when leader-member exchange quality was added. this variable to the full mediated the equity-turnover relationship.

Finally. Randall and Mueller ( 1995 ) found no important direct relationships between turnover and distributive or procedural justness perceptual experiences. They suggested two plausible accounts for this deficiency of important findings. First. the consequence of equity on turnover is non direct. but instead is mediated by several other variables such as occupation satisfaction. organisational committedness. and purpose to remain. Second. a deficiency of alternate employment chances among the nurses in their sample induced them to remain despite possible unfairnesss. This latter account seems less likely since turnover and shortage rates among nurses remained high into the mid-1990s ( Hom & A ; Griffeth. 1995 ) .

Another set of surveies has examined the relationship of equity perceptual experiences to purpose to remain. The consequences in these surveies have besides been mixed. Scholl. Cooper. and McKenna ( 1 987 ) found that comparings utilizing others outside the company in similar occupations and comparings of one’s ain wage in the yesteryear were important forecasters of turnover purposes. However. Ronen ( 1 986 ) found that neither equity referent ( others inside the organisation or others outside the organisation ) nor occupation degree ( skilled workers vs. directors ) was significantly related to turnover purposes. Finally. Berg ( 1991 ) found that planetary perceptual experiences of equity were important forecasters of purpose to remain among telecasting employees. Strictly talking. nevertheless. Berg did non really measure equity. Alternatively. he asked employees to measure their perceptual experiences of equity without mention to some comparing other.

Again. it seems plausible. particularly based on Adams’ ( 1 963. 1965 ) theory. that occupation dissatisfaction would be the immediate consequence of unfairness perceptual experiences. interceding the effects on turnover purposes and existent turnover. In decision. these surveies show comparatively weak or inconsistent support sing the relationship between unfairness perceptual experiences and turnover. There are several grounds for this incompatibility. First. all of these surveies examined the direct influence of equity on turnover. by and large disregarding the interceding function of felt tenseness of occupation dissatisfaction ( Adams. 1963. 1965 ) . Some surveies attempted to associate equity perceptual experiences to purpose to remain ( or quit ) . a weak trial of the equityturnover relationship.

Harmonizing to Steel and Ovalle ( I 984 ) . purpose to discontinue is a comparatively hapless alternate for existent turnover. typically accounting for less than 25 % of turnover discrepancy. Furthermore. the earlier surveies were unable to take advantage of recent progresss in the survey of turnover placing the procedure of employee turnover ( Horn & A ; Griffeth. 1991. 1995 ; Hom. Griffeth. & A ; Sellaro. 1984 ; Mobley. 1977 ) . Contemporary turnover theoreticians posit a series of cognitive and affectional linkages translatingjob dissatisfaction into turnover knowledges and behaviour. Possibly the major failing of each of these surveies was the skip of satisfaction as a mediating variable.

More recent theoretical accounts that propose linkages between equity and turnover explicitly integrated perceptual experience of equity as an exogenic variable that has an impact on turnover via occupation satisfaction and quit purposes ( Hulin. Roznowski. & A ; Hachiya. 1985 ; Price & A ; Mueller. 198 1 ) . Two surveies have placed the equity-tumover relationship within the context of such a procedure theoretical account. Summers and Hendrix ( 1991 ) included perceptual experiences of wage equity for comparings with a generalized other ( person of similar cognition. accomplishments. and abilities ) . ego ( past ) . others inside the company. and others outside the company. Respondents were so asked to choose the three most of import referents. Merely the equity perceptual experiences with respect to the individual most of import referent were used as a step of wage equity.

Of respondents. 6 % chose others outside of the company as their most of import referent. A generalised other was the most often selected. followed closely by ego ( past ) . The theoretical account trial revealed a important mediated relationship between wage equity and turnover. The important and hypothesized intervening variables were pay satisfaction. overall occupation satisfaction. and purpose to go forth. Iverson and Roy ( 1994 ) performed a comparatively comprehensive trial of the Price and Mueller ( 1981. 1986 ) turnover theoretical account. which specifically includes elements of equity perceptual experiences of assorted benefits and pay in relationship to coworkers. Although the correlativity coefficient for the relationship between equity and occupation satisfaction was positive and important. the hypothesized and revised theoretical account yielded a negative ( besides important ) relationship between the two variables.

Such a reversal may be declarative of multicollinearity ( Neter. Wasserman. & A ; Kutner. 1990 ) and suggests that a more penurious theoretical account might be practical. A 2nd failing of this trial of the equity-turnover relationship is the usage of behavioural committedness. or purpose to remain. instead than existent turnover as the ultimate dependant variable ( Steel & A ; Ovalle. 1984 ) . However. both the hypothesized and the revised theoretical account confirm affect Cjob satisfaction ) as a go-between of the relationship between equity and purpose to remain. For both of the procedure theoretical account trials. the conceptualisation of equity was narrowly limited to distributional results. such as wage and benefits ( Iverson & A ; Roy. 1994 ; Summers & A ; Hendrix. 1991 ) or to comparison others inside the organisation ( Iverson & A ; Roy. 1994 ) .

Prior research has found multiple comparing others to be of import and. although wage seems to rule perceptual experiences of equity ( Berg. 1991 ; Scholl et Al. . 1987 ; Summers & A ; Hendrix. 1991 ) . other aspects are besides of import ( Oldham et al. . 1986 ; Telly et Al. . 1971 ; Vecchio et Al. . 1986 ; Wilhelm. Herd. & A ; Steiner. 1993 ) . It is the primary intent of the present probe to review the function of equity perceptual experiences within the context of modern-day turnover theory and empirical research at the single degree of analysis. Toward this terminal. a theoretical account of this procedure is developed and tested based on equity theory. Both the predictive and nomological cogency of this theoretical account are examined utilizing structural equation mold ( SEM ) . This theoretical account and the hypothesized relationships among the theoretical account concepts are shown in Figure 1.

Model Development

The present theoretical account posits a turnover procedure initiated by perceptual experiences of unfairness in relationship to three cardinal determiners of occupation satisfaction: wage satisfaction. satisfaction with one’s supervisor. and satisfaction with the work itself. We postulate perceptual experiences of unfairness as determiners of these aspects of occupation satisfaction. and. in making so. we expand on two constituents of Adams’ ( 1 963. 1965 ) equity theory. First. Adams’ conceptualisation of equity as concerned with the ratio of inputs to results merely ( distributive justness ) reflects the contemporary apprehension of justness.

More late. justness has been characterized as a procedure. and research workers have delineated two meaningful elements in add-on to distributive justness as of import to explicating perceptual experiences of justness ( Bies & A ; Moag. 1986 ; Greenberg. 1990 ) . These two elements are procedural justness. which refers to the regulations and processs used to get at the distribution of results. and interactive justness. which refers to the manner those who carry out the procedure relate to the receiver party ( Bies & A ; Moag. 1986 ; Greenberg. 1990 ) . While these elements tend to be extremely correlated. each unambiguously adds to our apprehension of the justness perceptual experiences and reactions to those perceptual experiences ( Folger & A ; Konovsky. 1989 ; McFarlin & A ; Sweeney. 1992 ) .