Applying Motivation Theories to Compensation Essay

Applying Motivation Theories to Compensation - Essay Example As the discussion stresses Pat’s job has greater responsibility than that of Chris. Pat could be more successful or performs highly than Chris. Ninthly, pay might have job that involve more complex tasks than those of Chris’s.From this paper it is clear that Pat and the boss might have blood relationship thus giving her more benefit. Race: Chris might be in minority group and their boss normally discriminates against them. Also, Pat might know about the company’s negative side so she is paid more to keep her mouth shut. Finally, Pat might be helping in marketing the company thus gaining more customers. She therefore deserves a referral fee. Equity theory is relevant to most of the above reasons. Equity theory explains relational satisfaction regarding perceptions of fair resource distribution within interpersonal relationships. There should be fair treatment of employees in the work place based on the ratio of inputs to incomes. Employees with advanced education, higher experience, more superior position, higher degree, greater company loyalty, greater responsibility, greater performance and more complex tasks should be paid more than others. This is because it would support the wisdom of those reasons because job difficulty is a relevant input.  Compensation plan elements such as Piece-Rate and Recognition Awards basically account for the pay differentials. This is because an employee who produces more units or more services should be compensated highly that the other.