Total Rewards

1522 words 7 pages

Running head: New and Improved Rewards at Work

New and Improved Rewards at Works

HRM 533 Total Rewards Dr. Mary Ann Wangemann

Strayer University

June 7, 2012
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Employers use equity based rewards to inspire their employees to reach new heights of

performance (World at work, 2007, p.366). Equity based compensation can best be described as

an employer compensation plan using the employer’s shares as employee compensation. I

believe equity based rewards systems are not as effective as more creative approaches simply

because equity based rewards programs appeal more to employees who may want to own stock

in the company. Equity based rewards systems can be very effective in motivating employees to

work harder at achieving the goals and mission. The equity theory was first developed in 1963

by John Stacey Adams, a workplace and behavioral psychologist, who asserted that employees

seek to maintain equity between the inputs that they bring to a job and the outcomes that they

receive from it against the perceived inputs and outcomes of others (Adams, 1965). Many

companies have since adopted pieces of the theory to create equity based rewards systems.

The equity based rewards systems are created with the belief people value fair treatment

which causes them to be motivated, ethical, fair and dedicated within their employee

relationships of their organization.


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