$1.$Needs Drive Performance

Neha Kapoor $($Kapoor$)$ and Tina Menon $($Menon$)$ was excited about their first job offer from a leading multinational company, Meridian Business Solutions $($Meridian$).$ Meridian, a UK$-$based consultancy, offered business development and improvement solutions to organizations in a wide range of industries. Kapoor and Menon had just passed out from a prestigious business school with a masters degree in business administration. Both were bright students and Menon had been a topper all through in college. As students, Kapoor and Menon had always dreamt of working for a multinational company like Meridian. Their dream finally came true when they received a call from Meridian. Having topped the written test and the personal interview, both were offered the position of business development executives in the company. Their job responsibility was to tap potential clients from the corporate world. This seemed to be an ideal break for them as they were keen on getting a job that offered wide exposure to the business environment. The job was a challenging one that provided adequate opportunities for valuable corporate experience. Besides, the compensation offered was also at par with the best in the industry.

The first few months at Meridian were a learning experience for both of them. Kapoor and Menon were extremely enthusiastic about their jobs. The company had given them adequate training and reasonable autonomy to perform their job. They soon began handling clients independently. They were involved in getting new clients and were also responsible for maintaining smooth relationships with them. Both of them reported to the regional sales manager, Nitish Bajaj $($Bajaj$).$ Of the two, Bajaj was more impressed with Menon$$s performance. Within a couple of months of joining the company, Menon had obtained and closed a deal with a very high profile client. Business with this client was expected to rake in huge profits for the company. In a party organized in the company to celebrate the occasion, Bajaj announced a cash award for Menon in appreciation of her commitment had dedication to the job. This served to reinforce Menon$$s motivation and made her strive even harder to better her performance.

After both of them had completed a year of working in the company, the time for their performance review came up$.$ The company had a yearly performance appraisal system which rated employees on the basis of their performance throughout the year. Based on these ratings, the employees were paid hefty performance bonuses that served as effective motivators for its employees. However, the yearly performance appraisal brought with it a rather unpleasant surprise for Menon.

Menon had hoped to receive a handsome bonus as an outcome of her performance review. She was aware that she would be appraised by Bajaj who had expressed appreciation for her good performance and announced a cash award for her within a few months of her joining the company. Meridian, however, did not have a transparent policy regarding appraisals and remuneration paid to employees. So$,$ the outcome of the appraisal was not immediately known to anyone but the employees themselves. It was only in source of time that details about the rewards could be gathered informally.

In Menon$$s appraisal. And what she herd shocked her. Kapoor had been given a bonus much higher than what she had been given. It came as a surprise not only to Menon, but to the rest of the employees as well that Menon was better at the job than Kapoor. The performance bonus thus, served as a demotivating factor for Menon as the began to feel that she deserved much more than what she had got and that her performance certainly did not call for receiving a lower bonus than Kapoor.

Menon$$s demotivation was evident from her subsequent performance on the job. She stopped working as enthusiastically as she died earlier and was content with doing just the bare minimum required for her job. This change in attitude took place as she obviously felt that there was no point working so hard when she wasn$$t being recognized for doing a good job. On comparing the efforts she had put into the job and he reward she had received, with the efforts put in the way employees were rewarded at Meridian. Since she was being paid less than her expectations, she decided to put in less effort so as to bring about a perceived equity of pay between Kapoor and herself.

Consequently, Menon$$s productivity level deteriorated and, in turn, it affected the performance and profitability of the organization. Thus, Menon$$s negative attitude resulted in negative implications for the organization. Also, this frustration at the job made Menon look around for new jobs.

Questions for Discussion

$1.$ The annual performance review had a demotivating effect on Tina Menon. Briefly discuss the motivational theory that best describes Menon$$s response to the appraisal.

$2.$ Based on the equity theory, explain in what othe