Check out our new design. Click here to return to old version

Leadership

The objective of Costco Wholesale Store is to provide consumers with high quality products while maintaining low cost and maximizing the wealth of shareholders (Costco, 2008). Motivation of employees is an essential element when an organization aims to perform at its best level. Motivated employees are cooperative, require low supervision, and ultimately make positive contribution to the growth of a business. On the contrary, an organization with unmotivated employees experiences high operation costs which rise from wastage of resources including time.

The main factors that affect performance of employees are environment, motivation, and skills (Bee, 2009). Motivation is said to be the most challenging factor to provide mainly because it involves controlling the behaviour of a person which may be a complex task to perform (Bee, 2009). The other two factors are not difficult to handle since they only require availability of resources. For instance, in case employees lack certain skills, they can always be trained. On the other hand, the environmental factor which has to do with resources that are required to perform certain task can always be made available by purchasing. With this in mind, motivation remains the challenging factor; therefore, it is important for the management team to understand how to go about providing it to the employees.

Adam’s Equity Motivational Theory

This motivation theory by John Stacey Adams emphasizes on satisfaction that is brought by acts of fairness when dealing with employees. According to the theory, an employee considers it fair treatment when the reward of his/her output is directly proportional to the input and when the same is applied to all other employees in the organization (Bee, 2009). This means that rewards to the employees may not be the same, but they are fair depending on the input-output ratio of the employees. This also means that it is acceptable for an employee at management level to receive a higher salary than that of the subordinate level. It also implies that an employee with longer work experience than his/her colleagues may get higher compensation or get first priority in case of promotions. 

When employees feel that compensations and recognitions are done in unclear manner, they will take it as unfair treatment; this affects their performance negatively. On the same note, when an employee is over-compensated, he/she is likely to get the perception that input-to-outcome ratio is not an important factor; this decreases his/her performance. Generally, Adam’s Equity theory puts great value on fairness in the treatment of employees and emphasizes that employees’ performance is greatly affected by the management system and the work environment.

Adam’s equity theory may help in motivating the employees and also help the company to achieve its growth objectives, because when employees realize that the rewarding system depends on their input and outcome, they will work hard to meet the company’s expectations. Ultimately, the company’s performance will improve and objectives including growth objectives will be achieved. In Costco wholesale store, this theory will steer the company to various dimensions of growth including profit growth due to the improved workforce input, low operational cost, and growth in shareholders’ wealth.

Grab your Thanksgiving 20% discount

Order now Discount code: 20TG