Now let’s look at the Implications of Equity theory in the Pearl Project.

We can clearly see that there is inequity among the engineers in PEARL project. This is mainly
because the appraisal system was biased towards employees who put in more hours at work.
These engineers received a higher raise while the employees who put in less hours, were
deemed as average or minimal contributors to the project.

There are mainly 2 types of inequity that arise due to this situation.
First is when the ratio of output to input of an employee is < than the output to input of other
employees. This could lead to discontentment, anger and insecurity among those engineers as
they would think they’re not as good as the other engineers.

In the other case, the ratio of output to input of an employee is > than the output to input of
other employees. This could cause overconfidence and guilt due to being rewarded higher than
others.
• In PEARL project, the management disclosed salary ranges of all employees within the team. This would again
lead to a feeling of being unfit and feeling insecure among those who received lesser pay raise. While those
who received higher pay raises may feel guilty of having received too much. This would lower the motivation
across the team. Management can maintain higher motivation levels by not making the salary ranges public.

• In many instances, Zeth compared his working style to other engineers in his team. He believed that those
who worked long hours like him were the best employees. In reality, forcing employees to adopt to a
particular style would lead to lower output and lower quality work. Employees should be given a free hand to
work the way they want as long as they bring out quality work within deadlines.

• Employees should be given feedback periodically as to how they’re doing so that they can gauge their areas
of improvement. Management should invest in training sessions which would ultimately help the team
achieve success and deliver high quality output.