Skip to content

ACCA Strategic Professional · Strategic Business Leader · Enabling success: talent management

Brightwell Hospital's nurses accept that their pay is competitive, but learn that nurses at a neighbouring hospital doing the same grade of work receive an additional annual allowance. Turnover then rises. Which theory best explains the behaviour, and what does it imply for management?

Adams' equity theory explains it. Nurses compare their inputs and outcomes with those of peers at the neighbouring hospital and perceive unfairness, which raises turnover. Management should review external pay comparability and explain the reward structure transparently to restore perceived fairness.

  1. AAdams' equity theory: staff compare their input-outcome ratio with others, and perceived inequity leads to reduced effort or exit, so management should review external pay comparability and communicate the basis of rewardsCorrect
  2. BMaslow's hierarchy: nurses have moved up to self-actualisation, so management should offer more autonomy only
  3. CTaylor's scientific management: pay is the only motivator, so management should introduce piece rates
  4. DMcClelland's need theory: nurses have a high need for affiliation, so management should organise social events

Explanation

The trigger is comparison with a similar external group, which is the core of equity theory. Perceived under-reward leads to lower effort, claims for more pay or leaving. Management should check external comparability and transparency of reward. The other theories do not fit the comparison-driven reaction.

Did you get it right without looking?

One question tells you little. A timed set on Enabling success: talent management shows your real accuracy, how long you take and where you lose marks.

Practise Enabling success: talent managementFree diagnostic mock

More Enabling success: talent management questions