Overview of the theory
In 1976, Locke presented the Value Percept Theory which states that the value provided by a job plays a key role in influencing the job satisfaction of employees. To elaborate, he states that the job satisfaction of an employee will be dependent on the fact that whether the job delivers the value that matters to the employee. The whole theory is based on the perspective that employee holds towards their job and based on the perspective the employee decides the value of the job.
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The theorist states that many employers and employees believe that monetary and promotional benefits are the biggest drivers of the value of job satisfaction but Locke believed that employees' perspective toward their work has the biggest and strongest correlation with overall job satisfaction.
To further elaborate, Locke presented 5 job facets that relate the most to job satisfaction.
1. Supervision satisfaction
Supervision satisfaction is based on employees' perspectives towards their boss and the management approach used towards them. For example, if the employer uses the micromanagement approach, then the employees get disengaged and the value of the job satisfaction decreases.
2. Pay satisfaction
The value in pay satisfaction is based on the pay employees want and what employees received. The closer the incentive of the employee is to the desired amount, the more the employee values the job and hence, is more satisfied with the job.
3. Promotion satisfaction
In this category, employees are more concerned about their promotion in a workplace and always want that their workplace should practice fair and frequent promotions. The main cause behind this is that promotion offers better monetary benefits, enhanced recognition, and provides personal growth. Hence, the better the promotion policies of the organization, the more satisfied the employees.
4. Co-worker satisfaction
Co-worker satisfaction is based on the perception of employees towards their team members or colleagues. The value of this category will be dependent on the interactiveness, and support provided to the employees by their team members.
5. Work itself satisfaction
Last but not the least, the job satisfaction from the work itself means the employee's perspective towards their work and obligations in the workplace. Employees usually dislike repetitive work and duties that do not provide them with personal growth. Hence, they fail to value their work.
Probing further the theory states that based on these job facets, employees decide the value that is derived from their jobs. In addition, Locke also provided the formula for calculating the job satisfaction of employees.
S = (VC - P) × V
Where S stands for satisfaction, VC stands for value content or the desired amount, P refers to the perceived amount of job value and V stands for the importance of the job value of the person.
To simplify, we can also say that,
Satisfaction = (want - have) × importance
After discussing the theory, the next section will shed light on the implication of the theory in the workplace. So, let us move ahead without any further ado.
Implementation of the theory in a workplace
1. Identify the key job facets influencing the employees
The first and foremost step of implying this theory is to identify the significant job facets that influence the members of the workplace the most. To elaborate, this step will include the analysis of employees’ behavior, and out of the 5 factors stated above, which factor satisfies the team maximum. Analyzing the behavior will assist in resting effective strategies for the efficient and effective required transformations.
2. Boost the underperforming job facets
After identifying the next step will be to boost the factors that are demotivating the employees and can be transformed and to accomplish that, the following steps can be taken by the employers or managers.
Employers can make sure that project managers or the upper management are not using the approach of micromanagement in the workplace that may cause burnout to the employees. Instead, multiple sessions can be organized for the managers and employees on how to trust the process while performing the task.
Employers should always conduct monthly or quarterly salary reviews to make sure that employees are paid according to their efforts invested in the growth of the company. If not, then rational monetary growth should be provided to the employees to satisfy their pay satisfaction.
Employers should review the company’s promotion policy and clearly state the rules, regulations, and qualification criteria for the promotion to the employees. This will ensure that employees are very well aware and will try to give their all to the company in order to satisfy their promotional needs. Another obligation to the employer lies in assuring the promotions to the employees are given in the most transparent and unbiased manner.
Employers ought to make peace with the fact that the work environment of the company is healthy and positive enough that employees can make the most of their time and be productive. An effective method to ensure that is to collect feedback from the employees and ensure strict policies to maintain a healthy work environment.
Work satisfaction is often disrupted when employees get similar types of tasks to perform daily and do not see any kind of healthy growth opportunities. To ensure the elimination of this dissatisfaction, employers must implement new and creative ideas to ensure the engagement of employees. In addition, various training sessions and programs can be organized to provide growth opportunities to the employees.
Importance of implementing the theory
Moving ahead, implementing this theory in a workplace brings many benefits along. Hence, the given below are some of the causes to implement this theory in a workplace.
1. Assist in enhancing productivity
Once the employees are attracted to the reward they value, they will invest their 100 percent to achieve the desired outcome for the reward. Hence, implementing the theory will assist in making the employees more productive and efficient.
2. Helps in retaining and engaging employees
With the intent of earning a favorable reward, the employees will engage more effectively in performing the assigned task. Attainment of the desirable reward will assist in gaining the loyalty of the employees for a longer period of time. Henceforth, this theory will assist in retaining and engaging employees with the organization.
3. Aids in enhancing employer brand
Keeping the employees happy and satisfied by implementing the theory will assist in enhancing the reputation of the company in the eyes of consumers and will also enhance the employer brand which will help in attracting the best talent for the future as well.
On the contrary, along with many positive benefits, there are some limitations that need to be considered while implementing this theory in the workplace.
Limitations of the theory
- Neglect of external factors - The theory failed to acknowledge the impact of external factors such as competitors' pay or promotion structure that can affect the satisfaction of individuals in their workplace.
Moving ahead, below given illustration of the theory with an example will assist in comprehending the theory in a better way.
Example of implementing the theory in a workplace
Netflix Inc. is an America-based OTT platform with a net worth of $176.07 billion as of 2021. Under the leadership of CEO Reed Hastings, the employees of the company are really happy and satisfied.
Implying the Value Percept Theory, we can categorize the perks of being an employee of Netflix as following
- Pay satisfaction - With a survey conducted of 4000 people surveyed, 70% of the employees are satisfied with the pay and compensation structure of Netflix. This shows that the majority of the employees are satisfied with the pay structure of the company.
- Promotion satisfaction - Based on the survey conducted by Indeed, employees at Netflix state that the company prefers internal hires for the promotion rather than hiring from outside. In addition to the same, 44% of the employees agree that they were positioned for promotion or career advancement at Netflix.
- Supervision satisfaction - Supervisors at Netflix use a hands-off approach for their employees. To elaborate, the managers at Netflix believe in their team and do not interfere much in the daily practices of employees. Because of the utilization of the macro-management approach, the employees are satisfied with the supervision of the employees.
- Co-worker satisfaction - 89% of the employees believe that their work environment is positive and Netflix is a fun place to work. This implies that employees are satisfied with the work culture and satisfied with their teams and co-workers.
- Work itself satisfaction - From another survey of Indeed, it was concluded that 48% of the employees believe that they get enough opportunities to learn and adapt new skills in the office. This shows that employees are satisfied with the work opportunities provided to them at Netflix.
Key takeaway - With the implication of the Value Percept Theory in Netflix, we concluded how various factors of Netflix contribute to the satisfaction of employees in the organization.