Example:
Lincoln Electric Company, with annual sales of $4.4 billion and 2,400 employees, has developed a unique approach to motivating its employees. Ninety percent of the company's sales come from manufacturing arc welding equipment and auxiliary materials. Lincoln Electric's production workers are paid on a piece-rate basis, with no minimum hourly wage, and share in a year-end bonus after two years with the company.
Over the past 56 years, the average bonus has been 95.5 percent of base pay. In recent years, the economy has grown rapidly, with employees earning an average of about $44,000 a year, well above the manufacturing average of $17,000 a year. The company has had a job security policy since 1958, and they haven't laid off a single employee since then.
Of course, in return for this theoretical policy, employees have had to do a few things:
They have had to accept reduced hours during recessions; they have had to accept job transfers; and they have sometimes had to be reassigned to a lower-paying position in order to maintain the 30-hour weekly workload minimum.
Lincoln was so cost- and productivity-conscious that if a worker produced a substandard part, that product could not be credited to that worker's paycheck unless the part was modified to meet the standard.
The strict piece-rate system and the highly competitive performance appraisal system created a very stressful atmosphere, and some workers experienced a certain amount of anxiety as a result, but the stress was conducive to increased productivity.
Expanded:
1. Equity Theory. The performance of the production workers pay by the piece, while the company's bonus system has a set of formulae, taking into account the company's gross profit and the productivity and performance of the staff, this practice on the one hand, the income and the paid fully linked, meaning that the remuneration of the individual and the amount of compensation depends on the individual's production, and has nothing to do with the position occupied.
2. Expectation theory. Most employees enter a company with the expectation that they will be fairly compensated for their work, receive generous bonuses, and have good job security. The company has never dismissed an employee since 58 years, and even during the recession, the average annual income of the company's employees has been much higher than the average level of the society, which are the real portrayal of the concrete application of the expectation theory.
References:
Baidu Encyclopedia --- Equity theory
Baidu Encyclopedia --- Expectancy Theory