CHAPTER TWO
2.5 Equity
2.5.1 Equity in relation to health service employees
According to WikED (2006:1) Equity Theory is a theory of „social justice according to which people perceive a situation as fair when their own ratio of outcomes to inputs is the same as those of others with whom they compare themselves.‟ In an organisational setting, the outcomes are the benefits such as salary and recognition arising from inputs which are the perceived contributions including seniority, education, skills and effort. According to the theory, management should strive to maintain a fair balance between inputs and outputs to ensure a productive relationship is achieved with the employee, with the overall result being contented, motivated employees. Fowler (2006:1) observes that the theory is built on the belief that employees become de-motivated if they think that their inputs are greater than the outputs.
Internal Equity refers to fair compensation with respect to how different positions within an organization relate to each other while External Equity describes competitive compensation that takes the market value of a job into consideration.
Garret (2005:14), expounding on Rawls‟ theory of justice, wrote that „access to the privileged positions is not blocked by discrimination according to irrelevant criteria‟ and that „responsibilities ---- should be distributed according to ability -- „. Even though this comment applied to society in general, it is specifically applicable to organisational settings as well. The employees may react to any perceived imbalance through a number of ways including a reduced effort, disgruntlement, being difficult employees, making demands on management for improved conditions of service or by seeking employment in other organisations. The job inputs considered by employees include time, effort, skill, ability, loyalty and personal sacrifice while the job outputs encompass benefits such as salaries, perks, security, recognition, further training and development as well as responsibility and career advancements such as promotions.
It is apparent that the benefits that employees expect from the work-place cover a wide range of issues besides monetary gains. This, therefore, suggests that the factors that motivate employees are more than just the salary and allowances of a financial nature. Of significance is that there should be a fair balance between what employees perceive as having been what they put into their jobs and what they get in return as rewards for performance. The fairness or equity is measured by each employee through a comparison of the factors mentioned above as representing the inputs with the outputs in relation to the inputs and outputs of other employees working under similar circumstances. The emphasis on how equity is perceived is not, therefore, dependent on an employee‟s individual circumstances alone but on a comparison of that ratio with the ratio of work colleagues. One can interpret this scenario to mean that the perceptions that employees have about the ratio of other employees is not always based on fact since there are other factors like rumours or gossip that may help to shape such perceptions. Rumours of this nature, which have the potential to destabilise the work environment may be countered through transparency on the part of managers regarding personnel policies.
An organisation‟s human resource policies, if not viewed as equitable, can have a negative impact on its image and contribute to a high staff turnover as well as adversely affect its efforts towards recruitment and employee productivity. It is noted that perceptions of inequity in the form of an individual being aware that s/he is overpaid does not normally lead to dissatisfaction on his/her part because such a situation has less tension compared to a situation where an individual has perceptions of inequity arising from the belief that they are underpaid. Studies have indicated that individuals react differently to perceptions of inequity depending on the location of the referent others. When perceptions of inequity are, for example, based on comparisons with staff in other organisations, staff members are more inclined to quit employment and make efforts to join the higher paying organisations. When the perceived
inequity is regarded as being based on internal comparisons, employees tend to remain on the job with a reduction of their inputs. While employee perceptions regarding equity issues are expected to differ, it is generally accepted that internal consistency is achievable when employees believe that the remuneration for each job is depended on its worth to the organisation, which can be determined through a job evaluation. The level of skill and amount of responsibility required to perform activities for each job would assist in assessing its worth.
An important contribution of Equity Theory is that it offers an explanation as to why employees satisfied with their work situation at one period can later be demotivated without any change to their work conditions simply because they may have learnt that their colleagues under similar circumstances are enjoying a better output to input ratio. This should alert managers to the fact that lack of transparency in handling matters of employee promotions and salary rises can have the effect of de-motivating other employees.
2.5.2 Equity in relation to health care consumers
Equity in health, viewed from the point of view of „consumers‟ of health services, is to do with perceived fairness in access to health resources. Health inequities refer to differences in health status that are traceable to unequal economic or social conditions which, because they are avoidable, are unfair. The Equity Network (EQUINET) (2010) viewed health equity as addressing disparities in health status that are unnecessary. The Network noted that in Southern Africa, such disparities relate to racial groups, rural-urban set-ups, socio-economic status, gender, age and regional or geographic background. Cited as some of the priority areas for attaining equity in health systems were the following;
i) the establishment of people-led, people-centred health systems that empower and value community members
ii) the introduction of fair, sustainable and equitable financing for health so as to promote the universal right to health
iii) ensuring the availability of adequate, well-trained, equitably distributed and motivated health workers.
The achievement of health equity, therefore, is mainly concerned with equity motivated interventions that seek to allocate health resources preferentially to societal groups that are the least privileged.
Persad et al (2009:1) note that in health care and in other social sectors, „scarcity is the mother of allocation‟ because demand often exceeds supply. Controversy always surrounds attempts to equitably distribute health resources and it is generally acknowledged that no single method can allocate the resources in a manner that can be regarded as just by all members of society. In order to minimise controversy, a number of principles are often combined in the quest to attain a more acceptable outcome in the allocation of health resources. The problem, especially in developing countries, is further compounded by the lack of reliable or evidential data for decision-making, as would be the case with poverty indicators in that there is often a dearth of updated information.
Equity mechanisms are normally introduced by governments as a reflection of the political will to improve the access to health services by the majority of citizens, with particular concern for societal groups that would otherwise not be able to benefit without assistance, for example, the poor, aged, minorities and mentally ill. Measures to improve access to health may include the introduction of compulsory health insurance, pre-payment schemes, fee exemptions as would be the case with infants and the elderly, and free medical care for communities. Other mechanisms to achieve equity may encompass general government subsidies resulting in an overall reduction in user fees, subsidies based on geographic characteristics and the provision of equity funds for vulnerable groups. General government subsidies have the effect of reducing user tariffs for whole populations while geographically based subsidies take into consideration that fact that some regions may be economically disadvantaged due to varying factors such as rough terrains, bad roads and exposure to natural disasters.
Efforts to achieve health equity may also include the provision of incentives, financial or otherwise, to health staff who work in regions that tend to be underprivileged and are shunned by health employees.
Equity funds serve the purpose of incentivising institutions or authorities that provide health services to vulnerable societal groups that cannot access services due to the inability to pay for direct user fees. Free medical care in developing countries has often faced major challenges because of the narrow resource base of most of the countries, thus forcing them to consider cost recovery in health services provision as a more viable option.
Examples abound in Africa attesting to the difficulty faced by countries in their efforts to equitably allocate health resources. In South Africa, Philip (2004) observed that the country has one of the most inequitable societies in the world as far as the distribution of health resources is concerned. This arises from societal disparities, even in the post-independence period, due to large differences in income and the distribution of key social services. The differences, which are also reflected in the health sector, are largely attributed to the systematic discrimination against some racial groups, especially the majority
blacks. Philip (2004) indicates that there is a need to measure and monitor the allocation of resources relative to need within provinces. Briscombe, et al, (2010) in their examination of Kenyan efforts at achieving the equitable allocation of health resources found that the allocation of health sector financial resources remained centralised and was based mainly on the previous years‟ budget allocations rather than on the health needs of communities. The researchers concluded that the allocation of health sector funds in Kenya has not addressed regional disparities in health access. Semali and Minja (2005) conducted research in Tanzania where they analysed needs-based activities the purpose of which was to equitably allocate health resources in the country. The research revealed that health services are not equitably distributed between geographic areas and that urban districts had better health care access than rural areas. There were also large regional differences in the level of health care funding with the anomaly that districts that were economically better-off received slightly more resources from the Ministry of Health.
2.5.3 Problem of deciding on morally relevant values
The methods of resource allocation are complicated by the fact that there are no value-free criteria for basing allocations on. Persad et al (2009) discuss a number of principles that can be used for making health allocation decisions. The principles include making decisions on whether to prioritise: the worst- off or sickest people first; the youngest; the largest number of people; people with a better prognosis or life years; and instrumental value allocation which prioritises specific individuals to facilitate future usefulness. Prioritising the sickest first in the allocation of health resources would include people needing organ transplants, for example those with heart and liver ailments who may be treated at high cost even though the prognosis may not be good. During the NDP9 period, the Botswana Ministry of Health had a difficult time trying to convince citizens that medical conditions requiring organ transplants could not be prioritised due to a shortage of financial resources. Patients needing organ transplants had to go to South Africa for such services.
Youngest-first health resource allocation has also been criticised for ignoring prognosis and excluding elderly citizens who also have the right to life. Age has also been criticised for being a non-medical criterion. Prioritising resource allocation decisions on the basis of saving the largest number of people is said to have the advantage that it avoids the moral complications of having to compare individual lives.
It can also be argued that the right to life is by itself an important factor to be considered in saving lives even though the prognosis may be poor. With regard to instrumental value allocation, decisions on the value of individuals can be very controversial.
It is apparent that no single principle can encompass all relevant values for the achievement of an equitable allocation of health resources. The general consensus among researchers is that a combination of various methods is necessary to attain an „acceptable‟ level of equity in resource distribution. The onus is on health policy makers to ensure that the public understands the basis on which the allocation of health resources is made through the formulation of transparent allocation measures.
This study highlights the need for policy makers and managers to understand the importance of issues of equity in relation to health employees. There is also a need to ensure that health resource allocation systems equitably consider the welfare of patients or consumers in terms of access to health services since health systems are mainly about the recipients of health services. Health policy makers and managers have to appreciate that processes aimed at improving individual or group conditions of service for employees and introducing equity mechanisms for the welfare of patients may actually generate more problems for health organisations than they attempted to fix because organisations are systems whose different components interact for the good of the whole.