Equity theory posits that if the person perceives that there is inequality, where either their outputinput ratio is less than or greater than what they perceive as the outputinput ratio of the other person in the relationship, then the person is likely to be distressed. Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. Equity theories have been proposed by adams 1963a, 1965, homans 1961, jacques 1961, and patchen 1961. Equity theory, when applied to the workplace, focuses on an employees work compensation relationship and an employees attempt to reduce any perceived unfairness. John stacey adams is a workplace, social, and behavioral psychologist who came up with the equity theory of motivation in 1963. Equity theory of motivation, developed in the early 1960s by j. Every employee of an organisation expects that he should be treated with justice. The idea of organizational justice stems from equity theory adams, 1963, 1965, which posits that judgments of equity and inequity are derived from comparisons between ones self and others based on inputs and outcomes. He put forward his equity theory in 1963, during a watershed period for our understanding of organisational and employee behaviour. It says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequalities.
Developed by the behavioral and workplace psychologist, john stacy adams, equity theory of motivation is one of the justice theories explaining the correlation between input and outcome of performance of employee at a job with hisher perception of equitable or inequitable behavior from the employers. The relationship between employee perceptions of equity and job satisfaction in the. According to equity theory, in order to maximize individuals rewards, we tend to create systems where resources can be fairly divided amongst. Equity theory based strategies for students on overcoming. Equity theory and its applications in the various spheres. In other words, an employee gets demotivated by the job and his employer in case his inputs are more than the outputs. Outputs are everything you get in return, like your salary, bonuses, raises and promotions.
If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness. Adams equity theory, a powerful theory of motivation. Instead of focusing on money alone, adams equity theory looks at compensation in relation to our social environment, and its subsequent effect on motivation. It was first developed in 1963 by john stacey adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. Stacey adams, recognized that motivation can be affected through an individuals perception of fair treatment in social exchanges.
People compare their exchanges with their employer to exchanges with othersinsiders and outsiders called referents. Yet, an even more pertinent issue is whether the theory as suggested by adams 1965 really holds. This paper will focus on examining equity theory, its propositions and underlying assumptions. Journal of management education leeds school of business.
Considered one of the justice theories, equity theory was first developed in the 1960s by j. The relevance of scientific management and equity theory. Implications of equity theory pay and conditions alone do not determine motivation equity does not depend on our inputtooutput ratio alone it depends on our comparison between our ratio and the ratio of others adams equity theory is therefore a far more complex and sophisticated motivational model than merely assessing effort inputs and reward outputs what matters is the ratio, not. Stacy adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others adams. Equity theory is also called inequity theory as it is the unequal difference that is often the area of interest. Four propositions capture the objectives of the theory. Adams proposed that when a person is in an exchange relationship with another person, he will be concerned about the outcomes and inputs of each. In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. Human resource educatn has a variety of administrative responsibilities for a. In this model, like in expectancy theory, people are viewed as having thoughts, feeling, and opinions that affect their work. The construct is delineated through a series of propositions, and implications for equity research in organizations are discussed. According to equity theory adams, 1963, 1965, employees job satisfaction depends on the ratio between outcomes received for and. An employee compares his or her jobs inputs with an outcomes ratio.
Equity theory deals with social relationships and fairnessunfairness, it is also known as the social comparisons theory or inequity theory gogia, 2010. The principal object of any system is equity or fairness. Management 40 motivation theories equity theory adams, 1963 people develop beliefs about what is a fair reward for one job contribution an exchange people compare their exchanges with their employer to exchanges with othersinsiders and outsiders called referents if an employee believes his treatment is inequitable, compared to others, he or she will be motivated to do something about it that is, seek justice. The equity theory of motivation deals with the way people compare the value of themselves to others in similar work situations based on their inputs and outputs. John adams put forward his theory on motivation in 1963 which extends beyond. Equity theory is based on the idea that individuals are motivated by fairness.
This means that when employees are treated unfairly distributive justice, more punishment or fewer rewards. Its about the balance between the effort an employee puts. When applied to the workplace, equity theory focuses on an employees workcompensation relationship or exchange relationship as well as that employees attempt to minimize any sense of unfairness that might result. Inputs are what you bring to the situation, like your skills, time and education. Equity theory definition first developed in the early 1960s by behavioural psychologist john s. Table above has showed us what inputs and outcomes are expected in equity theory. A critique will follow to determine the falsibility and utility of the theory. The equity theory of motivation how to keep your team. Equity theory adams, 1963, 1965 draws from exchange, dissonance, and social comparison theories in making predictions about how indi viduals manage their relationships with others. John stacey adamss equity theory has been a part of classical management literature since 1963. This theory of motivation states that positive outcomes and high levels of motivation can be expected only when employees perceive their treatment to be fair.
Its about the balance between the effort an employee puts into their work input, and the result they get in return output. Inputs refer to what a person perceives to contribute e. Equity theory is based in the idea that individuals are. The utility of equity theory in enhancing organizational. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. According to the theory, finding this fair balance serves to. Stacy adams, a workplace and behavioral psychologist, who. After reading it, you will understand the basics of this powerful motivation theory what is the adams equity theory. The major components of exchange relationships in adams theory are inputs. If youre interested in equity theory, you may want to read the following. Equity theory states that the employees perceive what they get from a job situation outcomes about what they put into it inputs and then compare their inputs. Introduction to equity theory first developed in 1963 by john stacey adams employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. Equity theory and interpersonal attraction rodger w. Adams asserted that when people feel distress from inequity they may react in one or all of the following ways.
Equity theory proposes that a persons motivation is based on what he or she considers to be fair when compared to others redmond, 2010. Adams equity theory calls for a fair balance to be struck between an employees inputs hard work, skill level, acceptance, enthusiasm, and so on and an employees outputs salary, benefits, intangibles such as recognition, and so on. Stacy adams in 1963 and fully developed in a chapter published 2 years later, equity theory draws on earlier social psychological concepts inspired by fritz heiders balance. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs.
Equity theory based strategies for students on overcoming problems in ph. This article explains the adams equity theory, developed by john stacey adams in a practical way. Equity theory equity theory john stacey adams1963 adams. Therefore, equity theory will be helpful to management in perceiving what motivates employees berkowitz, 1965. Equity theory was first developed in 1963 by jane stacy adams. Human resource educatn has a variety of administrative responsibilities for a number of outcomes that employees receive as part of their exchange with their employers. The relationship between employee perceptions of equity.
One complicating factor in equity theory and research is the difference in individuals tolerance. Inequity theory adams 1963, 1965 has presented a theory of inequity which might at first seem to be inconsistent with the predictions of the cognitive evaluation theory. Equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Men who have been pulled away from their family by their work sometimes try to even the scales with expensive holidays. Ejbe 2010, 35 page 9 outputs include all of the consequences of a participants relationship with the organization employing him. In addition, adams equity theory has stimulated the. According to equity theory, it is the perception of equitability and inequitability. In business psychology, equity theory comes under the umbrella of organisational justice, which is concerned with employee perceptions of a companys internal and external behaviour and how these perceptions fuel or change their own attitudes and behaviour. Most studies are unable to answer this question as this requires the theory to be evaluated within each persons value system. Pdf a role for equity theory in the turnover process. Read this article to learn about the equity theory of motivation and its evaluation.
Equity theory adams, 1963, 1965 draws from exchange, dissonance, and social comparison theories in making predictions about how indi viduals manage. Adams equity theory, also known as the equity theory of motivation, was developed in 1963 by john stacey adams, a workplace behavioral psychologist. Ebook or pdf edited book email encyclopedia article govt. The journal of abnormal and social psychology, 675, pp. Equity theory the motivation theories highlighted in the case which are equity theory and vrooms expectancy theory.
Underpayment inequity bob jane referent other types of inequity why. This does not work well as they are trying to trade shortterm value money for longterm value emotion. Adams equity theory, a powerful theory of motivation toolshero. The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. The relevance of scientific management and equity theory in. Equity theory adams, 1963 1 equity theory adams, 1963 people develop beliefs about what is a fair reward for one job contribution an exchange. In equity theory, motivation is affected by the individual perception of being treated fairly in comparison to others. Equity theory by john stacey adams equity theory attempts to explain relational satisfaction in terms of perceptions of fairunfair distributions of resources within interpersonal relationships. The theory can be a way of unifying an organization, saying essentially that everyone is treated equally. The theory proposes that the employee evaluates the outcomes from the job i.
Meaning of equity theory and it is prioritized by leaders in. Oct 29, 2010 equity theory is considered as one of the justice theories. Equity theory adams, 1963, 1965 continues to be a major model stimulat ing considerable research regarding work motivation in recent years bretz. If an individual or employee perceives any of them as an input then it is an input and. Equity theory of motivation in the equity theory of motivation, employees motivation depends on their perception of how fair is the compensation and treatment for their work input. Adam equity theory sociology bibliographies cite this. Adam equity theory sociology bibliographies in harvard style. John stacey adams proposed that an employees motivation is affected by whether the employee believes that their employment benefitsrewards are at least equal to the amount of the effort that they put into. Equity theory is considered as one of the justice theories. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer. Equity theory in some sense is related to motivationhygiene theory, in that it considers both demotivators and motivators. Equity theory adams, 1963 leeds school of business. Adams equity theory leadership skills training from.
Adams equity theory introduction to equity theory adams equity was developed by john adams in 1963. Equity theory was first developed in 1963 by john stacey adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. In other words, an employee gets demotivated by the job and his employer in case his. There is nothing wrong in this expectation by the employees. According to adams, there are several cognitive and behavioral mechanisms available to. The utility of equity theory in enhancing organizational effectiveness. The equity theory of motivation deals with the way people. Stacey adams, proposes that employees perceive and assess a ratio of jobs inputs related to the outcomes they received for their performance to seek either equity or inequity in their situation and then corrects any. I will examine the research on equity theory in regard to pay since it is assumed to be one of the essential and most important outcomes. John stacy adams introduced equity theory in 1963, and addressed our tendency to compare ourselves to others. If an employee feels that there is an unfair balance between inputs and outputs, the following behaviours may occur. Adams equity theory adams, 1963, 1965 is a prevalent theory of distributive justice that is introduced in most management and nearly all organizational behavior textbooks as a major theory of work motivation. The adams equity theory was developed by the american psychologist john stacey adams in 1963.
What satisfies younger versus older employees, and why. Pdf what do we really know about fiscal sustainability in the. Adams theory of equity is based on the premises of the belief in fair treatment by the organization in terms of equally rewarding all employees doing equal amount and equal level. Pdf we assess the sustainability of public finances in the eu15 over the. According to the theory, employee motivation is the. Equity theory adams, 1963 people develop beliefs about what is a fair reward for one job contribution an exchange people compare their exchanges with their employer to exchanges with othersinsiders and outsiders called referents. He also proposes that the social comparison process begins with the individuals assessment of what he or she need to puts into the job relative to what is. Adams s 1965 equity theory is another form of motivation. Equity theory is one of the major formulations relevant to financial compensation. In equity theory, motivation is affected by the individual. Miles university of georgia equity theory proposes that individuals who perceive themselves as either underrewarded or overrewarded will experience distress, and that this distress leads to efforts to restore equity. The higher an individuals perception of equity, the more motivated they will be. Beehr, 1996 equity theory a version of discrepancy theory of job satisfaction focusing on the discrepancies between what one has on the job and what one thinks is fair what one should have equity theory social comparison takes place perceived discrepancies between ratios may produce tension or dissonance amount of discrepancy corresponds to the. Stacy adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others adams, 1963.
The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. Stacey adams formulation of the theory which is most highly developed and researched statement on the topic. This study combines equity theory as a classic job satisfaction theory with socioemotional selectivity theory as a lifespan aging theory to explain younger versus older employees job satisfaction. Equity theory of motivation examples explained hrf.
In the theory of inequity that has been developed in this chapter, both the antecedents and consequences of perceived injustice have been inequity in social exchange 297 stated i terms that permit quite specific predictions to be made about n the behavior of persons entering social exchanges. John stacey adams s equity theory has been a part of classical management literature since 1963. Adams, equity theory is concerned with defining and measuring the relational satisfaction of employees. First, they may restrict their inputs to a level they believe is consistent with the outcomes they receive. Ppt equity theory adams, 1963 powerpoint presentation. It has been accepted for inclusion in scripps senior theses by an authorized administrator of scholarship. This theory at least addresses a more philosophical concern of a leader the issue of fairness. In essence, adams equity theory is about perceptions of fairness, something that every leader needs to regulate in order to maintain a functional business environment. Equity theory, most popularly known as the equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Inequity exists for an individual when he or she perceives an imbalance in the ratio between outcomes reward for work and inputs efforts at work as other workers outputs and incomes according to. Herzbergs twofactor theory of motivation is opposite to the equity theory of motivation in that employee attitude and workplace motivation are not correlated.
The equity theory owes its origin to several prominent theorists. Studies testing propositions concerning the effects of inequity on performance and on allocation of rewards, and concerning the determinants and the psychological state of inequity are analyzed. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. John stacey adams proposed that an employees motivation is affected by whether the employee believes that their employment benefitsrewards are at least equal to the amount of the effort that they put into their work. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others.
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