Equity Theory
- Theory / Concept Name
- Equity Theory
- Description
Adams proposed that employees are motivated by perceived fairness in the workplace, not just by the absolute amount of reward.
Core Concept
Employees compare their own input-to-outcome ratio with that of a referent (a comparable person):
- Inputs: effort, skills, experience, education, loyalty, time.
- Outcomes: salary, recognition, benefits, job security, status.
Three States
- Equity: Ratios are equal → satisfaction and sustained motivation.
- Under-reward inequity: Own ratio is lower → anger, reduced effort, leaving the job.
- Over-reward inequity: Own ratio is higher → guilt, may increase effort or rationalise.
Responses to Inequity
- Change inputs (work less or more).
- Change outcomes (demand a raise).
- Change the referent (compare to someone else).
- Distort perceptions.
- Leave the organisation.
Managerial Implication
Transparency in pay and recognition processes reduces perceived inequity.
- Theorist / Pioneer
- John Stacey Adams
- Year
- 1963
- Category
- Motivation