Outputs are everything you get in return, like your salary, bonuses, raises and promotions. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. This article explains the adams equity theory, developed by john stacey adams in a practical way. Adams equity theory leadership skills training from. Looking back over our series, adams equity theory ties in closely with those of maslow and herzberg. Equity theory, when applied to the workplace, focuses on an employees work compensation relationship and an employees attempt to reduce any perceived unfairness. However, equity theory takes a less straightforward and more fluid approach than previous models. The utility of equity theory in enhancing organizational effectiveness article pdf available in european journal of economics, finance and administrative sciences. Most criticisms on equity theory concern the artificial laboratory conditions in. The equity theory of motivation employee motivation. Pdf the utility of equity theory in enhancing organizational. The adams equity theory was developed by the american psychologist john stacey adams in 1963. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. Extrapolating from this, adams equity theory tells us that the higher an individuals perception of equity fairness, then the more motivated they will be.
Adams equity theory, a powerful theory of motivation. Equity theory of motivation equity theory was developed by james stacy adam. In this paper the focus will be on the expectancy theory of motivation which was propounded by victor vroom. In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. Harder 1991 pointed out a major distinction between the expectancy theory and the equity theory. The research supports equity predictions in the area of underpayment, but the overpayment effects have not been satisfactorily demonstrated. Considered one of the justice theories, equity theory was first developed in the 1960s by j.
Scholars have questioned the simplicity of the model, arguing that a number of demographic and psychological variables affect peoples perceptions of fairness and interactions with others. Equity theory, as developed by adams 1965, considers motivation and job. As per this motivation theory, an individuals motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Equity theory adams, 1963, 1965 draws from exchange, dissonance. Process theories of motivation equity theory business essay. This theory is based on social comparisons and the notion that unequity is a motivating state. Human beings are different from other living beings because they have emotions and it is due to emotions that we do not like unequal treatment between two people who are putting same effort whether its at home or at a college or at work. While equity theory is a significant step forward, the theory itself needs further specification. Criticism has been directed toward both the assumptions and practical application of equity theory. Equity theory focuses on determining whether the distribution of resources is fair to both. The relevance of scientific management and equity theory in everyday managerial communication situations reginald l. But, in reality, the concept of fairness is not appreciated by all.
Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. 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. Equity theory is one of the major formulations relevant to financial compensation. Conversely, an individual will be demotivated if they perceive unfairness. If youre interested in equity theory, you may want to read the following. It is a cognitivecentered theory as it is basically concerned with the person himself, his. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. When an individual feels that he or she has been treated unfairly compared to others, the individual will be motivated to remove the discomfort and would develop some sort equity to the. 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. Equity theory proposes that a persons motivation is based on what he or she considers to be fair when compared to others redmond, 2010. The theory proposes that the employee evaluates the outcomes from the job i.
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. It says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequalities. Equity theory is frequently identified as a vital theory for understanding employee motivation. The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work.
Equity predictions are more likely to apply to people who are morally mature. Equity theory of motivation the equity theory of motivation is used to describe the relationship between the employees perception of how fairly is he being treated and how hard he is motivated to work motivation is the activation of an energized goaloriented behavior. Once comparison with a particular other has stablized over time, person will be highly resistant to changing comparison persons. Equity theory proposes that peoples motivation, performance and satisfaction depend on their subjective evaluation of the relationships between their effortreward ratio and the effort reward of others in similar situations. Criticism has been directed toward both the assumptions and practical application of equity. A critique will follow to determine the falsibility and utility of the theory. Higher is individuals perception of fairness, greater is. It is a cognitivecentered theory as it is basically concerned with the person himself, his beliefs, feelings or perceptions. 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. Behavioral economics has recently started to apply game theory to the study of equity theory. If the employee perceives inequality, he or she he will act to correct the inequity. 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 stephan robbins expectancy theory is a theory that says that the strength of a tendency. Equity theory reminds us that people see themselves and crucially the way they are treated in terms of their surrounding environment, team, system, etc not in isolation and so they must be managed and treated accordingly. Maslows theory of needs is the most widely known motivational theory, proposed by abraham maslow in 1970. According to equity theory, it is the perception of equitability and inequitability. Equity theory is used in parlance of human resource management. The utility of equity theory in enhancing organizational. After reading it, you will understand the basics of this powerful motivation theory what is the adams equity theory.
Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. Applying adams equity theory to employee engagement. Equity theory, like other theories within the relationships topic, proposes a universal theory of romantic relationships that suggests that people are content in their relationship if the benefits equal the costs. Over the period leading up to the economic crisis, western liberal democracies adopted market based economic policies that allowed disparities between the income and. Get the complete knowledge about equity theory of motivation from myassignmenthelp experts. Equity theory of work motivation is based on the social exchange process. The central theme of the theory is the judgment of fair treatment. Frameworks for equity helen hodgson in the wake of the global economic crisis of 200809 public concern has focused on inequities within society. According to this theory of motivation, an individuals motivation level is connected with his perception of equity, fairness and justice practised by management. Finally, summary and recommendations for future research will follow. Equity theory helps explain how highly paid union workers can go on strike when no one else seems to understand why. 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. Stacy adams, a workplace and behavioral psychologist, who.
He devised a hierarchy of human needs divided into five levels. Equity theory, as developed by adams 1965, considers motivation and job satisfaction as the result of a comparison of a workers perceived. Equity theory 179 equity theory as a theory while equity theory is a large step forward in the development of a systematic theory of exchange, the formulation needs further specifica tion in several areas. An employee compares his or her jobs inputs with an outcomes ratio. Criticism of the equity theory of motivation since every organization has some structure, so it is not easy for the managers to have equity in the whole organization. The first level is physical needs, which are basic human needs, such as sunlight, oxygen, and food. The utility of equity theory in enhancing organizational effectiveness. Equity theory shows that ones perception is relative to their own reality. The higher an individuals perception of equity, the more motivated they will be. In the same way, well paid athletes feel they are not fairly compensated compared to their peers.
Finally, there would be summary and recommendations for future research. If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness. This paper describes a new construct, equity sensitivity, and proposes that reactions to. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Equity theory is based on the idea that individuals are motivated by fairness. 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. Equity theory of motivation examples explained hrf. The principal object of any system is equity or fairness. Martin university of mississippi in this article, we take a look at why and how managers should communicate with their employees the. Journal of management education leeds school of business. Equity theory, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. Hitt, vroom himself agreed with some of these criticisms and stated that he felt that the theory should be expanded to include research conducted since the original publication of his book. Under the equity theory, if an individual perceived himself to be underrewarded then he will be. 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.
A taxonomy of organizational justice theories jerald greenberg ohio state university a taxonomy is presented that categorizes theories of organizational justice with respect to two independent dimensions. There are some practical difficulties also in applying equity theory e. Every employee of an organisation expects that he should be treated with justice. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others. The equity theory of motivation deals with the way people. In the sections that follow, adams equity theory will be briefly summarized and the research. Although equity theory does not predict which mechanism will be selected, adams stated that the chosen behavior will be the one of maximum utility. While equity theory is a significant step forward, the. Archived from the original pdf on 23 september 2015. 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. Equity theory of motivation tries to address this problem of unequal.
For instance, gill and stone 2010 analyze how considerations of equity influence behavior in strategic settings in which people compete and develop the implications for optimal labor contracts. The equity theory of motivation how to keep your team. Expectancy theory vroom, 1964, like equity theory, is a cognitive process model of motivation based on the assumption that people are capa. The core of the equity theory is the principle of balance or equity. His dissertation, the functions of social conflict, took conflict theory in a new direction and was later named as one of the bestselling sociology books of the twenti. The core of equity is the principle of balance or equity. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation fair in their eyes. 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. To understand adams equity theory in full, we need to first define inputs and outputs. Equity theory proposes that individuals who perceive themselves as either underrewarded. Equity theory of motivation management study guide. In a chapter entitled on the origins of expectancy theory published in great minds in management by ken g. If managers will keep workplace equity, then it means that there will be no distinction among employees and everything will be same. Based on the maslows theory and equity theory, according to their characters, the questionnaire aim to find the limitation of these two theories, check whether the.
A very simplistic yet logical theory of workplace motivation was developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Free riders as a blind spot of equity theory brunel university. The relevance of scientific management and equity theory. The theory is also known as adams inequity theory of motivation. Conflict and critical theories 215 united states and arrived in new york in 1941. Inputs are what you bring to the situation, like your skills, time and education.