Equity Theory on Job Motivation

The equity theory is a theory of motivation that was developed by psychologist John Stacey Adams in 1962. He emphasized that it is important in determining that motivation is relative, rather than absolute. The equity theory deals with one's own perceptions and not any objective indicator.

Equity Theory

According to Gareth R. Jones and Jennifer M. George's book, "Contemporary Management," the equity theory is defined as "a theory of motivation that focuses on people's perceptions of the fairness of their work outcomes relative to their work outputs". The equity theory focuses on an individual's perceived relationships between outcomes they receive from their organization and the inputs that are contributed. The theory maintains a relativistic approach and that each individual's outlook can be different. The individual compares his own outcome-input ratio with a referent's outcome-input ratio. A referent could be another person, a group of people similar to oneself, oneself in a previous job, or one's own expectation of what the outcome-input should be.

Equity

Jones and George define equity as "the justice, impartiality, and fairness to which all organizational members are entitled". This is applied in the workplace when "an individual perceives his or her own outcome-input ratio to be equal to a referent's outcome-input ratio". An example of the equity would be an employee perceives that she contributes inputs, such as time and effort, and receives proportionally more outcomes, such as a higher salary and choice of job assignments, than a referent.

Inequity

Inequity occurs when fairness is lacking. The feeling of inequity is creating pressure or tension inside people which therefore motivates them to restore equity by bringing the two ratios back into balance.

Underpayment Inequity

Jones and George define underpayment inequity as "the inequity that exists when a person perceives that his or her own outcome-input ratio is less than the ratio of a referent". For example, if you're at a job and are being paid below a colleague who is working equally or below your level, then you may be experiencing underpayment inequity. When people are experiencing underpayment inequity, they may experience a lack of motivation and lower inputs by reducing their working hours, such as lowering their efforts.

Overpayment Inequity

Jones and George define overpayment inequity as "the inequity that exists when a person perceives that his or her own outcome-input ratio is greater than the ratio of a referent". For example, if you're at a job and are being paid above a colleague who is working equal or above your level, then you may be experiencing overpayment inequity. When people are experiencing overpayment inequity, they may restore equity by changing their perceptions. They may realize or believe that they are working harder than the other employee who in actuality is putting in the same input.

References

• Contemporary Management; Gareth R. Jones and Jennifer M. George; 2008

Resources

• Mind Tools: Adams' Equity Theory- Balancing Employee Inputs and Outputs