Considered one of the justice theories, equity theory was first developed in the 1960s by j. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. Its about the balance between the effort an employee puts into their work input, and the result they get in return output. Equity theory was first developed in 1963 by jane stacy adams. This paper concentrates on equity theory as it is conceived by adams 1963a, 1965. John stacey adams equity motivation theory allows you to put workplace psychology into action and increase your own or your teams motivation. Adams equity theory leadership skills training from. The equity formulas shown in figure 1 are simple adaptations of adams original formula. Equity theory, as developed by adams 1965, considers motivation and job satisfaction as the result of a comparison of a workers perceived. 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.
To validate the exchange, an individual compares his input and outcomes with those of others and try to rectify the inequality. An employee compares his or her jobs inputs with an outcomes ratio. If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness. Equity theory adams equity theory explains the thought process an employee uses to determine the fairness of management decision making. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others.
Perceptions of the measurability, importance and effects. Equity theory why employee perceptions about fairness matter. Adams equity theory adams 1963, 1965 focuses on the issue of fairness and equal treatment in organizations and the effects of perceptions of equities and inequities in inputs and outputs on specific workplace behaviour. Goal theory locke equity theoriy adams school leaders leadership is not position or a title, it is action and. Inputs include all the rich and diverse elements that employees believe they bring or contribute to the job. This paper studied how the equity theory applies to consumerretailer exchanges and effects consumer behavior. Why does the equity theory believe that the number of inputs must be equal to the number of outputs. According to adams, equity theory is based on the simple assumption that people want to be treated fairly. Adams equity theory, a powerful theory of motivation. Inputs can include abilities, effort, performance, age, seniority, education, and other attributes. Herzbergs twofactor theory of motivation is opposite to the equity theory of motivation in that employee attitude and workplace motivation are not correlated. Adams suggested that employees try to maintain a balance between what they give to an organisation against what they receive, and base satisfaction with their own balance. Examining equity theory across cultures 65 jamaica and hawaii to test the applicability to equity theory in various cultures, we decided to recruit men and women from two very different cultures. The utility of equity theory in enhancing organizational effectiveness article pdf available in european journal of economics, finance and administrative sciences march 2012 with 18,267 reads.
Concerned with the meaning that contemporary leftist social movements e. Adams equity theory is based on a ratio consisting of inputs to outcomes. Every employee of an organisation expects that he should be treated with justice. Equity theory, when applied to the workplace, focuses on an employees work compensation relationship and an employees attempt to reduce any perceived unfairness.
Equity theory is based in the idea that individuals are. The equity theory owes its origin to several prominent theorists. For a business owner or manager, this is a particularly important lesson to learn with regard to employees. Adams equity theory, also known as the equity theory of motivation, was developed in 1963 by john stacey adams, a workplace behavioral psychologist. In short, adams equity theory means that employees will become demotivated if. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Applying adams equity theory to employee engagement. Adams, equity theory is concerned with defining and measuring the relational satisfaction of employees. This handy quiz and worksheet combo will check your knowledge of the equity theory of motivation that was developed in 1963. Equity theory is one of the major formulations relevant to financial compensation. In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. Equity theory is based on the idea that individuals are motivated by fairness. According to the theory, employee motivation is the. Process theories of motivation equity theory business essay.
Adams equity theory how a manager can motivate their. 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. This theory is based on social comparisons and the notion that unequity is a motivating state. There is nothing wrong in this expectation by the employees. Alderfers erg theory herzbergs two factor theory mcclellands achievement need theory incentive theory esha conference, dubrovnik 2629 october 2014. John stacey adams is a workplace, social, and behavioral psychologist who came up with the equity theory of motivation in 1963. Equity theory will help hrd explain employees behavior and provide them with the possible factors that might decrease efficiency and performance. However, equity theory takes a less straightforward and more fluid approach than previous models. The core of equity theory says that individuals judge the fairness of.
Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. An attribute is only considered an input if it is perceived as relevant by the individual. 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. The theory suggests that individuals perceive fairness and unfairness in their environments and will perform accordingly. The adams equity theory was developed by the american psychologist john stacey adams in 1963. Introduction adamss equity theory presents the idea of motivation through fairness. Output can be things like salary, recognition, and responsibility. Jan 09, 2018 according to the theory, employee motivation is the result of the balance between what an employee attributes to the company against the recognition heshe receives as compared to what hisher coworkers receive for the same attribution. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs. First developed in the early 1960s by behavioural psychologist john s. Stacy adams focusing on social justice and the fairness of social exchange. The adams equity theory was proposed by john stacey adams, and is based on the following assumptions.
Mar 16, 2020 the behavioral psychologist, john stacey adams, developed a useful model for explaining why employee perceptions about fairness matters. The relevance of scientific management and equity theory in. The theory was first conceived by john adams in 1963, and it works well with organizational behavior because of its focus on the perceptions of the individual. The subjective value of a bargain gets support from social equity theory adams,1965. The utility of equity theory in enhancing organizational effectiveness article pdf available in european journal of economics, finance and administrative sciences. Equity theory based strategies for students on overcoming. Stacy adams, a workplace and behavioral psychologist, who. Individuals make contributions inputs for which they expect certain rewards outcomes. The dynamics of proactivity at work wharton faculty platform. To further illustrate equity theory considerations, a. Equity theory of motivation examples explained hrf. 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 boundary conditions for learning and performance goal orientation of salespeople revisited. Equity theory was developed in the early 1960s by j.
Equity, or more precisely, inequity is a major concern of industry. Stacy adams statement of equity theory, in dividuals seek to maximize equity in relationships rather than to maximize raw outcomes. According to equity theory, it is the perception of equitability and inequitability. The theory proposes that the employee evaluates the outcomes from the job i. The utility of equity theory in enhancing organizational. 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. This paper proposes equity theory as a guiding aid in ph. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. No matter what avenue of life is in question, fair treatment is something that everyone appreciates and demands. The equity theory of motivation how to keep your team. Looking back over our series, adams equity theory ties in closely with those of maslow and herzberg. Equity theory adams, 1963, 1965 focused on the role of employees perceptions of fairness in driving and explaining motivated behavior. The equity theory of motivation describes the relationship between the employees perception of how fairly is he being treated and how hard he is motivated to work.
The equity theory of motivation how to keep your team motivated. John stacey adamss equity theory has been a part of classical management literature since 1963. The principal object of any system is equity or fairness. The relevance of scientific management and equity theory. The key to equity theory is the ratio of inputs to outcomes.
Equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. And equity theory effectively looked at an employee population to try and determine how far it was important for employees to feel equally treated. Theories of motivation process theories expectancy theory vroom goal theory locke equity theoriy adams. Equity theory has received more attention lately from human resource professionals especially regarding the fairness of outcomes.
The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. It says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequalities. 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. Adams equity theory builds on maslows hierarchy of needs and herzbergs two factor theory, and was first presented in 1963. The core premise of equity theory is that employees make comparative judgments to evaluate the fairness of the rewards and compensation that they receive from managers, and. Equity theory adams 1963 hypothesized that in social exchange between two agents the ratio of the perceived value of the inputs to the. Adams asserted that when people feel distress from inequity they may react in one or all of the following ways. 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. 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. Hawaii in the united states and jamaica in the west indies. Strengths and weaknesses of adams equity theory free essays. And that meant leading to an expectation as part of this theory that an employee would feel motivated if they were known to be doing a similar type of. Stacey adams formulation of the theory which is most highly developed and researched statement on the topic. First, they may restrict their inputs to a level they believe is consistent with the outcomes they receive.
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. When applied to place of employment, equity theory can be seen as a way that an employee attempts to minimize any and all sense of unfairness that may arise. In other words, an employee gets demotivated by the job and his employer in case his. The role of performanceapproach and performanceavoidance orientations are that the study has been done only in the. The book is enriched with many empirical analyses and provides a comprehensive analysis of equity ranging from concepts.
Read this article to learn about the equity theory of motivation and its evaluation. Another theory relevant to the goals of this study is equity theory, which asserts that workers are motivated by a desire to be treated fairly, which is measured by the ratio of their inputs and outcomes adams, 1965. Equity theories have been proposed by adams 1963a, 1965, homans 1961, jacques 1961, and patchen 1961. Adams equity theory how a manager can motivate their team. The higher an individuals perception of equity, the more motivated they will be. 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. Equity theory the motivation theories highlighted in the case which are equity theory and vrooms expectancy theory.