Equity theory states that employees need a sense of equity in the workplace in order to maintain psychological balance. Its about the balance between the effort an employee puts into their work input, and the result they get in return output. 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. The theory helps explain why your employees motivation levels can go up and down at work. The major components of exchange relationships in adams theory are inputs and outcomes. Equity theory attempts to explain relational satisfaction in terms of perceptions of fairunfair distributions of resources within interpersonal relationships.
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. The equity theory of relationships is based on a theory developed by workplace and behavioral psychologist john stacey adams. Equity theory and its applications in the various spheres. People in inequitable relationships will attempt to reduce their distress via a variety of techniques. First developed in the early 1960s by behavioural psychologist john s. The dictionary meaning of the word equity is the quality of being fair and impartial.
And equity theory effectively looked at an employee population to try and determine how far it was important for employees to feel equally treated. The equity theory owes its origin to several prominent theorists. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others. Equity theory was developed in the early 1960s by j. Adams equity theory how a manager can motivate their team. Looking back over our series, adams equity theory ties in closely with those of maslow and herzberg. It is this concept of fair treatment which is the basis for adams equity theory. It explains why a promotion or raise rarely has the desired effect. The journal of abnormal and social psychology, 675, pp. Adams equity theory equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace. John stacey adams is a workplace, social, and behavioral psychologist who came up with the equity theory of motivation in 1963.
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. Adams equity theory, also known as the equity theory of motivation, was developed in 1963 by john stacey adams, a workplace behavioral psychologist. Adams equity motivation theory business management articles by. Adams equity theory is based on a ratio consisting of inputs to outcomes. Adam equity theory sociology bibliographies cite this. 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. John stacey adams suggests that the higher an individuals perception of equity, the more motivated they will be and.
John stacey adams equity motivation theory allows you to put workplace psychology into action and increase your own or your teams motivation. It explores the perceptions of humans regarding their inputs in the relationship and the outcomes they get. The theory is also known as adams inequity theory of motivation. According to adams, equity theory is based on the simple assumption that people want to be treated fairly. 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. Applying adams equity theory to employee engagement. Adams equity theory, a powerful theory of motivation. The adams equity theory was proposed by john stacey adams, and is based on the following assumptions. Pdf this paper will focus on examining equity theory. Adams 1965 defines inequity as inequity exists for person whenever he perceives. 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. Stacy adams, a workplace and behavioral psychologist, who asserted that.
Equity theory is considered as one of the justice theories. An attribute is only considered an input if it is perceived as relevant by the individual. People compare their exchanges with their employer to exchanges with othersinsiders and outsiders called referents. An employee compares his or her jobs inputs with an outcomes ratio.
The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. 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. Considered one of the justice theories, equity theory was first developed in the 1960s by j. 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. Equity theory of motivation examples explained hrf.
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. Stacey adams, which claims that employees will be motivated if they believe that they are fairly treated in the workplace. The theory proposes that employees form an estimate of how the total benefits they receive from a job pay, status, interest compare with their total input effort, skill, experience. To validate the exchange, an individual compares his input and outcomes with those of others and try to rectify the inequality.
Jan 09, 2018 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. Equity theory proposes that individuals estimate the ratio of what has been contributed i. Equity theory adams, 1963, 1965 draws from exchange, dissonance, and social comparison theories in making predictions about how indi viduals manage their. As weve talked about many times here at brighthr, your business needs motivated staff to operate at its full capacity. Equity theory attempts to explain relational satisfaction in terms of perceived fairness. This supports adams equity theory that people tend to us e a number of various referents simultaneously. Equity theory and performance applied social psychology. The adams equity theory shows why salary and benefits alone dont determine an employees motivation. But adams equity theory is a far more complex and sophisticated motivational model than merely assessing effort inputs and reward outputs. According to the theory, employee motivation is the result of the balance between what an. Inputs can include abilities, effort, performance, age, seniority, education, and other attributes.
Equity theory and performance applied social psychology asp. Equity theory adams, 1963 1 equity theory adams, 1963 people develop beliefs about what is a fair reward for one job contribution an exchange. The construct is delineated through a series of propositions, and implications for equity research in organizations are discussed. Equity theory is based in the idea that individuals are motivated by fairness. It was published in the journal, experimental social psychology, 1965, new york titles inequality in social exchange. Stacey adams formulation of the theory which is most highly developed and researched statement on the topic. The equity theory of motivation how to keep your team. Equity theory adds a crucial additional perspective of comparison with referent others people we consider in a similar situation.
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. The paper draws a conclusion that the effect of salary transparency on staffs sense of fairness will vary with enterprise actual situation and then it discusses the key factors. 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. The adams equity theory was developed by the american psychologist john stacey adams in 1963. Adams 1965 defines inequity as inequity exists for person whenever he perceives that the ratio of his outcomes to inputs and the ratio of others outcomes to. In short, adams equity theory means that employees will become demotivated if their perceived input is greater than the output from the company. For a business owner or manager, this is a particularly important lesson to learn with regard to employees. Adams equity theory calls for a fair balance to be struck between an employees inputs hard work, skill level, tolerance, enthusiasm, and so on and an employees outputs salary, benefits. The equity formulas shown in figure 1 are simple adaptations of adams original formula. Equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Herzbergs twofactor theory of motivation is opposite to the equity theory of motivation in that employee attitude and workplace motivation are not correlated. While this theory was developed more than 50 years ago, it remains very much relevant today. According to this theory of motivation, an individuals motivation level is connected with his perception of equity, fairness and justice practised by management. The utility of equity theory in enhancing organizational.
That is, equity theory is based on inequity from the employees perspective, and in many cases, the inequity is not real. 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 and its applications in the various spheres of. Adams equity theory how fairness affects employee motivation. 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. 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. 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 focuses on determining whether the distribution of resources is fair to both relational partners.
Equity theory, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. Equity theory of motivation tries to address this problem of unequal treatment among employees in a company and its effect on the overall motivation of the employees because slight unequal treatment is present everywhere but when this unequal treatment becomes excessive than it hampers the motivation of the employees in a negative way which can. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. What is equity theory and why should i be applying it. Regarded as one of many theories of justice, equity theory was first developed in 1963 by john stacey adams. Adams equity theory, a powerful theory of motivation toolshero. In equity theory, motivation is affected by the individual perception of being treated fairly in comparison to others. Stacey adams equity theory employee motivation theories. Every business owner or manager should have a clear understanding of the equity theory and how it can help to create a business structure which encourages employees to. 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 short, adams equity theory means that employees will become demotivated if. The adams equity theory model, therefore, extends beyond the individual self and incorporates influence and comparison of other peoples situations for example, colleagues and friends in forming a comparative view and awareness of equity, which commonly manifests as a sense of what is fair.
If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. 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. The equity theory of motivation how to keep your team motivated. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. John adams put forward his theory on motivation in 1963 which extends beyond. If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness. The utility of equity theory in enhancing organizational effectiveness. Stacy adams focusing on social justice and the fairness of social exchange. 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. No matter what avenue of life is in question, fair treatment is something that everyone appreciates and demands.
A cognitive theory of motivation, based on the work of j. The equity theory of motivation employee motivation. When that sense of equity is lacking, dissonance arises within the employee. Equity theory proposes that a persons motivation is based on what. Adams equity theory leadership skills training from. Equity theory is based on the idea that individuals are motivated by fairness. Equity theory is used in parlance of human resource management. Therefore, equity theory will be helpful to management in perceiving what motivates employees berkowitz, 1965.
Pdf the utility of equity theory in enhancing organizational. Nov 20, 2018 the adams equity theory was developed by the american psychologist john stacey adams in 1963. Underpayment inequity in comparison to a series of referents others in your. Ppt equity theory adams, 1963 powerpoint presentation. However, equity theory takes a less straightforward and more fluid approach than previous models. Individuals make contributions inputs for which they expect certain rewards outcomes. It can even undermine the motivation of other employees. 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. Based on the view of equity theory, this article divides salary transparency into four conditions through two arrangementsresult equity and process equity. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs. Equity theory in some sense is related to motivationhygiene theory, in that it considers both demotivators and motivators.
The core of equity is the principle of balance or equity. Adams, equity theory is concerned with defining and measuring the relational satisfaction of employees. Employees place great importance on being treated fairly and equally. Adams equity theory builds on maslows hierarchy of needs and herzbergs two factor theory, and was first presented in 1963.
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