Pdf the utility of equity theory in enhancing organizational. Adams equity theory, a powerful theory of motivation. Equity theory of motivation equity theory was developed by james stacy adam. It is a cognitivecentered theory as it is basically concerned with the person himself, his. Once comparison with a particular other has stablized over time, person will be highly resistant to changing comparison persons. 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 project gutenberg selfpublishing ebooks. Equity theory helps explain how highly paid union workers can go on strike when no one else seems to understand why. Under the equity theory, if an individual perceived himself to be underrewarded then he will be. Equity theory adams, 1963, 1965 draws from exchange, dissonance. 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. A very simplistic yet logical theory of workplace motivation was developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Archived from the original pdf on 23 september 2015.
The adams equity theory was developed by the american psychologist john stacey adams in 1963. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Considered one of the justice theories, equity theory was first developed in the 1960s by j. A critique will follow to determine the falsibility and utility of the theory. Equity theory is one of the major formulations relevant to financial compensation. There is nothing wrong in this expectation by the employees. To understand adams equity theory in full, we need to first define inputs and outputs. The relevance of scientific management and equity theory in everyday managerial communication situations reginald l. The core of equity is the principle of balance or equity. Equity theory of motivation tries to address this problem of unequal. If youre interested in equity theory, you may want to read the following. Process theories of motivation equity theory business essay. The higher an individuals perception of equity, the more motivated they will be. 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.
In other words, an employee gets demotivated by the job and his employer in case his. 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. 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. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. 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. Finally, there would be summary and recommendations for future research.
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. He devised a hierarchy of human needs divided into five levels. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. Equity theory is used in parlance of human resource management. 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. 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. Martin university of mississippi in this article, we take a look at why and how managers should communicate with their employees the.
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. Inputs are what you bring to the situation, like your skills, time and education. Higher is individuals perception of fairness, greater is. This theory is based on social comparisons and the notion that unequity is a motivating state. Expectancy theory vroom, 1964, like equity theory, is a cognitive process model of motivation based on the assumption that people are capa. Harder 1991 pointed out a major distinction between the expectancy theory and the equity theory. Equity theory of motivation management study guide. Equity theory, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. Equity predictions are more likely to apply to people who are morally mature. Extrapolating from this, adams equity theory tells us that the higher an individuals perception of equity fairness, then the more motivated they will be.
In a chapter entitled on the origins of expectancy theory published in great minds in management by ken g. Criticism has been directed toward both the assumptions and practical application of equity. Applying adams equity theory to employee engagement. Equity theory of work motivation is based on the social exchange process. Equity theory proposes that individuals who perceive themselves as either underrewarded. According to equity theory, it is the perception of equitability and inequitability. An employee compares his or her jobs inputs with an outcomes ratio. 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. Outputs are everything you get in return, like your salary, bonuses, raises and promotions.
The relevance of scientific management and equity theory. Get the complete knowledge about equity theory of motivation from myassignmenthelp experts. The central theme of the theory is the judgment of fair treatment. The first level is physical needs, which are basic human needs, such as sunlight, oxygen, and food. In the same way, well paid athletes feel they are not fairly compensated compared to their peers. Equity theory is based on the idea that individuals are motivated by fairness. 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. 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.
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. 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. There are some practical difficulties also in applying equity theory e. 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 proposes that a persons motivation is based on what he or she considers to be fair when compared to others redmond, 2010. 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. Over the period leading up to the economic crisis, western liberal democracies adopted market based economic policies that allowed disparities between the income and. This paper describes a new construct, equity sensitivity, and proposes that reactions to. Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. But, in reality, the concept of fairness is not appreciated by all.
This article explains the adams equity theory, developed by john stacey adams in a practical way. Conflict and critical theories 215 united states and arrived in new york in 1941. Equity theory of motivation examples explained hrf. The research supports equity predictions in the area of underpayment, but the overpayment effects have not been satisfactorily demonstrated. Equity theory focuses on determining whether the distribution of resources is fair to both. The equity theory of motivation how to keep your team. Maslows theory of needs is the most widely known motivational theory, proposed by abraham maslow in 1970. In this paper the focus will be on the expectancy theory of motivation which was propounded by victor vroom. Looking back over our series, adams equity theory ties in closely with those of maslow and herzberg. If the employee perceives inequality, he or she he will act to correct the inequity. 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. However, equity theory takes a less straightforward and more fluid approach than previous models.
Every employee of an organisation expects that he should be treated with justice. According to stephan robbins expectancy theory is a theory that says that the strength of a tendency. 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. Stacy adams, a workplace and behavioral psychologist, who. Everyone takes up a job as they are motivated by some factor or the other. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. Most criticisms on equity theory concern the artificial laboratory conditions in. A critique of equity theory and its major constructs will be examined. The equity theory of motivation deals with the way people.
Journal of management education leeds school of business. Equity theory, as developed by adams 1965, considers motivation and job. It was published in the journal, experimental social psychology, 1965, new york titles inequality in social exchange. In the sections that follow, adams equity theory will be briefly summarized and the research. While equity theory is a significant step forward, the. 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. Conversely, an individual will be demotivated if they perceive unfairness.
Finally, summary and recommendations for future research will follow. 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 core of the equity theory is the principle of balance or equity. Equity theory, when applied to the workplace, focuses on an employees work compensation relationship and an employees attempt to reduce any perceived unfairness. The principal object of any system is equity or fairness. Equity theory, as developed by adams 1965, considers motivation and job satisfaction as the result of a comparison of a workers perceived. In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. The equity theory of motivation employee motivation.
Behavioral economics has recently started to apply game theory to the study of equity theory. The utility of equity theory in enhancing organizational. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others. If managers will keep workplace equity, then it means that there will be no distinction among employees and everything will be same. Frameworks for equity helen hodgson in the wake of the global economic crisis of 200809 public concern has focused on inequities within society. Free riders as a blind spot of equity theory brunel university. Adams equity theory leadership skills training from. 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. It says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequalities.
Equity theory was first developed in 1963 by jane stacy adams. It is a cognitivecentered theory as it is basically concerned with the person himself, his beliefs, feelings or perceptions. The theory proposes that the employee evaluates the outcomes from the job i. The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. The utility of equity theory in enhancing organizational effectiveness.
Although equity theory does not predict which mechanism will be selected, adams stated that the chosen behavior will be the one of maximum utility. 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. As per this motivation theory, an individuals motivation level is correlated to his perception of equity, fairness and justice practiced by the management. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. According to this theory of motivation, an individuals motivation level is connected with his perception of equity, fairness and justice practised by management.
The theory is also known as adams inequity theory of motivation. The utility of equity theory in enhancing organizational effectiveness article pdf available in european journal of economics, finance and administrative sciences. 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 is frequently identified as a vital theory for understanding employee motivation. 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.