Typical inputs might include enthusiasm, experience, hours put in, a sense of loyalty, taking initiative. Inputs area the thing someone does to receive a certain output.Managers who truly want to understand equity theory, and how it can apply to what they do, need to go a little deeper into an explanation of human motivation and perceptions of equity.Īdams introduced two key concepts for assessing this perception: Inputs and Outputs. In short, Adams’s equity theory is this: the lower the perceived equity, the lower the motivation the higher the perceived equity, the higher the motivation. He is motivated to stay at the top of his game. To the employee, this slacking off establishes equity between him and his co-worker and is “fair.”Īt the other end of this spectrum, according to Adams, is the employee who perceives a high level of fairness (equity) in his work environment. His response may be to become less productive himself because he has lost motivation to perform at the top of his game. If, for example, an employee sees another employee doing the same job yet getting paid more, he has a sense of unfairness. People’s motivation at work and how they behave is based on how they perceive the justice (or lack thereof) in their individual situation. The key focus of equity theory is to discern how under-reward or over-reward at the workplace correlates with employee motivation.Īccording to Adams, among the many factors in employee motivation is the perception of fairness. But according to John Stacey Adams, a behavioral psychologist who focused on studying workplace motivation in the 60s, there is a key factor in motivation that many do not consider – he calls is the Equity Theory of Motivation.Īnd it is something that all managers should understand if they intend to keep all employees motivated. We may be motivated by some external factors – praise from others, our paycheck, etc., and we may be motivated by internal factors – personal satisfaction for a job well done, the desire to perform well, even without recognition, etc. And there are quite a few motivators forcing us to get out of bed and head to the office every workday. One might feel that his or her compensation is equitable to other employee’s but one might view the entire compensation system as unfair.As adults, we all need to go to work.People might perceive equity/inequity not only in terms of the specific inputs and outcomes of a relationship, but also in terms of the overarching system that determines those inputs and outputs.
Number of demographic and psychological variables affect people’s perceptions of fairness and interactions with others.(Eg., While telling me about my raise my supervisor was very nice and complimentary.) Perceived degree to which an individual is treated with dignity, concern, and respect. (Eg., I was given a raise with the explanation of why I was given.) Perceived fairness of the process used to determine the distribution of rewards. Perceived fairness of the amount and allocation of rewards among individuals. (Eg., I think this is a fair place to work.) Given payment by quantity of production, under rewarded employees will produce a large number of low quality units in comparison with equitably paid employees.Īn overall perception of what is fair in the workplace.Given payment by time, under rewarded employees will produce less or poorer quality of output.Given payment by quantity of production, over rewarded employees will produce fewer, but higher-quality units than will equitably paid employees.Given payment by time, over rewarded employees will produce more than will equitably paid employees.The theory establishes the following propositions relating to inequitable pay: When employees perceive inequity, they can be predicted to make one of the following choices: The structure of equity in the workplace is based on the ratio of inputs to outcomes. OTHER OUTSIDE :- Another individual or group of individuals outside the employee’s organisation.OTHER INSIDE :- Another individual or group of individuals inside the employee’s organisation.SELF OUTSIDE :- An employee’s experiences in a situation or position outside the employee’s current organisation.SELF INSIDE :- An employee’s experiences in a different position inside the employee’s current organisation.Referent comparisons are categorised under: If someone perceives an unfair environment, they will be demotivated.The higher an individual’s perception of equity, the more motivated they will be.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.
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