Equity Theory of motivation

INTRODUCTION

  • Equity theory was first developed in 1963 by Jane Stacy Adams.
  • It says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequalities.
  • The higher an individual’s perception of equity, the more motivated they will be.
  • If someone perceives an unfair environment, they will be demotivated.

INPUTS

  • Time
  • Effort
  • Loyalty
  • Hard Work
  • Commitment
  • Ability
  • Adaptability
  • Flexibility
  • Tolerance
  • Determination
  • Enthusiasm
  • Personal sacrifice
  • Trust in superiors
  • Support from co-workers and colleagues
  • Skill

OUTCOMES

  • Job security
  • Salary
  • Employee benefit
  • Expenses
  • Recognition
  • Reputation
  • Responsibility
  • Sense of achievement
  • Praise

Adam’s EQUITY THEORY diagram

Comparisons are made to:

Referent comparisons are categorised under:

  • SELF INSIDE :- An employee’s experiences in a different position inside the employee’s current organisation.
  • SELF OUTSIDE :- An employee’s experiences in a situation or position outside the employee’s current organisation.
  • OTHER INSIDE :- Another individual or group of individuals inside the employee’s organisation.
  • OTHER OUTSIDE :- Another individual or group of individuals outside the employee’s organisation.

The structure of equity in the workplace is based on the ratio of inputs to outcomes.

When employees perceive inequity, they can be predicted to make one of the following choices:

  1. Change their inputs
  2. Change their outcomes
  3. Distort perceptions of self
  4. Distort perceptions of others
  5. Choose a different referent
  6. Leave the field

The theory establishes the following propositions relating to inequitable pay:

  • Given payment by time, over rewarded employees will produce more than will equitably paid employees.
  • 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, under rewarded employees will produce less or poorer quality of output.
  • Given payment by quantity of production, under rewarded employees will produce a large number of low quality units in comparison with equitably paid employees.

Equity Theory Focused on:

ORGANISATIONAL JUSTICE

An overall perception of what is fair in the workplace. (Eg., I think this is a fair place to work.)

DISTRIBUTIVE JUSTICE –

Perceived fairness of the amount and allocation of rewards among individuals. (Eg., I got the pay raise I deserve.)

PROCEDURAL JUSTICE

Perceived fairness of the process used to determine the distribution of rewards. (Eg., I was given a raise with the explanation of why I was given.)

INTERACTIONAL JUSTICE

Perceived degree to which an individual is treated with dignity, concern, and respect. (Eg., While telling me about my raise my supervisor was very nice and complimentary.)

Assumptions:

Criticism:

  • Number of demographic and psychological variables affect people’s perceptions of fairness and interactions with others.
  • 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.
  • One might feel that his or her compensation is equitable to other employee’s but one might view the entire compensation system as unfair.