Equity theory
Equity theory, developed by J. Stacey Adams in 1963, is a psychological framework that examines motivation through the lens of fairness in the workplace. It posits that employees strive for a balance between what they contribute to their jobs (inputs) and what they receive in return (outputs). Perceptions of fairness play a critical role in this theory, as individuals assess their own inputs—such as time, effort, and loyalty—against the outputs they receive, including pay, recognition, and benefits.
When employees perceive an imbalance in this exchange, it can lead to feelings of dissonance, which may negatively impact their motivation and job satisfaction. This perceived inequity can manifest in several ways, prompting workers to alter their input levels, seek changes in compensation, or even reconsider their role within the organization. Different forms of equity comparisons exist, including job equity and market equity, which help individuals gauge fairness relative to their peers.
Ultimately, equity theory emphasizes the importance of perceived fairness in maintaining employee motivation and organizational effectiveness, as feelings of inequity can result in disengagement and loss of talent. Understanding this dynamic can help organizations foster a more equitable environment, potentially enhancing overall employee satisfaction and productivity.
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Equity theory
Equity theory is a theory of motivation defined by the researcher J. Stacey Adams in 1963. Adams was a behavioral psychologist with a research focus on job motivation. In equity theory, Adams postulated that workers seek a fair balance between what is put into the job (inputs) and what is received in exchange for work completed (outputs). The theory is thus predicated on the worker’s perception of fairness and balance as they strive to ensure that the rewards are equitable in comparison with the inputs of other workers.
Overview
The notion of equity refers to a psychological state where workers may experience dissonance in the perceived fairness in an organization. The model holds that workers' behavior is negatively impacted when they perceive that compensation (outputs) received for a job is inconsistent with the benefits that may accrue to another individual for identical inputs.
There are numerous types of comparisons of equity in a workplace environment, including job equity, company equity, occupational or market equity, and cohort equity. Equity is ascertained when individuals compare their contributions and rewards with the contributions and rewards of others. In attempting to balance the differentiation between their value and the distribution of rewards to other individuals in the organization, a disequilibrium may occur that results in worker disaffection.
To rectify this problem, workers may opt to leave the organization, reduce performance, seek an increase in pay, redistribute the work of others, or rationalize their contribution and rewards in congruence with the perceptions of inequity. Workers are motivated either positively or negatively by their own perceptions of fairness in comparison with others, with equity often referred to as an exchange relationship. The perception of inequity contributes to a state of dissonance that may ultimately affect motivation and job satisfaction. When a worker experiences dissonance with respect to equity, an attempt occurs to balance the worker’s inputs with outputs. As these scales become more distorted, a state of inequity occurs, resulting in increased stress. Job motivation decreases and the worker rationalizes their contribution as compared to others in a same or similar job.
The inputs associated with equity theory are loyalty, time, effort, ability, integrity, commitment, reliability, heart and soul, and personal sacrifice. The outputs associated with equity theory are pay, bonuses, perks, benefits, security, recognition, interest, development, reputation, praise, enjoyment, and responsibility. In an attempt to resolve any perceived inequity, workers may choose behavioral options such as reducing or changing inputs, changing outcomes to match their inputs, withdrawal, or persuading others to change their inputs. All of the behavioral options may be incorporated in cognitive decisions regarding the level of their inputs, the reward received for work completed, and a conscious decision to change the nature of their comparison with other workers. The impact of inequity in the workplace contributes to a systematic loss of human capital with implications for growth across all organizational settings.
Bibliography
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