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. In the sections that follow, adams equity theory will be briefly summarized. Free riders as a blind spot of equity theory 241 assessing the predictiveness of equity theory in evoking the concept of the relative outcometoinput ratio, cet sketches the psychological computational processes that members must experience in order to judge the fairness of their exchange relationship with their organization. Stacy adams, a workplace and behavioral psychologist, who. As per this motivation theory, an individuals motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Equity theory definition, meaning, examples, advantages. It was published in the journal, experimental social psychology, 1965, new york titles inequality in social exchange. The purpose of this exchange is to maximize benefits and minimize costs. Definitions of social equity can vary but all focus on the ideals of justice and fairness. It the ratio is not equal, then emotional responses will occur that will result in the restoration of equity by itself.
Vroom realized that an employees performance is based on individual factors such as personality, skills, knowledge, experience and abilities. The case for promoting equity in developing countries 19 4. According to stephan robbins expectancy theory is a theory that says that the strength of a tendency. Equitable care aims to provide the entire population with safe, efficient, reliable, and quality nursing services at all levels of health. 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 article pdf available in european journal of economics, finance and administrative sciences.
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 is based on the idea that individuals are motivated by fairness. Her company makes custom furniture by hand and sells it through the internet and a small companyowned retail store. According to this theory, developed by sociologist george homans, people weigh the potential benefits and risks of social relationships. The performance effects predicted by equity theory for overpayment and underpayment in a piecerate compensation scheme will be replicated i. The adams equity theory was developed by the american psychologist john stacey adams in 1963.
Equity theory is used in parlance of human resource management. Finally, summary and recommendations for future research will follow. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Considered one of the justice theories, equity theory was first developed in the 1960s by j. Equity represents a claim on the companys assets and earnings. Adams equity theory leadership skills training from. Vroom expectancy motivation theory employee motivation.
Equity theory of motivation equity theory was developed by james stacy adam. Plain and simple, equity is a share in the ownership of a company. The research question is to explore the effect pay outcome has on. This theory shows that you become more motivated when your perceived fairness is high and demotivated when you perceive unfairness. The concept of social equity can be traced back to the works of aristotle and plato. Examples include gender, socioeconomic status, or ethnic origin. 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. Pdf the utility of equity theory in enhancing organizational. Companies can create brand equity for their products.
The listening passage gives examples of equity theory. Unlike social exchange theory that argues how people try to maximise rewards and minimise costs in relationships, equity theory suggests that partners are concerned about fairness in relationships. Equity is a sense of fairness in the exchange of goods, services, time, and effort. If an imaginary employee, x, has the same job title, does the same work, has the same office and gets the same salary as other workers, he is happy. Equity theory and its effect on performance outcome ijser.
Equity theory is a concept in industrialorganizational psychology that focuses on an individuals perceptions of how equitably they are being treated in their work. Higher is individuals perception of fairness, greater is the motivation level and vice versa. 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. Equity theory definition first developed in the early 1960s by behavioural psychologist john s. Equity theory and performance applied social psychology. In this paper the focus will be on the expectancy theory of motivation which was propounded by victor vroom. According to adams 1965 the focus of the theory is on the. Whether you say shares, equity, it all means the same thing. The theory helps explain why your employees motivation levels can go up and down at work. Output can be things like salary, recognition, and responsibility. Equity theory of motivation examples explained hrf. The equity theory of motivation describes the relationship between the employees perception of how fairly is he being treated and how hard he is motivated to work. The theory is also known as adams inequity theory of motivation. 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.
It is a cognitivecentered theory as it is basically concerned with the person himself, his. Adams equity theory, a powerful theory of motivation. 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. Equity forchildrenjune20 3of7 john rawls a theory of justice 1971 underlies the principle approach to alleviating inequity by targeting the most disadvantaged. 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. Social exchange theory in psychology verywell mind. But, in reality, the concept of fairness is not appreciated by all. Abstract this study examines the concept of equity theory, its intention, and core. Applying adams equity theory to employee engagement. Equity theory, when applied to the workplace, focuses on an employees work compensation relationship and an employees attempt to reduce any perceived unfairness. Equity theory, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. It ensures a basic minimum standard of education for all.
A closer look at the concept of equity theory may point us in the direction of an explanation of how an employees perception, affects their behavior in work organizations. As you acquire more equity, your ownership stake in the company becomes greater. In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. Equity theory and its applications in the various spheres. Its about the balance between the effort an employee puts into their work input, and the result they get in return output. As an example of equity theory, if an employee learns that a peer doing. There are some practical difficulties also in applying equity theory e. Equity theory proposes that a persons motivation is based on what he or she. In this lesson, youll learn the fundamental principles of john stacey adams equity theory and understand how it can affect the workplace. Fairness is achieved when people feel they get approximately what they deserve from relationships. The utility of equity theory in enhancing organizational. The equity theory of motivation states a persons motivation is directly related to their perception of equity or level of fairness.
In other words, an employee gets demotivated by the job and his employer in case his. Brand equity refers to a value premium that a company generates from a product with a recognizable name, when compared to a generic equivalent. Adams, equity theory is concerned with defining and. The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. Looking back over our series, adams equity theory ties in closely with those of maslow and herzberg. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. Equity theory posits that when it comes to relationships, two concerns stand out. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs. This implies taking into account historical and current. Equity predictions are more likely to apply to people who are morally mature. It can be represented with the accounting equation. An employee compares his or her jobs inputs with an outcomes ratio. Relationship partners will try to balance their own costbenefit ratios to avoid getting a raw deal in the relationship as well as to avoid shortchanging.
As weve talked about many times here at brighthr, your business needs motivated staff. Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. To explain what is meant by justice organizations, colquitt, greenberg and zapata. Equity theory proposes that individuals who perceive themselves as. The core of the equity theory is the principle of balance or equity. Equity theory is a study of human perception in terms of proportionate equivalence of the ratio of one persons inputs to the results to those of others around him, ceteris paribus. Equity theory states that humans have a natural tendency to maintain equity in their social relationships. Equity theory proposes that a persons motivation is based on what he or she considers to be fair when compared to others redmond, 2010. Equity theory is a concept where people want the ratio of their outcomes to be nearly equivalent to the ratio of a referent person or a group.
Phelan 2005, explained through four main waves that determine the. According to equity theory, it is the perception of equitability and inequitability. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. If other workers have the same job title but do less work and get paid more than x, x will not be happy.
The equity theory of motivation how to keep your team. Amartya sens the idea of justice and the capability approach support the focus of poverty alleviation on the specific and individualized needs of the disadvantaged. Social exchange theory proposes that social behavior is the result of an exchange process. Perception is a relative term and differs from person to person. However, equity theory takes a less straightforward and more fluid approach than previous models. Equity in old societies involves the role of public administrators, who are responsible for ensuring that social services are delivered equitably. It means making sure that personal and social circumstances are not obstacles to achieving educational potential. Equity in providing care is also a major value in the nursing profession.
Inputs include all the rich and diverse elements that employees believe they bring or contribute to the job. Equity theory helps explain how highly paid union workers can go on. Equity theory of motivation management study guide. However, results in this area are not entirely consistent, and do not tie in readily with work on attributions of responsibility. Generally speaking, equity is the value of an asset less the amount of all liabilities on that asset. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others. The central theme of the theory is the judgment of fair treatment. Equity theory and its applications in the various spheres of life. Finally, there would be summary and recommendations for future research. Vrooms expectancy theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and to minimize pain.
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