The theory developed in 1963 by john stacey adams says if an employee finds hisher balance between what they put in and what they get in return for their work it would make them motivated and help develop a more productive relationship with the management. Equity theory international journal of business and social science. The core of the equity theory is the principle of balance or equity. If youre interested in equity theory, you may want to read the following. We as managers typically evaluate their employees, calibrate ratings.
Outputs are everything you get in return, like your salary, bonuses, raises and promotions. It is a cognitivecentered theory as it is basically concerned with the person himself, his. It is this concept of fair treatment which is the basis for adams equity theory. Its important for managers to be aware of this factor and actively give.
In 1963, john stacey adams introduced the idea that fairness and equity are key components of a motivated individual. Mar 25, 2020 the equity theory of motivation is typically used in the workplace as a management technique. In this article, we discuss how the equity theory of motivation works, what inputs increase or decrease equity, as well as how to use. Most commonly an individual will compare the role that they do to someone who is getting paid more than they are. Mar 12, 2019 what is organizing function of management. After reading it, you will understand the basics of this powerful motivation theory what is the adams equity theory. Equity theory helps explain how highly paid union workers can go on strike when no one else seems to understand why. Equity theory is in play when individuals say things like. The theoretical framework reflects the expectations of employees and managers of an equitable reward and recognition for expended effort alzawahreh and almadi, 2012.
However, the same theory is also applicable to an individuals selfmotivation, even outside the work environment. The adams equity theory was developed by the american psychologist john stacey. A motivation is the force that energizes, directs and sustains behavior. The utility of equity theory in enhancing organizational effectiveness. Equity theory and its effect on performance outcome ijser.
Due to equity theory and twofactor theory, employees should be content and stay longer. Equity theory is a conceptualization that focuses on the causes and consequences of peoples perceptions of equity and inequity in their relationships with others. For instance, gill and stone 2010 analyze how considerations of equity influence behavior in strategic settings in which people compete and. Equity theory of motivation equity theory was developed by james stacy adam. They contend that culture exerts a profound impact on how concerned men and women are with fairness and equity and on how fairness is defined, especially in the realm of gender relationships. It can be used in personal life, government or business. Equity theory project gutenberg selfpublishing ebooks. Equity theory is based in the idea that individuals are.
Pdf the relevance of scientific management and equity theory. Emotional intelligence refers to the capability of a person to manage and control his or her emotions and possess the ability to control the emotions of others as well. The relevance of scientific management and equity theory in everyday managerial communication situations article pdf available in journal of management policy and practice 3. In this lesson, youll learn the fundamental principles of john stacey adams equity theory and understand how it can affect the workplace. It was published in the journal, experimental social psychology, 1965, new york titles inequality in social exchange. In the 1960s and 1970s, scholars generally concentrated on testing equity theorys applicability to romantic, social, and business relationships. Equity theory is a concept of human relations based on utility, or the amount of happiness and satisfaction one gets out of any given relationship.
However, studies have found that theres a higher rate of jobhopping, which seems like a contradiction fallick et al, 2006. According to the theory, employee motivation is the result of the balance between what an. Equity theory and its effect on performance outcome sultan gashgari. In other words, they can influence the emotions of other people also. Equity theory why employee perceptions about fairness matter. If the employee perceives inequality, he or she he will act to correct the inequity. The theory is based on the idea that people are motivated by the ratio of inputs and outputs they receive in comparison to others. Equity management is the management of the outcome of an entitys assets without factoring for liabilities. The relevance of scientific management and equity theory in. If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness.
Before dissecting asset management, it must be explained what qualifies as equity and how its component parts are defined. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. This paper describes a new construct, equity sensitivity, and proposes that reactions to. The relevance of scientific management and equity theory. The theory helps explain why your employees motivation levels can go up and down at work. Equity theory of motivation in the equity theory of motivation, employees motivation depends on their perception of how fair is the compensation and treatment for their work input. In the same way, well paid athletes feel they are not fairly compensated compared to their peers.
Scribd is the worlds largest social reading and publishing site. Adams equity theory of motivation in management paper tyari. 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 states that a persons motivation is based on what they believe is fair or not fair compared to others pennsylvania state university, 2016. A funny way to understand equity theory is through the video below. Equity predictions are more likely to apply to people who are morally mature. According to equity theory, it is the perception of equitability and inequitability. Diversity of an organization increases if the equity theory is used where people from different backgrounds feel that there is equity in the workplace and the more diverse the organization, the more experienced employees it will have employees are recognized for their inputs and get outputs according to. Abstract this study examines the concept of equity theory, its intention, and core hypothesis. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs.
Pdf the utility of equity theory in enhancing organizational. 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 their work. Equity theory shows that ones perception is relative to their own reality. Equity theory is based in the idea that individuals are motivated by fairness, and if they identify inequities in the input or output ratios of themselves and their referent group, they will seek. Equity theory of motivation management study guide. An employee compares his or her jobs inputs with an outcomes ratio. Therefore, equity theory will be helpful to management in.
Equity theory is used in parlance of human resource management. Equity theory and performance applied social psychology asp. There are some practical difficulties also in applying equity theory e. Equity theory adams equity theory explains the thought process an employee uses to determine the fairness of management decision making. Pdf this paper will focus on examining equity theory. The central theme of the theory is the judgment of fair treatment. The theory is also known as adams inequity theory of motivation.
Responsibilities of the management team the management team carries out the equity retention and redemption decisions the board sets. Equity theory, most popularly known as equity theory of motivation, was first developed by john stacey adams, a workplace and behavioral psychologist, in 1963. Equity assets liabilities assets are defined as any property or resource that has. You can identify equity theory in the workplace by listening to the phrases that people use in conversation. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Therefore, equity theory will be helpful to management in perceiving what motivates. Equity theory, justice theory, and exchange theory all rely on the assumption that it is the perception of equity, fairness, or net gains over the course of a single or ongoing interaction that affect emotions, rather than the actual, obdurate conditions in which the individuals are actually embedded. 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.
Every business owner or manager should have a clear understanding of the equity theory and how it can help to create a business structure which encourages employees to. Adams equity theory, a powerful theory of motivation toolshero. The utility of equity theory in enhancing organizational. Equity theory is a concept in industrialorganizational psychology that focuses on an individuals perceptions of how equitably they are being treated in their work organization. Miles university of georgia equity theory proposes that individuals who perceive themselves as. Pdf the relevance of scientific management and equity. Equity theory implications crosscultural and historical researchers have long been interested in the impact of culture on perceptions of social justice. Equity theory states that the employees perceive what they get from a job situation outcomes about what they put into it inputs and then compare their inputs. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. The managers ability to generate profits has an obvious impact on future equity management options. Sep 25, 2016 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 focuses on determining whether the distribution of resources is fair to both relational partners. But, in reality, the concept of fairness is not appreciated by all. Developed by the behavioral and workplace psychologist, john stacy adams, equity theory of motivation is one of the justice theories explaining the correlation between input and outcome of performance of employee at a job with hisher perception of equitable or inequitable behavior from the employers. Equity theory, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. I will follow a line of investigation on equity theory in regard to its fundamental importance to organizations since it is assumed to be one of. The equity theory of motivation is typically used in the workplace as a management technique. While this theory was developed more than 50 years ago, it remains very much relevant today. In equity theory, motivation is affected by the individual perception of being treated fairly in comparison to others. 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. 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.
Martin university of mississippi in this article, we take a look at why and how managers should communicate with their employees the. Equity theory is based on the idea that individuals are motivated by fairness. Equitytheoryandsiliconvalley 2 abstract silicon valley is known for its amazing workspace and perks. It is centered around a costbenefit analysis of any given relationship. Adams equity theory leadership skills training from.
Higher is individuals perception of fairness, greater is the motivation level and vice versa. As per this motivation theory, an individuals motivation level is correlated to his perception of equity, fairness and justice practiced by the management. To better understand the equity theory we need to understand what inputs and outputs are. Check your understanding of the equity theory of motivation in management in this quiz and interactive worksheet. And in motivation for employees, we have equity theory which is one of the most popular motivation theories in managing and motivating employee performance. The relevance of scientific management and equity theory in everyday managerial communication situations reginald l. While obviously many of these points cant be quantified and perfectly compared, the theory argues that managers should seek to find a fair balance. The theoretical framework for this research consisted of a combination of eri theory, expectancy theory and equity theory. Jan 09, 2018 developed by the behavioral and workplace psychologist, john stacy adams, equity theory of motivation is one of the justice theories explaining the correlation between input and outcome of performance of employee at a job with hisher perception of equitable or inequitable behavior from the employers. The theory makes managers realize that equity motivate tends to be one of the most important motives of the people in the organization. Equity theory of motivation examples explained hrf.
Diversity of an organization increases if the equity theory is used where people from different backgrounds feel that there is equity in the workplace and the more diverse the organization, the more experienced employees it will have employees are recognized for their inputs and get outputs according to their inputs. Over the last few decades, the average persons interest in the equity market has grown exponentially. Considered one of the justice theories, equity theory was first developed in the 1960s by j. This article explains the adams equity theory, developed by john stacey adams in a practical way. Behavioral economics has recently started to apply game theory to the study of equity theory. Adams equity theory, a powerful theory of motivation. High performance is achieved by well motivated people who are prepared to exercise discretionary effort. 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. Stacy adams, a workplace and behavioral psychologist, who asserted that.
Motivating employees with limited pay incentives using equity theory and the fast. Inputs are what you bring to the situation, like your skills, time and education. Taylors scientific management and adams equity theory because most employees working in many positions in manufacturing, home building, and food fast services do not have a college degree, or a degree in business where they may have come in contact with. 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. This paper will focus on examining equity theory, its propositions and underlying assumptions. 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. Equity theory proposes that a persons motivation is based on what he or she considers to be fair when compared to others redmond, 2010. The adams equity theory was developed by the american psychologist john stacey adams in 1963. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly. In other words, an employee gets demotivated by the job and his employer in case his inputs are more than the outputs. As weve talked about many times here at brighthr, your business needs motivated staff to operate at its full capacity. From online teaching and learning tools to personalised learning, and from online and blended course design to trusted and engaging content, we help you help your students be the best they can possibly be. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. The theory is capable of contributing to both theory and practice of motivation.
714 1506 91 1464 28 1569 46 1094 660 1231 167 1183 1109 1517 603 1387 450 1605 258 1354 1496 1305 1629 697 1070 1219 20 1056 568 1599 461 1015 538 1063 774 1329 1494 129 180 515 403