As per this motivation theory, an individuals motivation level is correlated to his perception of equity, fairness and justice practiced by the management. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. Under the proprietary theory, the entity is the agent, representative, or arrangement through which the individual entrepreneurs or shareholders operate. In its basic form, the equity theory of motivation implies that each individual is motivated by the concept of fairness. Basically this means that we judge our investment and input in our relationships with. According to carrell and dittrich 1978, employees who perceive inequity will seek to reduce it, either by distorting inputs andor outcomes in. An employee compares his or her jobs inputs with an outcomes ratio. Equity is measured by comparing the ratio of contributions or costs and benefits or rewards for each person. 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 focuses on determining whether the distribution of resources is fair to both. 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.
Criticism to equity theory directed towards both the assumptions and. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 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 theory is also known as adams inequity theory of motivation. If there are unequal levels of input or output, either internally or within an observed group, then adjustments are made to create more fairness.
Adams 1965 developed a theory on motivation to attempt to explain behavior influenced by the norm of equity lane, irving m. Toward a resolution of the negativeinputs controversy article pdf available in personality and social psychology bulletin 32. Equity theory proposes that peoples motivation, performance and satisfaction depend on their subjective evaluation of the relationships between their effortreward ratio and the effort reward of others in similar situations. Equity theory will help hrd explain employees behavior and provide them with the possible factors that might decrease efficiency and performance. Individual rewardsindividual inputs others rewards others inputs. Equity theory is based on the premise that employees will put forth a particular level of effort that they feel compares to the reward potential. Equity theory of motivation management study guide. Equity theory suggests that individuals who perceive themselves as either underrewarded or overrewarded will experience distress, and that this distress leads to efforts to restore equity within the relationship. Adams equity theory, which stresses the importance of striking a balance between employee inputs and outputs. The core of equity is the principle of balance or equity. Find all the books, read about the author, and more. Equity theory adams, 1963, 1965 draws from exchange, dissonance, and social comparison theories in making predictions about how indi viduals manage their. The 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 to adjust their input to reach their perceived equity.
The equity theory of motivation how to keep your team. It can be used in personal life, government or business. It is centered around a costbenefit analysis of any given relationship. According to equity theory, it is the perception of equitability and inequitability. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. It has been accepted for inclusion in scripps senior theses by an authorized administrator of scholarship. 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. High performance is achieved by well motivated people who are prepared to exercise discretionary effort. As an example of equity theory, if an employee learns that a peer doing. This paper proposes equity theory as a guiding aid in ph. In other words, an employee gets demotivated by the job and his employer in case his inputs are more than the outputs. It explains why a promotion or raise rarely has the desired effect.
First, they may restrict their inputs to a level they believe is. Equity theory plays a role in analyzing organizational behavior. This essay seeks to characterise the essential features of an equitable health care system in terms of the classical aristotelian concepts of horizontal and vertical equity, the common but illdefined language of need and the economic notion of costeffectiveness as a prelude to identifying some of the more important issues of value that policymakers will have to decide for themselves. Pdf the relevance of scientific management and equity. One aspect of equity theory asserts that demotivation occurs if employees. The research supports equity predictions in the area of underpayment, but the overpayment effects have not been satisfactorily demonstrated. Pdf recent exchanges in the bulletin have attempted to resolve difficulties in the possibility of negative inputs in the defini tions of equity. Get the complete knowledge about equity theory of motivation from myassignmenthelp experts. Miles university of georgia equity theory proposes that individuals who perceive themselves as either underrewarded or overrewarded will experience distress, and that. 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. A motivation is the force that energizes, directs and sustains behavior. It was published in the journal, experimental social psychology, 1965, new york titles inequality in social exchange.
Equity and equality is horizontal equity he the most widely accepted principle of equity. Equity theory is based on a principle that peoples actions and motivations are guided by fairness and that discrepancies in this fairness in the workplace will spur them to try and redress it. Equity theory based strategies for students on overcoming. Equity theory of motivation examples explained hrf. Equity, or more precisely, inequity is a major concern of industry. This paper discusses and describes the equity theory of motivation with its implications to managers in the light of a real organizational example. Or does it stand in opposition to the advancement of human welfare. Equity theory of motivation equity theory was developed by james stacy adam. One criticism of hiring friends or the encouraging of making friends on the job is that. To further illustrate equity theory considerations, a. Higher is individuals perception of fairness, greater is the motivation level and vice versa. The relevance of scientific management and equity theory in everyday managerial communication situations article pdf available in journal of management policy and practice 3.
Considered one of the justice theories, equity theory was first developed in the 1960s by j. Employees place great importance on being treated fairly and equally. Motivating employees with limited pay incentives using equity. The core of the equity theory is the principle of balance or equity. 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. Equity theory criticisms a number of demographic and psychological variables affect peoples perception 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 system that determines those inputs and outputs not everyone. The utility of equity theory in enhancing organizational effectiveness introduction what motivates people to work. Inputs include all the rich and diverse elements that employees believe they bring or contribute to the job. While equity theory is a significant step forward, the theory itself needs further specification. Equity theory was first developed in the year 1960 by a psychologist by the name john stacy, who affirmed that workers or employees try to maintain equity between what they offer or put into a job and what they get or receive from it against the inputs and outputs of other people. Equity theory is used in parlance of human resource management. The utility of equity theory in enhancing organizational. Like other theories, equity theory is also not free from criticism. Adams asserted that when people feel distress from inequity they may react in one or all of the following ways.
Equity and equality iza institute of labor economics. Theory and research 1st edition by elaine walster author, g. Adams equity theory, a powerful theory of motivation. The equity theory of motivation is comprised of four widely accepted tenants. Stacy adams, a workplace and behavioral psychologist, who asserted that. Equity theory, as developed by adams 1965, considers motivation and job satisfaction as the result of a comparison of a. Adams equity theory leadership skills training from. Archived from the original pdf on 23 september 2015. Equity theory implications crosscultural and historical researchers have long been interested in the impact of culture on perceptions of social justice. The relevance of scientific management and equity theory. 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 companies involved in these transactions are typically mature and. Equity theory proposes that human beings love and appreciate. Process theories of motivation equity theory business essay.
According to the theory, employee motivation is the result of the balance between what an. 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 equity theory of motivation employee motivation. Equity theory, as developed by adams 1965, considers motivation and job satisfaction as the result of a comparison of a workers perceived. Pdf equity theory and interpersonal attraction researchgate. This paper concentrates on equity theory as it is conceived by adams. Equity theory is based on the idea that individuals are motivated by fairness. The adams equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. The utility of equity theory in enhancing organizational effectiveness article pdf available in european journal of economics, finance and administrative sciences march 2012 with 17,394 reads. It is a cognitivecentered theory as it is basically concerned with the person himself, his.
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, popularly known as adams equity theory, aims to strike a balance between an employees input and output in a workplace. Concept that people derive job satisfaction and motivation by comparing their efforts inputs and income outputs with those of the other people in the same or other firms. The adams equity theory shows why salary and benefits alone dont determine an employees motivation. 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. According to this theory of motivation, an individuals motivation level is connected with his perception of equity, fairness and justice practised by management. Equity theory comes under process theory which gives the perception whether the individual is going to work hard or not depending upon the rewards and possible outcomes. It can even undermine the motivation of other employees. 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.
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