Equity theory is a social psychological concept that explains how individuals perceive and respond to perceived unfairness in social exchanges. It suggests that individuals strive for fairness in their relationships and that when they perceive an imbalance in the distribution of resources or rewards, they will attempt to restore equity.
The theory was first proposed by John Stacey Adams in 1963, and it has since been widely studied in the fields of psychology, sociology, and management. According to equity theory, individuals compare their own outcomes and inputs (such as effort, time, and resources) to those of others in order to determine whether they are being treated fairly. If they perceive an imbalance, they may respond in a number of ways, including adjusting their own inputs or outcomes, seeking additional resources or rewards, or terminating the relationship.
There are several key principles that underlie equity theory. One is the idea that individuals have different perceptions of what is fair and that these perceptions may vary based on personal values, cultural norms, and past experiences. Another is the idea that individuals are motivated to maintain a sense of fairness and balance in their relationships, and that this motivation can be a powerful force in shaping behavior.
There are several different types of equity that have been identified in the literature. These include distributive equity, which refers to the distribution of resources and rewards among individuals; procedural equity, which refers to the fairness of the processes used to make decisions and allocate resources; and interactional equity, which refers to the fairness of the interactions between individuals.
There are a number of implications of equity theory for organizations and individuals. For organizations, it can be important to ensure that resources and rewards are distributed fairly among employees in order to maintain a positive and productive work environment. For individuals, understanding and applying equity theory can help them to navigate conflicts and to build more satisfying and fair relationships with others.
Overall, equity theory is a valuable framework for understanding how individuals perceive and respond to fairness in social exchanges. It highlights the importance of fairness in relationships and provides insight into how individuals can work to maintain balance and equity in their interactions with others.
Equity Theory
People assess the ratio between their outcomes and their relevant inputs. It can lead to anger and controlling behavior in relationships. Employees who feel like their jobs treat them fairly are more likely to be Leaders who let employees determine what is fair compensation can help reduce equity tension in the workplace. Equity theory proposes that individuals in social exchange relationships compare each other the ratios of their inputs into the exchange to their outcomes from the exchange. If they come across an inequitable situation, they tend to adjust their inputs to maintain balance.
The equity theory of motivation states a person's motivation is directly related to their perception of equity or level of fairness. This is known as "equity tension. What they give to you—their employer. Please keep reading to learn more about this influential theory and how it potentially impacts your intrinsic motivation. Bright HR Ltd is an appointed representative of Peninsula Business Services Ltd which is authorised and regulated by the Financial Conduct Authority in respect of non-investment insurance products. She is still studying, while he works in an accounts office for a living. ADVERTISEMENTS: There are some practical difficulties also in applying equity theory e.
If their salary isn't growing at the speed they expect based on their effort, they'll become demotivated. This is where the four referents we discussed above come into play. Such a feeling of distress leads these people to make efforts towards restoring equity to the relationship, be it organizational, personal or intimate. Should you become demotivated and quit, or should you stick it out and further invest in the company, hoping that you or the company can turn it around. For example, someone may put in more effort at the start of a relationship or when there are issues such as illness, but as long as the relationship returns to equity, it will last. Even when it comes to love, care, affection and sharing joint responsibilities, both or all the parties tend to evaluate their extended efforts against their received benefits and compare these with those involved in the relationship. Maha Kumaran, in Leadership in Libraries, 2012 Contemporary motivation theories Two well-known contemporary motivation theories are equity theory and expectancy theory ibid.
Equity and Inclusion: The Roots of Organizational Well
If these new librarians or staff happen to be desperate immigrants, they might consider doing this job only until they can find a better one. Read more stories by. Speak up if your boss mistreats you. Rather than being the sweet elixir of happiness, money and income have a bitter side. It should also be noted that, while the Other is typically a co-worker, it could be someone doing similar work in another organization or library. For example, recall the 2011 Occupy Wall Street protests against financial greed that swept the United States and spread to Europe and Asia Bloomberg, 2011.
Higgins, in Economic Growth and Sustainability, 2015 5. The notion of restoring balance to the relationship is what drives most of us, as everyone strives for harmony. In some cases an employee may not be aware of the contributions of another employee. Of course, not all libraries can afford to pay more — public libraries and some special libraries may be entirely dependent on public taxes or funding and many academic libraries may not get all the grants they were promised. In case, there is inequality in the ratios of outcomes and inputs, people can experience two types of inequity-positive and negative. So what is this theory all about? Thus, a women employee that uses another women employee as a referent tends to lead to a lower comparative standard. The equity theory helps in understanding both the causes and likely consequences of feelings of un-equitable treatment among organisation members.
Equity Theory: The Recent Literature, Methodological Considerations, and New Directions on JSTOR
Second, as highlighted in our review, most of the empirical papers on the determinants and consequences of pay gap have used the compensation gap between the CEO and rest of the senior executives. Every employee responds to inequitable relationships in their unique way. Sprecher 1992 suggests women feel more guilty when over-benefitting and more dissatisfied when under-benefitting, suggesting DeMaris et al. A good starting point is making sure everyone understands and acknowledges that systemic racism is a system of structuring opportunity and assigning value based on the social interpretation of physical characteristics such as skin color , in a way that unfairly disadvantages some individuals and communities while benefitting others. Maybe the thing you thought you wanted isn't what you want anymore. In Levinger's stage theory of relationships, people begin with a cost—benefit analysis. This form of equity is common in organisations.
As a good team leader, you must learn these expectations and influence values. If the chosen inputs result in the expected or desired outcomes, things are perceived to be fair and a person is more motivated. Open door policy Second, have an open door policy. Communicating with your coworkers allows you to understand better what they perceive as fair and adjust your behavior accordingly. One of the main theories used to understand fairness is equity theory e. .
Equity Theory: Definition, Meaning & Examples, Components
For example, life isn't all that fair. What, then, does this mean? Hence, future tournament studies should control adequately for the impact of CEO power in their empirical tests, in order to provide robust evidence on why tournament theory is superior to other related theories. However, if the chosen input does not result in the expected outcome it can become demotivating. How To Use This Theory The equity theory of motivation can be a helpful tool for individuals looking to improve their intrinsic motivation. Control over one's outcomes appears in a cost—reward model Dovidio, Piliavin of helping.
The theory also states that partners do not have to make equal contribution or receive equal benefits, as long as the ratio between the contributions and benefits is similar. Inputs are typically contributions a person makes to themselves, other people, or larger organization. Here is a table that outlines some of the inputs and the expected outcomes that people expect in any kind of a relationship. The library industry is not as competitive as IT industries once were and probably never will be. In terms of firm performance, Kale et al. Hows is this fair? Equity Theory Examples in the Workplace One can identify Equity Theory in the workplace by overhearing conversations among their colleagues and peers.
Equity Theory and its Applications in the Various Spheres of Life
The outcomes which an individual receive are in the form of pay, working conditions, recognition, social relationships, level of supervision etc. Regardless, at the end of the day, you expect to be fairly compensated for the investment of these inputs in the form of salary, satisfaction, and more. What do you do? Equity theory in some sense is related to motivation-hygiene theory, in that it considers both demotivators and motivators. You can either change your inputs, alter your desired outputs, or adjust the reference you're using to compare your fairness to others. It should be noted that what matters is not necessarily actual but perceived inequity.
