Equity Theory
- Is best known in management through the work of J. Stacy Adams. It is based on a logic of social comparisons and the notion that perceived inequity is a motivating state. That is, when people believe that they have been fairly treated in comparison to other, they will be motivated to eliminate the discomfort and restore a sense of perceived equity to the situation.
- Personal rewards are compared with others’ rewards with the result with either perceived equity meaning the individual is satisfied and does not change behaviour or perceived inequity meaning the individual feels discomfort and acts to eliminate the inequity. These equity comparisons are especially common whenever managers allocate extrinsic rewards, things like compensation, benefits, preferred job assignments, and work privileges.
- Adam predicts that people will try to deal with perceived negative inequity by any one or more of the following:
· Changing their work inputs by putting less effort into their jobs.
· Changing the rewards received by asking for better treatment.
· Changing the comparison points to make things seem better.
· Changing the situation by leaving the job.
- People who feel underpaid, for example, experience a sense of anger. This cause them to try to restore perceived equity to the situation by pursuing one or more of the actions described in the above list, such as reducing current work efforts to compensate for the missing rewards or even quitting the job.