Adam Equity Theory Of Motivation Pdf Hbr

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  1. Stacy Adams’ equity theory is based on the principle that people are motivated to act in situations where they perceive they have been treated inequitably or unfairly. Adams argues that the more intense the perceived inequity, the higher the tension, and the stronger the motivation to act.
  2. Equity Theory (Adam's Equity Theory) explains the thought process an employee uses to determine the fairness of management decision making. The core of equity theory says that individuals judge the fairness of their treatment based on how others like them are treated.
  3. Study the theory that underlies equity. One of the most explicit and rigorously developed models explaining how individuals evaluate social exchange relationships is John Stacey Adam’s “Equity Theory” developed in 1965 (Cosier & Dalton, 1983). Equity works like a system with inputs and outputs.

Adam’s Equity Theory

Motivation of Employees


Employee Retention


Equity theory, most popularly known as equity theory of motivation, was first developed by John Stacey Adams, a workplace and behavioral psychologist, in 1963.
John Stacey Adams proposed that an employee’s motivation is affected by whether the employee believes that their employment benefits/rewards are at least equal to the amount of the effort that they put into their work.
Definition of equity
An individual will consider that he is treated fairly if he perceives the ratio of his inputs to his outcomes to be equivalent to those around him. Thus, all else being equal, it would be acceptable for a more senior colleague to receive higher compensation, since the value of his experience (and input) is higher. The way people base their experience with satisfaction for their job is to make comparisons with themselves to people they work with. If an employee notices that another person is getting more recognition and rewards for their contributions, even when both have done the same amount and quality of work, it would persuade the employee to be dissatisfied. This dissatisfaction would result in the employee feeling under-appreciated and perhaps worthless. This is in direct contrast with the idea of equity theory, the idea is to have the rewards (outcomes) be directly related with the quality and quantity of the employees contributions (inputs). If both employees were perhaps rewarded the same, it would help the workforce realize that the organization is fair, observant, and appreciative.
This can be illustrated by the following equation:
Adam’s categorised employment benefits and rewards as outputs and an employee’s work effort as inputs.

Input Examples
  • The number of hours worked by the employee
  • An employee’s work responsibilities
  • An employee’s work duties
  • The work commitment demonstrated by the employee
  • An employee’s loyalty
  • An employee’s flexibility such as undertaking tasks at short notice
  • The support that the employee has provided to the organisation, colleagues and line managers
Output Examples
  • Salary
  • Bonus
  • Prizes
  • Recognition of the employee’s contribution
  • Positive work appraisals
  • Work promotions
  • Pension
  • Employer flexibility
  • Annual leave
Adam’s stated that if an employee believes that their work outputs are not equal or greater than their inputs then the employee will become de-motivated. Adams’ theory includes the assertion that when an employee is assessing whether the outputs they receive are fair the employee will often compare their colleague’s work inputs and outputs with their own. The comparison will often be made with an employee at a similar level in the organisation to the employee.
Facts [+]
The 2011 Nielsen survey also showed that the top five dimensions students considered when it comes to seeking employment were high degree of independence at work, salary package, learning on the job, growth prospects and standing of the company in the market [Employer brand] respectively.

Propositions
Equity theory consists of four propositions:
  1. Individuals seek to maximize their outcomes (where outcomes are defined as rewards minus costs).
  2. Groups can maximize collective rewards by developing accepted systems for equitably apportioning rewards and costs among members. Systems of equity will evolve within groups, and members will attempt to induce other members to accept and adhere to these systems. The only way groups can induce members to equitably behave is by making it more profitable to behave equitably than inequitably. Thus, groups will generally reward members who treat others equitably and generally punish (increase the cost for) members who treat others inequitably.
  3. When individuals find themselves participating in inequitable relationships, they become distressed. The more inequitable the relationship, the more distress individuals feel. According to equity theory, both the person who gets “too much” and the person who gets “too little” feel distressed. The person who gets too much may feel guilt or shame. The person who gets too little may feel angry or humiliated.
  4. Individuals who perceive that they are in an inequitable relationship attempt to eliminate their distress by restoring equity. The greater the inequity, the more distress people feel and the more they try to restore equity. (Walster, Traupmann and Walster, 1978)

John Stacey Adams’ Equity Motivation Theory allows you to put workplace psychology into action and increase your own or your team’s motivation. Adams’ equity theory builds on Maslow’sHierarchy of Needs and Herzberg’sTwo Factor Theory, and was first presented in 1963.

Equity theory of Motivation. Equity Theory 1)Equity: A person feels equitably treated when his outcome/input ratio is equal to other person’s outcome/input ratio. Individual’s outcome = Other’s outcome Individual’s input Other’s input Equitably paid workers are said to feel satisfied. Equity Theory of Motivation in Management. The essential aspects of the equity theory may be shown by an equation; There should be a balance of the outcomes/inputs relationship for one person in comparison with that for another person. If the person thinks that the rewards are greater than what is considerable.

In short, Adam’s Equity Theory means that employees will become de-motivated if their perceived input is greater than the output from the company. Motivation can be expressed in many ways;

  • Effort
  • Loyalty
  • Hard Work
  • Commitment
  • Skill
  • Ability
  • Adaptability
  • Flexibility
  • Tolerance
  • Determination
  • Enthusiasm
  • Trust in manager and superiors
  • Support of colleagues and peers
  • Personal sacrifice, etc

Obviously you want a motivated team, so the output from the company must be in balance. Outputs are both tangible such as salary, benefits and expenses, and intangible such asRecognition

  • Reputation
  • Responsibility
  • Sense of Achievement
  • Praise and thanks
  • Stimulus
  • Sense of Advancement/Growth
  • If you start down the slippery slope where the employee perceives their input to exceed the company output, then de-motivation will creep in, and potentially result in increasingly disruptive behaviour.

Putting Adams’s Equity Motivation Theory Into Practice

As a manager, you need to keep an eye on the tangible and intangible outputs from the company. Remember, to your team, you are “the company”, so it’s up to you to make the effort.

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Although you may have little scope to change pay policies and make substantial changes to what people earn, there is plenty you can do. Making sure you hold regular one to one meetings to discuss goals and personal development is a valuable investment in time. Set goals for your team and help them to create their own personal development plan. Make sure you give feedback and welcome feedback yourself – both positive feedback and the much dreaded negative feedback. Have a laugh at work by introducing group team building activities. Implement a reward and recognition scheme to make sure that good performance is noticed and shared.

Equity Theory Of Motivation Ppt

Adams’ Equity Motivation Theory is a simple but useful tool allowing you to apply workplace psychology and increase your and your team’s motivation at work.