Equity theory of motivation


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 job with his/her perception of equitable or inequitable behavior from the employers.

According to the theory, employee motivation is the result of the balance between what an employee attributes to the company against the recognition he/she receives as compared to what his/her co-workers receives for the same attribution.

Assumptions of Equity Theory of Motivation

The developer of this theory, J.S. Adams has put forward four major assumptions, which are listed below.

  • An individual is concerned with his achievements (rewards and recognition) as well as with achievements of others.
  • Employees demand fair treatment or acknowledgement of their contribution to their company.
  • Employees determine what return (equitable) they should receive after comparing their inputs with the outcomes their relational workers have received.
  • Employees who feel that they are being inequitably treated will try to reduce inequity, either by balancing their performance level or by leaving the company.

What is equity for employees?

An individual feel that he is being treated fairly when the ratio of his input to outcomes is equivalent to those of a relational employee. The statement can be illustrated in an equation as following,

$\frac{individual's  outcomes}{individual's  inputs} = \frac{relational  employee’s  outcomes}{relational  employee’s  inputs}$

From the above equation,
when left side of the equation > right side of the equation, employee arrogance is high
when left side of the equation = right side of the equation, employee motivation is high
when left side of the equation < right side of the equation, employees are demotivated

Outcomes of different employees may vary due to reasons like change in level of skills or experience. In such a case, it would be justifiable for senior colleagues to receive higher compensation as for the value of inputs they make is also high. 

When employees of same job level, with similar experience and skills, making same efforts and inputs are biasedly treated, it creates a feeling of dissatisfaction in those employees receiving lesser attention or compensation. Such dissatisfaction if not addressed properly, or in time, leads to employees feeling underappreciated and even worthless which influences the quality and quantity of input that will be made by the employees in future.

On the contrary, when employees are equitably treated, they realize that the company is fair, regardful, encouraging and appreciative.

What are inputs?

Inputs can be referred as an individual’s contribution which entitles him to certain rewards. In simple words, it can be defined as the contribution of employees to meet the organization’s goal. Input can be of various forms such as,

  • Skill
  • Experience
  • Education
  • Ability
  • Time
  • Effort
  • Enthusiasm
  • Hard work
  • Commitment
  • Determination
  • Personal sacrifice
  • Loyalty
  • Adaptability
  • Flexibility
  • Tolerance
  • Relationships with superiors and subordinates

What are outcomes?

Outcomes are the consequences (positive or negative) that an individual receives as a return for their input. A sense of satisfaction is developed and employees are motivated to make more efforts when he perceives that the ratio of input to outcome is equal or nearly equal. Outcomes may be tangible as well as intangible. Some examples of outcomes are,

  • Salary
  • Fringe benefits
  • Responsibility
  • Praise
  • Reputation
  • Recognition
  • Flexible work arrangements
  • Gratitude
  • Sense of achievement
  • Job security
  • Training opportunity
  • Career advancement opportunity

Steps Involved in Equity Theory of Motivation

etiquity theory of motivation

Self evaluation

Self evaluation is an act of assessing or evaluating actions, attitudes or performance of oneself. It helps an individual in realizing what efforts or inputs have been made from his side and what outcomes have he received.

Evaluation of others

Once an individual is done evaluating his input-outcome ratio, he evaluates his peers and co-workers. An individual becomes clear about what compensations have his relational workers received for their inputs.

Comparison of self with others

Evaluating input-outcome ratio of others helps an individual in visualizing how much more or less outcomes he has received in comparison with the outcomes received by his co-workers for making inputs of same level.

Feeling of equity or inequity

Evaluating and comparing input-outcome ratio of oneself with others helps an individual in differentiating fair and unfair treatment from the employers. If employees of same job levels are receiving different level of rewards and recognition, despite their level of input being same, the company can be asserted for making inequitable treatment.

Action to reduce inequity

When each employees of the company are fairly treated, it results in increased motivation of employees, which ultimately leads to increased productivity and progress of overall company. But in cases when employees realize unfair or biased treatment from the employers, employees may take acute actions like,

  • Employees may argue with the employers, creating unfavorable workplace
  • Employees may decrease the level of input, affecting productivity of the company
  • Employees may take help of various unions or legal executives to solve the issue
  • Employees may leave the company, causing huge loss of time and money to the company