J. Stacey Adams’ equity theory is a process model of motivation. It’s a great theory when used correctly, but it’s definitely not the only theory. Working Scholars® Bringing Tuition-Free College to the Community, Define referent group and identify the four types of referent groups, Explain the assumptions that equity theory is based on. When applied to the workplace, Equity Theory focuses on an employee's work-compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result. Try refreshing the page, or contact customer support. For the equity theory to be something that can help managers motivate their workforce, people need to change their behaviors when something that is unfair is fixed. For example we might think that by giving the entire workforce the same bonus, we’re being fair. This will motivate people because they’ll know that the effort they put in will bear the fruits of their labor. credit by exam that is accepted by over 1,500 colleges and universities. 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This is basically referred to as intrinsic and extrinsic motivation. Equity theory can. When measuring fairness, a person almost always perceives using one of four references or “referents.” The specific type of reference you measure yourself against is key to motivation. Equity theory explains how employees determine what is fair and how they act upon their perceptions. Some of those factors are internal while others are external. credit-by-exam regardless of age or education level. How is equity theory different from social exchange theory? Equity theory is a concept belonging to John S. Adams, a behavioural psychologist.The theory helps explain why your employees’ motivation levels can go up and down at work. The equity theory of motivation has to make key assumptions. Create your account. Once you identify which of the four referents you or another person uses to judge fairness, you can use this motivational theory to focus on the right inputs and outputs that increase motivation. Herzberg’s Two Factor Theory. The theory considers the concept of equality and fairness, as well as the importance of comparison to others. If not, then it fails and should be discarded for another theory or approach. If you have a goal but aren’t able to achieve it, your current hard work (and other inputs) aren’t resulting in your desired outputs. Equity theory, when applied to the workplace, focuses on an employee’s work compensation relationship and an employee’s attempt to reduce any perceived unfairness. Join a Community of Thinkers & Action-Takers for Content on Living an Optimal Life: The equity theory of motivation states a person’s motivation is directly related to their perception of equity or level of fairness. Discover strengths and weakness of the theory and implementation advice on the two main processes an individual can use to restore equity. Definition: Equity theory, popularly known as Adam's equity theory, aims to strike a balance between an employee’s input and output in a workplace.If the employee is able to find his or her right balance it would lead to a more productive relationship with the management. While that's a pretty safe assumption to make, it is an assumption nonetheless. Extrapolating from this, Adam’s Equity Theory tells us that the higher an individual’s perception of equity (fairness), then the more motivated they will be. My 1. and career path that can help you find the school that's right for you. An “input” is a thing a person does in order to achieve a specific outcome. Higher is individual’s perception of fairness, greater is the motivation level and vice versa. Get access risk-free for 30 days, I spend my career searching for actionable information on living an optimal life, testing what I’ve learned and sharing what’s worked (and oftentimes, what hasn’t). If their effort results in higher salary in relation to someone else’s salary then the person is motivated. Equity Theory proposes that a person's motivation is based on what he or she considers to be fair when compared to others (Redmond, 2010). flashcard sets, {{courseNav.course.topics.length}} chapters | The three situations of equity theory are illustrated in the following figure: An employee with several years’ experience can be frustrated to find out that a recent college grad hired at a salary level higher than he or she is current earnings, causing motivation levels to drop. As we’ve talked about many times here at BrightHR, your business needs motivated staff to operate at its full capacity. However, the same theory is also applicable to an individual’s self-motivation, even outside the work environment. Common inputs that result in fairness and motivation include: These inputs are the things you and others invest into your life and your work. If the assumptions hold true then the equity theory can help you increase motivation. Enrolling in a course lets you earn progress by passing quizzes and exams. For example, life isn’t all that fair. Equity. Plus, get practice tests, quizzes, and personalized coaching to help you Start studying equity theory of motivation. As per this motivation theory, an individual’s motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Herzberg’s two-factor theory of motivation is opposite to the equity theory of motivation in that employee attitude and workplace motivation are not correlated. The advantages of equity theory are as follows. Get the complete knowledge about Equity Theory of motivation … Equity theory is based in the idea that individuals are motivated by fairness. Remember that while the equity theory of motivation was originally geared towards business, it can also be used for your personal life. For example, someone might put in something like effort and expect an output like higher salary. Betty, a waitress, learns that she is being paid less for doing the same job as her fellow waitress Jennifer even though they have the same work experience and perform at the same level. 's' : ''}}. You can invest one or many of these inputs. It says that the level of reward we receive, compared to our own sense of our contribution, affects our motivation. Ultimately, it takes a blended approach of understanding key inputs and outputs in order to drive towards your ultimate goals. This means that people often compare themselves to others and can become demotivated if they believe they’re not only under-rewarded but also over-rewarded in relation to others. People therefore expect things like effort to result in achievements like higher salary. This helps put things in perspective so we never feel slighted by life or by someone else. So, the perception of inequity motivate the employees’ behavior to restore equity. All other trademarks and copyrights are the property of their respective owners. What action should Veterans executive take to correct these problems? The equity theory of motivation is the idea that what an individual receives for their work has a direct effect on their motivation. While a person always wants to be treated fairly and increase their personal equity, they also want to ensure that they’re not being unfairly compensated in relation to others around them. The individual will look at the treatment of their peers or coworkers and see if the y a re being treated as fairly. | 2 The equity theory of motivation is typically used in the workplace as a management technique. study Provide an argument for making child care costs tax-deductible for working families. Example speeches In this set of materials the reading passage describes a theory of employee satisfaction, and the listening passage gives us some examples of that theory.. An error occurred trying to load this video. The assumption here is that people actually care about what happens to someone else in their assessment of equity and justice. The higher the fairness and justice, the more motivated a person typically becomes. Therefore, equity theory will be helpful to management in perceiving what motivates employees (Berkowitz, 1965). a). 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. Already registered? © copyright 2003-2021 Study.com. 21 chapters | Services. As an example of equity theory, if an employee learns that a peer doing exactly the same job as them is earning more money, then they may choose to do less work, thus creating fairness in their eyes. If a person believes that they have either more or less equity in relation to their chosen reference, they will feel that things are unfair and lose motivation. The equity theory is very hard to gauge because there are several different inputs and outputs to a … Equity Theory of Motivation Examples The most common example of the equity theory is with hard work and salary. 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. Inputs, The issue of .......corresponds to whether the distribution of goods and services to individuals and the profits to firms is fair. In fact, equity does not motivate people. If you can identify what you or another person is investing in and what you or they expect to earn in return, you’ll be able to self-motivate as well as motivate the others around you. In business, the Equity Theory of employee motivation describes the relationship between how fairly an employee perceives he is treated and how hard he is motivated to work. If you’re able to figure out what referent you or another person is using, you can work to create more fairness and increase motivation. To help ensure you don’t create equity tension, make sure you refer to the following ratio: Therefore, it’s important than when you’re trying to motivate yourself or others, you try to create equal fairness across the board. A referent group is a selection of people an individual relates to or uses when comparing themselves to the larger population. In business, the equity theory of motivation is typically used as a management technique. courses that prepare you to earn David McClelland's Theory of Motivation: Overview, Quiz & Worksheet - Equity Theory of Motivation in Management, Over 83,000 lessons in all major subjects, {{courseNav.course.mDynamicIntFields.lessonCount}}, Motivation Theory: Needs-Based & Behavior-Based, The Pygmalion Effect: Influencing Employee Behavior, Acquired Needs Theory: Need for Achievement, Power & Affiliation, Thorndike's Reinforcement Theory: Using Consequences to Motivate Employees, Reward Systems & Employee Behavior: Intrinsic & Extrinsic Rewards, Types of Job Redesign: Job Enrichment, Enlargement & Rotation, How to Empower Employees & Improve Employee Performance, Douglas McGregor's Motivation & Management Theories, Employee Behavior: Definition, Issues & Expectations, Hygiene Factors: Definition & Explanation, Intrinsic Motivation in the Workplace: Factors & Examples, Motivating Employees in the Workplace: Methods & Importance, Introduction to Management: Help and Review, Biological and Biomedical Equity is defined as justice, inequity-injustice. Waldbaums a supermarket chain I work for lacks motivation and needs a solution to this problem. -The equity theory is based on the idea that people are motivated by social equity for their performance. For this reason, it’s extremely important to treat others as you would treat yourself so that no one feels over- or under-appreciated. Equity theory is based in the idea that individuals are motivated by fairness. Alternatively, if the inputs don’t result in the expected outcome, it’s possible to become demotivated. 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. As a result, employee perceptions about fairness do matter–whether they are real or misguided. Sociology 110: Cultural Studies & Diversity in the U.S. CPA Subtest IV - Regulation (REG): Study Guide & Practice, Positive Learning Environments in Physical Education, Curriculum Development for Physical Education, Creating Routines & Schedules for Your Child's Pandemic Learning Experience, How to Make the Hybrid Learning Model Effective for Your Child, Distance Learning Considerations for English Language Learner (ELL) Students, Roles & Responsibilities of Teachers in Distance Learning, Safety Rules & Procedures for P.E. The perception would motivated employees to complain about their work, lower their inputs (for example, time and effort), or require higher a salary. However, you also have to understand the employee’s reference. Equit. If a person believe’s they’re putting in the effort needed to get a raise, they will become motivated if their salary increases or demotivated if it doesn’t. There are four types of referent groups, including self-inside, self-outside, others-inside and others-outside. succeed. The key assumptions of the equity theory of motivation include: John Stacey Adams is a workplace, social, and behavioral psychologist who came up with the equity theory of motivation in 1963. Motivation. Efficiency b). In 1963, John Stacey Adams introduced the idea that fairness and equity are key components of a motivated individual. Visit the Introduction to Management: Help and Review page to learn more. This is known as “equity tension.” If you think you’re under-rewarded and have less equity in relation to your reference, you become less motivated. In this lesson, you'll learn the fundamental principles of John Stacey Adams' equity theory and understand how it can affect the workplace. The four types of referents include the following: Understanding these reference experiences is key to understanding how a person perceives fairness. The theory itself is based on the idea that people make comparisons, either between their current situation and a past experience, or between themselves and someone else. Select a subject to preview related courses: Like any theory of human psychology, the equity theory makes a number of assumptions about how people think and behave. imaginable degree, area of Quiz & Worksheet - Textile Design Process & Methods, Quiz & Worksheet - How to Write About Africa Synopsis, Quiz & Worksheet - War & Peace Themes & Analysis, Flashcards - Real Estate Marketing Basics, Flashcards - Promotional Marketing in Real Estate, Common Core ELA Standards | A Guide to Common Core ELA, Common Core Math - Functions: High School Standards, Math Review for Teachers: Study Guide & Help, Exponentials and Logarithms in AP Calculus: Homework Help Resource, Quiz & Worksheet - Pattern of 12 Bar Blues, Quiz & Worksheet - Social Theories of Aging, Quiz & Worksheet - Counterpoint in the Baroque Period, Quiz & Worksheet - History of the Ten Commandments. To learn more, visit our Earning Credit Page. Employees often percieve that if they work hard they will eventually deserve a raise. A referent group is a selection of people an individual relates to or uses when comparing themselves to the larger population. People motivated by equity typically evaluate their level of fairness by comparing specific inputs like effort and enthusiasm to desired outcomes like compensation or self-worth. Employees want to be compensated fairly for their contributions when compared to their colleagues. The equity theory of motivation is great for understanding what goals motivate you and the people around you. flashcard set{{course.flashcardSetCoun > 1 ? Rather than worrying about your own motivation, you worry about the motivation of others in your organization – specifically the people who you work with and who work for you. As it relates to equity theory, there are four basic referent groups that people use: Comparisons don't need to be between people making the same money or doing the same type of work. Peter Drucker, an author who specialized in economics, first proposed the link between Equity Theory and employee motivation. However, if the chosen input does not result in the expected outcome it can become demotivating. The output-input ratio allows people to make comparisons to people outside their immediate referent group. Tech and Engineering - Questions & Answers, Health and Medicine - Questions & Answers, I can't believe it! first two years of college and save thousands off your degree. In psychology, motivation is composed of numerous factors. All rights reserved. In this workers compare their treatment to … Equity theory is about perceived fairness. Equity Theory explains why people can be happy and motivated by their situation one day, and yet with no change to their terms and working conditions can be made very unhappy and demotivated, if they learn for example that a colleague (or worse an entire group) is enjoying a better reward-to-effort ratio. Explain the "motivation problem" that may exist in terms of the Equity Theory of Work Motivation and indicate how equity can be restored. J. Stacey Adams developed Equity Theory of motivation in the early 1960’s, this theory is also known as a motivation that can be affected through an individual's observation of fair treatment in social exchanges. It's not hard to find something that is unfair in most workplaces, and we can all find someone to compare ourselves to that makes us feel under-appreciated. Not sure what college you want to attend yet? If you’re demotivated because you don’t have a firm goal in mind, then refer to the strategy above by trying to first define your outputs, inputs, and referents. When this is the case, it’s important to identify your subordinates’ inputs, desired outputs, and references before they become demotivated, so that you can accelerate their growth within your company. Sciences, Culinary Arts and Personal The easiest way to see the equity theory at work, and probably the most common way it does impact employees, is when colleagues compare the work they do to someone else that gets paid more than them. Rather than becoming demotivated when we feel like we’re dealt a bad hand, we should instead focus on the things in life we appreciate. You can either change your inputs, alter your desired outputs, or adjust the reference you’re using to compare your fairness to others. Government intervention in the market c). Adams’ Equity Theory of Motivation. An example of Equity theory in practice is when a worker discovers that they receiving less pay than they feel is appropriate for a particular job or task; they take action to restore equity. You can test out of the Other people may be judging fairness on the salary growth of others. Create an account to start this course today. 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