Equity theory
Equity theory focuses on determining whether the distribution of resources is fair. Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person.[1] Considered one of the justice theories, equity theory was first developed in the 1960s by J. Stacey Adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others.[2] According to Equity Theory, in order to maximize individuals' rewards, we tend to create systems where resources can be fairly divided amongst members of a group. Inequalities in relationships will cause those within it to be unhappy to a degree proportional to the amount of inequality.[3] The belief is that people value fair treatment which causes them to be motivated to keep the fairness maintained within the relationships of their co-workers and the organization. The structure of equity in the workplace is based on the ratio of inputs to outcomes. Inputs are the contributions made by the employee for the organization.
Time
Education
Εxperience
Effort
Loyalty
Hard Work
Commitment
Ability
Adaptability
Flexibility
Tolerance
Determination
Enthusiasm
Personal
sacrifice
Trust in supervisors
Support from co-workers and colleagues
Skill
People measure the totals of their inputs and outcomes. This means a working mother may accept lower monetary compensation in return for more flexible working hours.
Different employees ascribe personal values to inputs and outcomes. Thus, two employees of equal experience and qualification performing the same work for the same pay may have .
quite different perceptions of the fairness of the deal
Employees are able to adjust for purchasing power and local market conditions. Thus a teacher from Alberta may accept lower compensation than his colleague in Toronto if his cost of living is different, while a teacher in a remote African village may accept a totally different pay structure.
Although it may be acceptable for more senior staff to receive higher compensation, there are limits to the balance of the scales of equity and employees can find excessive executive pay demotivating.
Staff perceptions of inputs and outcomes of themselves and others may be incorrect, and perceptions need to be managed effectively.
An employee who believes he is overcompensated may increase his effort. However he may also adjust the values that he ascribes to his own personal inputs. It may be that he or she internalizes a sense of superiority and actually decrease his efforts.
Benevolent individuals, those who prefer their own input/outcome ratios to be less than those of their relational partner. In other words, the benevolent prefers to be under-benefited.
Equity Sensitives, those who prefer their own input/outcome ratios to be equal to those of their relational partner.
Entitled individuals, those who prefer their own input/outcome ratios to exceed those of their relational partner. In other words, the entitled prefers to be over-benefited.
[22]
Expectancy theory
Social psychology
Predicted outcome value theory
Vulnerability and care theory of love
Social exchange theory
Game theory
Self-expansion model
Equity
Identity management
Relational dialectics
Interpersonal deception theory
Adams, J. S. (1963). "Toward an understanding of inequity". Journal of Abnormal and Social Psychology. 67 (5): 422–436. :10.1037/h0040968. PMID 14081885.
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Gill, D.; Stone, R. (2010). "Fairness and desert in tournaments". Games and Economic Behavior. 69 (2): 346–364. :10.1016/j.geb.2010.01.002.
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Guerrero, Laura K.; Andersen, Peter A.; Afifi, Walid A. (2010). . SAGE Publications. ISBN 978-1-4129-7737-1.
Close Encounters: Communication in Relationships
Huseman, R.C.; Hatfield, J.D.; Miles, E.W. (1987). "A New Perspective on Equity Theory: The Equity Sensitivity Construct". The Academy of Management Review. 12 (2): 222–234. :10.2307/258531. JSTOR 258531.
doi
Messick, D. & Cook, K. (1983). Equity theory: psychological and sociological perspectives. Praeger.
Sankey, C.D., (1999). Assessing the employment exchanges of Business Educators in Arizona. Unpublished doctoral dissertation, Arizona State University.
Spector, P.E. (2008). Industrial and Organizational Behavior (5th ed.). Hoboken, NJ: Wiley.
Traupmann, J. (1978). A longitudinal study of equity in intimate relationships. Unpublished doctoral dissertation, University of Wisconsin.
Walster, E., Walster G.W. & Bershcheid, E. (1978). Equity: Theory and Research. Allyn and Bacon, Inc.
Walster, E.; Traupmann, J.; Walster, G.W. (1978). "Equity and Extramarital Sexuality". Archives of Sexual Behavior. 7 (2): 127–142. :10.1007/BF01542062. PMID 666565. S2CID 25148016.