Motivating employees – Adam’s Equity Theory
Adam’s Equity Theory (1963) is based on the psycho-social concept of social comparison, in which individuals base their judgments of their own situation by comparing themselves to a referent other or others. According to this theory, it is the subjective perceptions of the individual making the judgment, not the objective reality, which are paramount in terms of motivation. Specifically, individuals make comparisons of the equity outcomes (the results of their work in the form of pay, promotion, benefits, prestige, job content, etc.) and equity inputs (the amount a worker puts into a job – effort, dedication, education, experience, etc.).
From this analysis, the individual determines a ratio of these equity outcomes to the equity inputs. The individual then makes a cognitive comparison of their determined ratio to their assessed ratio of anther referent individual. It is this comparison that forms the basis of worker satisfaction and motivation. Specifically, if the distribution of benefits is deemed to be inequitable based on the perceived ratio comparisons, an individual will become unsatisfied with their situation and motivation difficulties will result. (Gordon, 2002).
According to the Equity Theory, a perception of equal ratios results in high worker motivation and high levels of productivity. Conversely, if unequal ratios are perceived a worker will respond to the uncomfortable situation by either attempting to adjust his/her inputs or outputs or re-evaluating the perception of inequality. These adjustments are theorized to occur both when the individual judges that they are under-rewarded and when they are over-rewarded.
Specifically, when workers perceive that they are under-rewarded they respond by reducing inputs (i.e., decreasing work efforts, refusing additional responsibility), attempting to increase outputs (i.e., requesting a raise or promotion), re-evaluate on the basis of a new referent person, rationalize the existence of equity or leave the situation (i.e., work for another organization). Similarly, when workers perceive that they are over-rewarded, this theory holds that they will respond according to the “overjustification effect” by increasing inputs, requesting reduced outputs, re-evaluate on the basis of a new referent person, rationalize the existence of equity or leave the situation (Gordon, 2002).
Some aspects of equity theory have been supported by research and make intuitive sense as well. Social psychology has shown us unequivocally that individuals in groups make social comparisons and that their beliefs, feelings and behaviors are affected by the judgments and conclusions they reach. Most workers satisfied with their outputs would naturally become less satisfied with them if they were informed that others of equal status received much greater outputs for the same level of input. In fact, the entire area of workplace discrimination and the examples of associated legal battles speak to the fact that individuals are aware of their treatment in relation to others and that it has significant meaning both individually and to the larger society.
However, social psychology and personality psychology has also shown us that individuals differ in the degree to which social comparison affects them. Equity theory seems to oversimplify the complex nuances of both social interaction and individual cognitive processing. Furthermore, aspects of the overjustification effect seem unrealistic and highly improbable. While workers might increase their effort in response to a belief that they are overcompensated, it is highly unlikely that they would actually ask for a reduction in pay and benefits or leave the company over the issue. In general, the theory has merit and addresses an important aspect of human interaction of which managers should be aware. However, it falls short of a holistic description of worker motivation.
Adams, J.S. (1965). Inequality in social exchange. Advanced Experimental Psychology. 62: 335–343.
Gordon, J. (2002) Organizational behavior: A diagnostics approach, 7e, Hoboken, NJ: Prentice Hall.