This paper will focus on examining equity theory, its propositions and underlying assumptions. Whenever two individuals exchange anything, there is the possibility that one or both of them will feel that the exchange was inequitable. It was first developed in 1963 by John Stacey Adams, a workplace and behavioral psychologist, who asserted that employees seek to maintain equity between the inputs […] It does so, however, at the same time. Perception is a relative term and differs from person to person. According to the equity theory, the level of motivation which an employee depends largely on his opinion of how well or poorly she is being treated with regard to another or other employees. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Equity theory in some sense is related to motivation-hygiene theory, in that it considers both demotivators and motivators. Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. Equity Theory of Motivation Equity Theory was developed by James Stacy Adam. According to J. Stacy Adams (1963: 422):. Adam developed the theory after realizing that equity and fairness are an essential component of individual motivation. According to those studies, the concept of equity In the eleventh century, St. Anselm of Canterbury argued that the will possesses two competing affinities: an affection for what is to a person’s own selfish advantage andan affection for justice.The first inclination may be stronger, but the second matters, too. While this theory was developed more than 50 years ago, it remains very much relevant today. It the ratio is not equal, then emotional responses will occur that will result in the restoration of equity by itself. It is a cognitive-centered theory as it is basically concerned with the person himself, his […] They contend that culture exerts a profound impact on how concerned men and women are with fairness and equity and on how fairness is defined, especially in the realm of gender relationships. EQUITY THEORY Akash Patil CMBA4 2. The core of the equity theory is the principle of balance or equity. 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. Introduction to Equity Theory • First developed in 1963 by John Stacey Adams • 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. The research supports equity predictions in the area of underpayment, but the overpayment effects have not been satisfactorily demonstrated. A critique will follow to determine the falsibility and utility of the theory. Applying Adams’ Equity Theory to employee engagement. The theoretical precision and research related to equity theory, as it is conceived by Adams, are reviewed. Central to equity theory is the notion that equity lies in the eye of the beholder. It is this concept of fair treatment which is the basis for Adams’ Equity Theory. I will examine the research on equity theory in regard to pay since it is assumed to be one of the essential and most important outcomes. Equity theory proposes that individuals who perceive themselves as either underrewarded or overrewarded will experience distress, and that this distress leads to efforts to restore equity. Equity Theory is based on the idea that individuals are motivated by fairness. Looking back over our series, Adams’ equity theory ties in closely with those of Maslow and Herzberg.However, Equity Theory takes a less straightforward and more fluid approach than previous models; the employee can be content with their situation one day, but feel defeated the next. Equity theory is a conceptualization that focuses on the causes and consequences of people’s perceptions of equity and inequity in their relationships with others. Equity theory is based in the idea that individuals are motivated by fairness. If the employee feels that she is being treated equally to or better than the other employees, she is likely to be highly motivated. First proposed by J. Stacy Adams in 1963 and fully developed in a chapter published 2 years later, equity theory draws on earlier social psychological concepts inspired by Fritz Heider’s balance […] Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Post navigation ← Credit Management Policy. [1] Considered one of the Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Equity theory, referred to as Adam’s equity theory, is a motivation model that John Stacy Adam, an American behavioral and workplace psychologist, created in 1963 (John & Chiekezie, 2016). Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. Equity theory of Motivation 1. Finally, there would be summary and recommendations for future research. Equity theory demonstrates that, for most employees, motivation is influenced significantly by relative rewards as well as by absolute rewards, but some key issues are still unclear. 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. Individuals in inequitable situations will do their best in order to eliminate inequity and distress. Equity Theory definition First developed in the early 1960s by behavioural psychologist John S. Adams, equity theory is concerned with defining and measuring the relational satisfaction of employees. Equity theory is a concept where people want the ratio of their outcomes to be nearly equivalent to the ratio of a referent person or a group. Its basic assumption is that a person experiencing inequity encounters a tension state, which then moves the person toward trying to deal with the inequity (West & Wicklund, 1980). The theory is also known as Adam’s Inequity 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. Equity theory in practice dictates that employees will attempt to maximise outcomes (or equal inputs and rewards.) This paper describes a new construct, equity sensitivity, and proposes that reactions to equity/inequity are a function of an individual's preferences for different outcome/input ratios. It was published in the journal, Experimental Social Psychology, 1965, New York titles ‘Inequality in Social Exchange’. Equity theory, too, posits that in personal, social, and societal relationships, two concerns stand out. Adam’s Equity Theory. Equity theory is a concept of human relations based on utility, or the amount of happiness and satisfaction one gets out of any given relationship. It is centered around a cost-benefit analysis of any given relationship. Description: Equity theory is used in parlance of human resource management. Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. Equity theory is considered as one of the justice theories. This theory of motivation states that positive outcomes and high levels of motivation can be expected only when employees perceive their treatment to be fair; hence the balance between the employee's inputs and outputs. 10/29/2020 Equity - Overview Of Equity Theory - Gender, Family, Development, Relationships, and Relationship - JRank Articles 1/7 13 minute read Equity Overview Of Equity Theory As noted above, equity theory is a theory about fairness. Equity theory attempts to explain relational satisfaction in terms of perceptions of fair/unfair distributions of resources within interpersonal relationships. Adams' Equity Theory, which stresses the importance of striking a balance between employee inputs and outputs. The theory of equity has been highlighted in the literature after the seminal work by Adams (1965), followed by others like Deutsch (1975), Leventhal (1980), and more recently by Bakhshi, Kumar, Rani (2009) and Burrus and Mattern (2010). Based on the Maslow's theory and equity theory, according to their characters, the questionnaire aim to find the limitation of these two theories, check whether the two theories follow the real situation. 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). Equity theory, most popularly known as equity theory of motivation, was first developed by John Stacey Adams, a workplace.Equity theory is simple and almost instinctual. While equity theory is a significant step forward, the theory itself needs further specification. Equity Theory posits that if the person perceives that there is inequality, where either their output/input ratio is less than or greater than what they perceive as the output/input ratio of the other person in the relationship, then the person is likely to be distressed. Equity theory is frequently identified as a vital theory for understanding employee motivation. Higher is individual’s perception of fairness, greater is the motivation level and vice versa. Equity Theory Implications Cross-cultural and historical researchers have long been interested in the impact of culture on perceptions of social justice. Equity theory is a study of human perception in terms of proportionate equivalence of the ratio of one person's inputs to the results … Definition. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation fair in their eyes. 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