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Equity Theory in Motivation

Equity Theory, developed by John Stacey Adams, explains how employees assess fairness in the workplace by comparing their input-output ratios with others, impacting motivation and job satisfaction. Perceived inequities can lead to demotivation and reduced effort, while equitable situations enhance motivation. Organizations are encouraged to ensure fair compensation, transparency in rewards, and recognition to maintain a motivated workforce.

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Taj-Mahal Watt
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9 views10 pages

Equity Theory in Motivation

Equity Theory, developed by John Stacey Adams, explains how employees assess fairness in the workplace by comparing their input-output ratios with others, impacting motivation and job satisfaction. Perceived inequities can lead to demotivation and reduced effort, while equitable situations enhance motivation. Organizations are encouraged to ensure fair compensation, transparency in rewards, and recognition to maintain a motivated workforce.

Uploaded by

Taj-Mahal Watt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Equity Theory in Motivation

Understanding Fairness and Workplace Motivation


Introduction

• What is motivation? Motivation is


the force that drives individuals to
act and achieve goals.
• Why is motivation important in
the workplace? It impacts
productivity, employee satisfaction,
and retention.
• Overview of Equity Theory:
Developed by John Stacey Adams,
this theory explains how
perceptions of fairness influence
motivation.
Understanding
Equity Theory

• Definition: Equity Theory states that


employees assess fairness by comparing
their input-output ratio to others.
• Key Components: Inputs: Employee
contributions (effort, skills,
experience).Outputs: Rewards received
(salary, recognition, benefits).
• Comparison: Employees compare their ratio
with colleagues.
• Impact on motivation: If employees
perceive inequity, they may reduce effort,
seek higher compensation, or even leave
the company.
Types of Equity Perceptions

Equitable Situation: Inputs and Under-rewarded Inequity: Over-rewarded Inequity: Employees


outputs are perceived as fair, leading Employees feel undercompensated, receive more than their perceived fair
to motivation and job satisfaction. leading to demotivation and possible share, which can lead to guilt or
dissatisfaction. increased motivation.
Ensuring Fair Compensation:
Workplac Organizations should conduct
salary reviews and performance

e
appraisals.

Applicatio
ns of
Transparency in Rewards:
Clearly communicate promotion
criteria and rewards distribution.

Equity
Theory Recognition and Employee
Feedback: Acknowledge
employees' efforts and
contributions to maintain
perceived fairness.
Example: A Tech Company’s
Compensation Strategy

Case
Study
Issue: Employees discovered pay
disparities, causing dissatisfaction.

Examp Solution: The company introduced


transparent salary bands and
performance-based incentives.

le Outcome: Improved employee trust,


motivation, and productivity.
Challeng Bias in Performance
Evaluations
es in Lack of Transparent Promotion
Criteria
Maintaini Differences in Job Perceptions

ng Solutions:

Equity
• Implement objective performance metrics.
• Conduct regular employee surveys.
• Foster open communication about rewards
and expectations.
Compari
Maslow’s Hierarchy of Needs:
Focuses on fulfilling
psychological and self-growth

son with needs, while Equity Theory is


about fairness.

Other Herzberg’s Two-Factor Theory:

Motivati
Addresses job satisfaction
factors, whereas Equity
Theory deals with perception

on of fairness.

Theories Self-Determination Theory:


Emphasizes autonomy,
competence, and relatedness
rather than external fairness.
Conclusion

• Key Takeaways:
• Employees assess fairness by
comparing their input-output ratio
to others.
• Perceived inequity leads to
dissatisfaction and reduced
motivation.
• Companies should maintain fair
compensation, recognition, and
transparency.
• Call to Action: Organizations must
adopt fairness-driven policies to
maintain a motivated workforce.
References

• Adams, J. S. (1965). Inequity in


Social Exchange. Advances in
Experimental Social Psychology.
• Greenberg, J. (1990).
Organizational Justice:
Yesterday, Today, and Tomorrow.
Journal of Management.
• Robbins, S. P., & Judge, T. A.
(2019). Organizational Behavior.
Pearson.

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