Equity theory: J. Stacy Adams
J. Stacy Adams advanced the theory that perceived inequity can be a motivating state.Equity theory asserts that when people believe that they have been treated unfairly in comparison to others, they try to eliminate the discomfort and restore a perceived sense of equity to the situation.

The perceived inequity occurs whenever a person feels that the rewards received for his/her work efforts are unfair given the rewards others appear to be getting for their work efforts. Perceived equity occurs whenever a person perceives that his/her personal rewards/inputs ratio is equivalent to the rewards/inputs ratio of a comparison other.

Gender equity focuses on the issue of differences in pay between men and women, particularly in jobs traditionally held by males.Comparable worth focuses on the issue of whether people doing jobs of similar value based on required education, training, and skills should receive similar pay.

  • People who feel underpaid experience a sense of anger.
  • People who feel overpaid experience a sense of guilt.
  • People’s possible responses to perceived inequity:

    changing their work inputs by putting less effort into their jobs

  • changing the rewards received by asking for better treatment
  • changing the comparison points to find ways to make things seem better
  • changing the situation by leaving the job.
  • Managerial implications of equity theory

  • Perceptions of rewards in a social context, not the absolute value of the rewards, determine motivational outcomes.
  • Managers should ensure that any negative consequences of the equity comparison are avoided, or at least minimised, when rewards are allocated.
  • Pay is a common source of equity controversies in the workplace and its significance should never be underestimated.
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