Equity theory states that people are more motivated when their compensation matches their efforts. The theory includes factors such as input and output, as well as human perception of what is equal. It applies to various relationships, including the workplace and emotional gratification. The theory explains that people strive for balance and equality.
Equity theory is a concept in psychology that states that human beings will be more motivated if what they receive as compensation equals the efforts they give. John Stacey Adams, a behavioral psychologist, conceived the theory in 1963. In addition to equality itself, the theory also studies human perception and how it affects one’s view of what is equal.
The theory includes several factors, two of which are “input” and “output”. Input can generally refer to an individual’s contribution or effort in a given situation, while output is what the individual gets in return for her contribution. In a familiar environment like the workplace, the input can be the employee’s commitment and hard work to do what is assigned. In return, he receives a fixed salary and perhaps a small bonus as an exit. Fairness theory can also apply to hiring a workforce, where candidates might expect a higher salary that will match their experience and skill levels.
The third important factor in the theory of fairness is human perception. The concept of equality is very subjective and can vary from person to person. One way to determine what is “the same” is to compare similar situations. For example, an employee will assume that a company will provide a certain amount of salary if he sees other rival companies providing the same salary to his employers. Adams has labeled these points of comparison as “referents.”
In addition to the workplace, fairness theory can also be applied in many human relationships. In these situations, hard work and financial returns aren’t the only things included as inputs and outputs, respectively. Emotional gratification can be an important measure for the concept of equality. For example, for a married couple, a wife who makes her husband happy by cooking her favorite dinner might expect her husband to make a similar compromise that will make her equally happy. Conflict can arise if perceived equality is not achieved.
In many situations, equity theory cites the human desire for rewards to match their efforts. For example, an employee asks his boss for a raise if he feels he deserves it. The theory, however, also explains that a person will strive to contribute more to a situation or relationship if he sees that he gets more results than he deserves. Either way, the theory illustrates that humans seek to achieve a sense of balance and equality.
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