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Chapter 9: The Equity Theory.
Equity Theory
What is the definition of the Equity Theory? It is the theory of motivation that focuses on people’s perceptions of the fairness of their work outcomes relative to their work inputs. In the theory, just remember that people perceive the relationship between the outcomes they receive from their jobs and organizations and the inputs they contribute. All in all, people are certainly motivated by fairness.
Recall Inputs
The amount of inputs is considered to be proportionate or relative with the amount of outcomes. But first, let’s recall the definition of inputs. Inputs are anything that a person contributes to his or her job or organization. Some inputs can include: Effort, Loyalty, Hard work, Commitment, Skill, Ability, Adaptability, Flexibility, Tolerance, Determination, Enthusiasm, Trust in superiors, Support of colleagues, and Personal sacrifice.
Recall Outcomes
Likewise, the amount of outcomes is proportionate or relative to the amount of inputs. Now let’s recall the definition of outcomes. Outcomes are what a person gets from a job or organization. Some outcomes Include: Financial rewards (such as salary, benefits, perks), Recognition, Reputation, Responsibility, Sense of achievement, Praise, Stimulus, Sense of advancement/growth, and Job security.
Who Formulated the Equity Theory?
So, who formulated the equity theory? A person named J. Stacy Adams formulated the Equity Theory. He was a workplace and behavioral psychologist and invented the Equity Theory in the 1960s. Adams overall idea was that fairness in addition to equity could form a motivated individual and that if a person perceives equity as a high quality in an organization, then they will be more motivated, but if a person perceives their environment as unfair, then they will most likely be demotivated.
The Referent
In this theory there is a referent. A referent could be another person or a group of people who are perceived to be similar to oneself. A referent could also be oneself in a previous job or one’s expectations about what outcome-input ratios should be.
What is Equity?
All in all, what is equity? Equity is the justice, impartiality, and fairness to which all organizational members are entitled. Remember that the higher the level of inputs is proportional to the higher level of outcomes (outcome-input ratio). BUT, this does not apply to certain situations because if a person receives more outcomes than the referent, the inputs are proportionally higher.
The Importance of Equity
The overall importance of equity in an organization is when equity (or fairness) is present, people are motivated to be persistent with their inputs (or contributions) to the organizations to receive their constant levels of outcomes (or raise, promotion, job security).
What is Inequity?
What is inequity? Inequity is the lack of fairness. It is basically when a person’s outcome-input ratio is not perceived to be equal to a referent’s. There are two types of inequity. Underpayment inequity and Overpayment inequity.
Underpayment Inequity
Underpayment inequity exists when a person perceives that their own outcome-input ratio is less than the ratio of a referent. It is basically when you compare yourself to a referent, you think you are not receiving the outcomes you should be with the amount of inputs that were given.
Restoring Equity
When trying to restore equity in underpayment inequity, people may be motivated to lower their inputs by reducing their working hours, putting forth less effort on the job, or being absent. They may be motivated to increase their outcomes by asking for a raise or a promotion. People can change their perceptions of their own or the referent’s inputs or outcomes.
Overpayment Inequity
Over payment inequity exists when a person perceives that their own outcome-input ratio is greater than the ratio of the referent. This means that when you compare yourself to a referent, you think you are receiving more outcomes than you should with the amount of inputs given.
Restoring Equity
When trying to restore equity in overpayment inequity people can change perceptions of their own or their referent’s inputs or outcomes, people can realize they are contributing more inputs than they originally thought, and people can perceive the referent’s inputs to be lower or the referent’s outcomes to be higher than one originally thought.
Referent, Underpayment, and Overpayment
When talking about underpayment inequity and overpayment inequity, people might decide that their referent is too different from themselves. Choosing the appropriate referent can balance out the ratios.
Equity and Motivation
When tying equity with motivation, the more the people who think that they are being treated with equity in an organization; the motivation is at its highest. The employees that contribute high levels of inputs are highly motivated because they are receiving the outcomes they deserve. The employees that are mediocre realize that if they want to increase their outcomes, they have to increase their inputs.
(CITATIONS ARE IN A DIFFERENT TAB)
Chapter 9: The Equity Theory.
Equity Theory
What is the definition of the Equity Theory? It is the theory of motivation that focuses on people’s perceptions of the fairness of their work outcomes relative to their work inputs. In the theory, just remember that people perceive the relationship between the outcomes they receive from their jobs and organizations and the inputs they contribute. All in all, people are certainly motivated by fairness.
Recall Inputs
The amount of inputs is considered to be proportionate or relative with the amount of outcomes. But first, let’s recall the definition of inputs. Inputs are anything that a person contributes to his or her job or organization. Some inputs can include: Effort, Loyalty, Hard work, Commitment, Skill, Ability, Adaptability, Flexibility, Tolerance, Determination, Enthusiasm, Trust in superiors, Support of colleagues, and Personal sacrifice.
Recall Outcomes
Likewise, the amount of outcomes is proportionate or relative to the amount of inputs. Now let’s recall the definition of outcomes. Outcomes are what a person gets from a job or organization. Some outcomes Include: Financial rewards (such as salary, benefits, perks), Recognition, Reputation, Responsibility, Sense of achievement, Praise, Stimulus, Sense of advancement/growth, and Job security.
Who Formulated the Equity Theory?
So, who formulated the equity theory? A person named J. Stacy Adams formulated the Equity Theory. He was a workplace and behavioral psychologist and invented the Equity Theory in the 1960s. Adams overall idea was that fairness in addition to equity could form a motivated individual and that if a person perceives equity as a high quality in an organization, then they will be more motivated, but if a person perceives their environment as unfair, then they will most likely be demotivated.
The Referent
In this theory there is a referent. A referent could be another person or a group of people who are perceived to be similar to oneself. A referent could also be oneself in a previous job or one’s expectations about what outcome-input ratios should be.
What is Equity?
All in all, what is equity? Equity is the justice, impartiality, and fairness to which all organizational members are entitled. Remember that the higher the level of inputs is proportional to the higher level of outcomes (outcome-input ratio). BUT, this does not apply to certain situations because if a person receives more outcomes than the referent, the inputs are proportionally higher.
The Importance of Equity
The overall importance of equity in an organization is when equity (or fairness) is present, people are motivated to be persistent with their inputs (or contributions) to the organizations to receive their constant levels of outcomes (or raise, promotion, job security).
What is Inequity?
What is inequity? Inequity is the lack of fairness. It is basically when a person’s outcome-input ratio is not perceived to be equal to a referent’s. There are two types of inequity. Underpayment inequity and Overpayment inequity.
Underpayment Inequity
Underpayment inequity exists when a person perceives that their own outcome-input ratio is less than the ratio of a referent. It is basically when you compare yourself to a referent, you think you are not receiving the outcomes you should be with the amount of inputs that were given.
Restoring Equity
When trying to restore equity in underpayment inequity, people may be motivated to lower their inputs by reducing their working hours, putting forth less effort on the job, or being absent. They may be motivated to increase their outcomes by asking for a raise or a promotion. People can change their perceptions of their own or the referent’s inputs or outcomes.
Overpayment Inequity
Over payment inequity exists when a person perceives that their own outcome-input ratio is greater than the ratio of the referent. This means that when you compare yourself to a referent, you think you are receiving more outcomes than you should with the amount of inputs given.
Restoring Equity
When trying to restore equity in overpayment inequity people can change perceptions of their own or their referent’s inputs or outcomes, people can realize they are contributing more inputs than they originally thought, and people can perceive the referent’s inputs to be lower or the referent’s outcomes to be higher than one originally thought.
Referent, Underpayment, and Overpayment
When talking about underpayment inequity and overpayment inequity, people might decide that their referent is too different from themselves. Choosing the appropriate referent can balance out the ratios.
Equity and Motivation
When tying equity with motivation, the more the people who think that they are being treated with equity in an organization; the motivation is at its highest. The employees that contribute high levels of inputs are highly motivated because they are receiving the outcomes they deserve. The employees that are mediocre realize that if they want to increase their outcomes, they have to increase their inputs.
(CITATIONS ARE IN A DIFFERENT TAB)