The equity theory of job motivation was established in the 1960s by John Stacey Adams. This theory states that there is a direct link between what employees put into their jobs (inputs) and what they get out of them (outputs). People are best motivated if inputs match outputs giving balanced equity.
The equity theory was created in 1963 by John Stacey Adams, a workplace and behavioural psychologist. It is also known as the Adams equity theory. It assumes that employees are motivated by what they perceive to be fair or unfair. This system works on inputs and outputs -- the employee contributes inputs and the employer rewards with outputs. Job satisfaction levels reach a perfect balance if the employee feels that the two match and that equity has been achieved. Motivation will decrease if contributions exceed rewards or rewards exceed contributions.
Inputs are contributions made by the employee. They include skills, abilities and knowledge and a variety of personal characteristics that are perceived to add value. Individuals may care about how much effort they put in, how committed and loyal they are and how hard they work. Working extra hours when needed, putting job responsibilities over other commitments and supporting colleagues and management also count.
Outputs are the rewards that a company gives to its employees. These include tangibles such as salaries, benefits packages, holiday allowances and bonuses. Intangible rewards are also important. Typically, these include job security, recognition of effort and expertise and being given responsibility, praise and encouragement. It is also important that employees feel their efforts will result in career progression or development.
Equity is achieved when there is a balance between inputs and outputs. If employees feel that they are treated fairly for their work, they will be motivated. If they perceive that they put in more than they get out, they might become distressed and lose motivation. This can also apply if they feel that they are given more than they put in. Motivation can reduce if rewards exceed effort. This can also cause feelings of guilt if an employee feels comparable attention was not paid to a colleague who was more deserving.
Job motivation is not solely based on the inputs and outputs of the employee. External factors also affect judgement on what is fair or unfair. Employees may measure their own situation against the treatment of co-workers and peers within the company. Some will also factor in how they feel people are treated in other companies in a similar role or industry sector. This can, in turn, affect their views on their own equity and, ultimately, their motivation.
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