What is the Adams Equity Theory?

Adams’ Equity Theory calls for a fair balance to be struck between an employee’s inputs (hard work, skill level, acceptance, enthusiasm, and so on) and an employee’s outputs (salary, benefits, intangibles such as recognition, and so on).

What is Adam’s Equity Theory by Stacy Adam?

Stacey Adams’ equity theory is a process model of motivation. It says that the level of reward we receive, compared to our own sense of our contribution, affects our motivation. The theory considers the concept of equality and fairness, as well as the importance of comparison to others.

What is Equity Theory in compensation?

Equity Theory: According to this theory, there should be equity or the uniformity in the pay structure of an employee’s remuneration. If the employee feels he is not being paid fairly for the amount of work he does in a day will result in lower productivity, increased turnover and high absenteeism.

What is the theory by John Adams that explains the employee’s perception?

Equity Theory (Adam’s Equity Theory) explains the thought process an employee uses to determine the fairness of management decision making. The core of equity theory says that individuals judge the fairness of their treatment based on how others like them are treated.

What’s wrong with equity theory?

The first problem is that equity theory employs a unidimensional rather than a multidimensional conception of fairness. The theory conceptualizes perceived justice solely in terms of a merit principle. The second problem is that equity theory considers only the final distribution of reward.

What are the implications of equity theory?

Equity theory has several implications for business managers: People measure the totals of their inputs and outcomes. This means a working mother may accept lower monetary compensation in return for more flexible working hours. Different employees ascribe personal values to inputs and outcomes.

What does the equity theory explain?

Definition: Equity theory, popularly known as Adam’s equity theory, aims to strike a balance between an employee’s input and output in a workplace. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management.

What are the key elements of equity theory?

The equity theory contains two primary components: inputs and outcomes. It is a team member’s perception of these two factors that can influence their motivation levels.

Why is equity theory important?

Equity theory refers to the give-and-take synergy between employee and employer. Understanding equity theory is critical because it explains how employees demonstrate their side of the equation and how an organization can overcome equity problems in the management of personnel.

Why is equity theory important in compensation?

What is an example of equity theory?

Equity Theory – Keeping Employees Motivated. Everyone in the workplace is motivated by something. As an example of equity theory, if an employee learns that a peer doing exactly the same job as them is earning more money, then they may choose to do less work, thus creating fairness in their eyes.