When unfairness rears its ugly head, it’s usually accompanied with lack of motivation, lower performance, decreased job satisfaction… Employees expect to be rewarded fairly and comparable to other employees… Most people look for a job that rewards them for what they can bring to the organization that is, skills, abilities, knowledge, loyalty… and, they expect to be rewarded fairly… but unfortunately, fairness is not always achieved. It’s a matter of fairness, which is something that most people want from most aspects of their life, and this is certainly true in the workplace… In the article Equity Theory of Motivation: Reward & Effort by Sherri Hartzell writes: There is a saying y ou scratch my back and I’ll scratch yours… as you may already know or just guessed, the phrase means– if you do something for me then I will, in turn, do something equal for you.
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The Equity Theory can be important tool for assessing employee satisfaction… that is, the employee’s relationship between motivation and productivity… and how to increase employee motivation… For example, consider a case where a hard-working employee believes that they are being paid fair salary, but then become aware that they are in fact one of lowest-paid employees on staff– as you might imagine, this knowledge will most likely lead them to be less motivated… The comparison of these two ratios acts as a reference point for a employee’s motivation… Hence, the Equity Theory works with two factors: First, it involves an employee assessing their ratio of ‘input and output’… Second, it involves the same employee assessing their coworkers ratios of ‘input and output’… In the equation, ‘inputs’ typically include things like: time, hard work, effort, enthusiasm, leadership, initiative, trustworthiness, knowledge, talent, skill, aptitude, disposition/attitude, willingness to change, like-ability, kindness, good looks, status… Outcomes include things that employees look to get out of organizations, for example: recognition, job security, pay and fringe benefits, responsibility, promotion, trusting relationships, perceived upward mobility, and reputation… When one employee compares their ratio of ‘input and output’ to the ratios of ‘input and output’ of other employees, they are in fact supporting the Equity Theory. How the Equity Theory Works: The Equity Theory can be described using the following equation, which compares an employee’s inputs (i.e., what an employee feels they contribute to an organization) with an employees outcomes (i.e., what an employee feels they get from the organization in return). The essence of the Equity Theory is motivation through perceived fairness… However, there is much criticism of the Equity Theory, and they are directed at both the assumptions and practical application for example, scholars question the simplicity of model, arguing that– demographic, psychological variables affect people’s perceptions of fairness and their interactions with other workers… Furthermore, much of the research supporting the basic propositions of the theory has been conducted in laboratory settings, thus have questionable applicability to real-world situations… The Equity Theory states that when a worker compares themselves to their coworkers and finds that the results to be fair, they are more motivated… On other hand, if the comparison with coworkers seems unequal or unfair, they are less motivated… Unlike basic motivation incentives that consists of offering rewards, such as pay, benefits… the Equity Theory looks beyond the worker and includes other factors in the workplace that affects motivation, and it does this through comparisons. The essence of the Equity Theory, invented by John Stacey Adams in 1963, is the principle of fairness and balance where employee’s degree of motivation is correlated to their perception of equity, fairness, justice… practiced by their management in the work place… When workers evaluate fairness they compare their job input to the organization (their contribution) and also their outcome (their rewards) from the organization (a fairness test)… they also compare these– job input and outcome– with the comparable co-workers’ job input and outcome (the balance test)… Given all of this, it’s not surprising the lack of employee motivation is a frequent area of concern… Employees bring different expectations that come from different life experiences. Customers through social media now have much more power to affect a business’s bottom line and its market reputation. Do perceptions matter in the workplace? The Equity Theory states that it does! Left unaddressed, employees’ lingering concerns about fairness, justice… can have a significant effect on employees’ morale, organization productivity…Īccording to Robert Tanner gone are the days when managers just command, control employees… Organizations now operate under a pace of change that is unforgiving and unrelenting.