What is Adam’s Equity Motivation Theory? & its interesting aspects.

Introduction of Adam’s Equity Theory of Motivation

• The theory developed by John Stacey Adams (1963), a workplace and behavioral psychologist.
• Adam’s Equity Theory of Motivation is Process theories of motivation.
• It explain how workers select behavioural actions to meet their needs and determines their choices.
• The Process theories of motivation offer advice and insight on
  • • How people actually make choices to work hard or not work hard,
    • Based on their individual performances,
    • The available rewards and the possible work outcomes.
• As Locke & Latham defined work motivation as the internal force that drives a worker to action as well as the external factors that encourage that action.
• John Adams (1965) emphasized that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it, against the perceived inputs and outcomes of others.
• For example
  • “Suraj gets more than I do, but doesn’t do nearly as much work!”
  • “I get paid a lot less than Ravi, but this company would fall apart without me!”
  • “Did you hear that the new girl Twinkle earns $500 more and works lesser hours! How is that fair?”

Premise of Adam’s Equity Theory of Motivation –

• Our levels of motivation and job satisfaction are related to how fairly we believe we are treated in comparison with others.
• If we believe we are treated unfairly, we attempt to change our beliefs or behaviors until the situation appears to be fair.
• Three components are involved in this perception of fairness :

1. 1. 1. Inputs-  Personal elements that person put into the jobs.
      2. Outputs- Elements that persson receive from the jobs.
      3. Input/output Ratio.

Inputs of Adam’s Equity Theory of Motivation

• • • Time- Hours worked
    • Education qualification
    • Commitment to the job
    • Experience
    • Enthusiasm
    • Personal Sacrifice
    • Demonstrated Loyalty
    • Flexibility to work
    • etc

Outputs / outcomes of Adam’s Equity Theory of Motivation

• • • Pay -Salary, Bonus
    • Different allowance
    • Recognition
    • Promotion
    • Performance appraisals
    • Stock options
    • Flexibility of work arrangements
    • Sense of achievement
    • Learning, etc

Input/output Ratio of Adam’s Equity Theory of Motivation

Adam’s Equity theory

• Employees subconsciously list all their outputs & inputs and then compute an input/output ratio by dividing output value by input value.
• This ratio is not especially useful.

Four referent groups for Adam’s Equity Theory of Motivation

1. Self-inside:
   • The individual’s experience within their current organization.
2. Self-outside:
   • The individual’s experience with other organizations.
3. Others-inside:
   • others within current organization.
4. Others-outside:
   • others outside of the individual organization.

Propositions/ Suggestions of Adam’s Equity Theory of Motivation

1.Individuals seek to maximize their outcomes (where, Outcomes = Rewards – Costs)

2.Groups can maximize collective rewards by developing accepted systems for equitably apportioning rewards and costs among members.

• • Systems of equity will develop within groups, and members will try to induce other members to accept and follow to these systems.
  • The only way groups can induce members to equitably behave is by making it more profitable to behave equitably than inequitably.
  • Thus, groups will generally reward members who treat others equitably and generally punish (increase the cost for) members who treat others inequitably.

3.When individuals find themselves participating in inequitable relationships, they become distressed.

• • The more inequitable the relationship, the more distress individuals feel.
  • According to equity theory, both the person who gets “too much” and “too little” feel distressed.
  • The person who gets too much may feel guilt or shame.
  • The person who gets too little may feel angry or humiliated.

4.Individuals who perceive that they are in an inequitable relationship attempt to eliminate their distress by restoring equity.

• • The greater the inequity, the more distress people feel and the more they try to restore equity. (Walster, Traupmann and Walster, 1978)

Three primary assumptions of  Adam’s Equity Theory of Motivation

1.“Equity norm”-  Employees anticipate a fair return for what they contribute to their jobs.

2.“Social Comparison”- Employees define what their equitable return should be after comparing their inputs and outcomes with those of their coworkers.

3.“Cognitive Distortion”- Employees who perceive themselves as being in an inequitable situation will seek to reduce the inequity either by distorting inputs and/or outcomes in their own minds by directly altering inputs and/or outputs, or by leaving the organization.

Criticism of Adam’s Equity theory of motivation

• Adams Equity theory has been criticized for both the assumptions and practical application of equity theory.
• Researchers have questioned the simplicity of the model. Their main issues were the theory haven’t considered the number of demographic and psychological variables that have affect people’s perceptions of fairness and interactions with others.
• According to Huseman, Hatfield & Miles (1987) questioned its Environmental validity as the research backups the basic propositions of equity theory has been conducted in laboratory settings, and thus has questionable applicability to real-world situations
• Carrell and Dittrich (1978) argued that people might perceive equity/inequity not only in terms of the specific inputs and outcomes of a relationship, but also in terms of the overall system that determines those inputs and outputs.
• Thus, one might feel that his or her compensation is equitable to other employees’, but one might view the entire compensation system as unfair
• Feight, Ferguson, Rodriguez, & Simmons (2006) found out that supported the idea that our motivation decreases when our input/output ratios are lower than others’
• In a research of basketball players, Harder (1992) found that overpaid players responded by being more team oriented (e.g., assing the ball, rebounding), whereas underpaid players responded by being more selfish (e.g., taking shots).
• O’Reilly and Puffer (1989) found that employees’ motivation increased when coworkers received appropriate sanctions for their behavior. That is, when a high-performing group member was rewarded or a poor performing group member was punished, the satisfaction and motivation of the group increased.

Applications of Adam’s Equity theory of motivation:

• Equity theory is applicable for business managers in most of Industries, Educational Institutions and every institution.
• 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 will have different personal values to inputs and outcomes.
• For instance, two employees of equal experience and qualification performing the same work for the same pay may have quite different perceptions of the fairness of the deal.
• Employees are able to adjust for purchasing power and local market conditions.
• For Illustration an Engineer from India may accept lower compensation than his colleague in USA if his cost of living is different, while a engineer in a African may accept a completely different salary structure.
• Although it may be acceptable for more senior staff to receive higher compensation, there are limits to the balance of the scales of equity and employees can find excessive executive pay demotivating.
• Staff perceptions of inputs and outcomes of themselves and others may be incorrect, and perceptions need to be managed effectively.
• An employee who believes he is overcompensated may increase his effort. However he may also adjust the values that he ascribes to his own personal inputs. It may be that he or she internalizes a sense of superiority and actually decrease his efforts.

References for of Adam’s Equity theory of motivation:

• Aamodt, M.G. (2007). Industrial and organizational psychology: An applied approach. US:
  Thomson & Wadsworth.
• Robbins,S. (2001). Organizational behavior. (9th ed.). New Delhi: Prentice Hall of India
• Mullins, L.J. (2007) 7th ed. Management and organizational behaviour. N.D.:Pearson Edu.