Motivation Theory

Adman’s Equity Theory
This theory has been developed by JS Adam’s. The essence of this theory is that employees
generally make comparison of their efforts and rewards with those of others in similar position
and similar work situation. This approach is based on the basic assumption that employees
working in the organisation should be treated equally in terms of justice, balance and fairness
and when they join organisation they carry some qualification, skill and knowledge with them
for performing assigned job. To perform the job which involves use of these abilities and
qualities which are known as ‘inputs’. And in return of these inputs whatever they get from the
organisation such as compensation, recognition position and status, etc. known as outcome.
Adams (1965) defines inequity as “inequity exists for person whenever he perceives that the ratio
of his outcomes to inputs and the ratio of others outcomes to others inputs are unequal”. It follow
that inequity results not only when a person is under-benefited but also when he is over-
benefited. An important issue of the equity theory is the emphasis on the individual perception of
what exists, even though it may not be real. The perception of inequity is based on comparing the
individual’s ratio with the comparison others ratio (e.g., when an employee in another state
receives $4000 more for the same job, no inequity is experienced, but a coworker in the same
company with the same abilities and skills, if he or she receives a pay raise, inequity may be
experienced). The result of inequity is tension. If an individual experiences a deficit, an anger
results, if he or she receives more than others, a feeling of guilt develops. Individuals will use
several strategies to cope with tension and guilt that will be discussed later (Miner, 1980).
Equity theory suggests that overpaid workers avoid any inequity reduction techniques that result
in
a) negative consequences to self-esteem or physical wellbeing or
b) devaluation of a good job outcome such as job satisfaction or monetary compensation.
The preferred method is a psychological justification involving a higher valuation of one’s job
inputs as indicated by the results of the study (Perry, 1993)
When employees are not satisfied with their job they react negatively. This is consistent with
what Adams has predicted in which workers who feel inequitably underpaid may respond by
raising their outcomes.
Equity approach of motivation seems to be useful for the manager in determining appropriate
level of reward the employees. Because it emphasises the role played by an individual’s belief in
the equity and fairness of reward and punishment in determining his performance and
satisfaction.
The Adam’s Equity theory of work motivation is based on the social exchange process. Adam’s
has crystallised it in a more formal way. Basically, the theory points out that people are
motivated to maintain fair relationship between their performance and reward in comparison to
others. There are two assumptions on which the theory works.
1. Individual make contribution (inputs) for which they expect certain rewards (outcomes).
2. Individual decide whether or not a particular exchange is satisfactory, by comparing their

input and outcomes with those of others, and try to rectify an inequality.
Various Types of Inputs and Outcomes

Inputs Outcome
Efforts Pay
Times Promotion
Education Recognition
Experience Security
Training Personal Development
Ideas Benefits
Ability Friendship Opportunity
Exchange relationship between a person’s inputs/outcomes in relation to those of

other persons may be of three types:
1 Overpaid Inequity: In this case, the person perceives that his outcomes are more as
compared to his inputs in relation to others. This relationship can be expressed by
Person’s Outcomes > Other’s Outcomes Person’s
Inputs Other’s Inputs
In this case, the person experiences guilt feeling.
2 Underpaid Inequity: In this case, the person perceives that his outcomes are lower as
compared to his inputs in relation to others. This relationship can be expressed as
Person’s Outcomes < Other’s Outcomes Person’s
Inputs Other’s Inputs
In such relationship, the person experience dissonance
3 Equity: In this case, the person perceives that his outcomes in relation to his inputs are
equal to those of others. This relationship can be expressed by:
Person’s Outcomes = Other’s Outcomes
Person’s Inputs Other’s Inputs
In this case, the person experiences satisfaction. The impact of inequity on the person is as
follows:
1. Perceived inequity creates tension in the person.

2. The amount of tension is proportional to the magnitude of inequity.
3. The tension created in the person will motivate him to reduce it.
4. The strength of the motivation to reduce inequity is proportional to the perceived
in equity.
Equity theory is considered to be one of the most valid frameworks to understand human
attitudes and motivation (Miner, 1984). According to Miner (1980), equity theory has the
following characteristics:
1. Prediction of performance: the evidence of research showed that both over reward and
under reward will have an effect on performance, but the question that remained unanswered is
for how long this effect will last before corrected by cognitive distortion. On balance the theory
seems to predict performance at least for a short period of time.
2. Prediction of work satisfaction: the research done in this area gives strong support for
equity theory. In over-reward situations guilt and dissatisfaction was experienced which led
workers to increase inputs, and under-reward created anger and resentment, which led in many
cases to turnover and absenteeism, and lowering inputs.
3. Construct validity: the central construct of the theory is equity motivation. Or perhaps two
constructs involving guilt or shame reduction and anger reduction. The theory lacks precision in
regard to what factors operate as inputs and what factors operate as outputs and under what
circumstances.
4. Utility: able to predict performance and work satisfaction.
5. Falsibility: the problem of individual, who will respond to inequity stimulation and who
will not. There is also a problem in regard to a comparison other, how it is chosen and why, how
factors come to be viewed as inputs and outputs and why.
Theory Critique
Equity theory has a one major proposition which is the comparison of one’s inputs and outcomes
to others inputs and outcomes and as a result of this comparison one might experience equity or
inequity. This proposition is very clear and parsimonious unlike many theories in the social
science. Every one can understand this theory since it has to deal with our feelings toward equity
and justice. These are very important issues to humans and that is why people will be inclined to
understand this theory more clearly (Rice, 1993)
References
Prof. Sangeeta Pawar and Dr. Mohammad Moghise, Organisational Behaviour Business
Management (PAPER III)
Miner, J. B. (1980a). Theories of organizational behavior. Hinsdale, Ill: Dryden.
Miner, J. B. (1984). The validity and usefulness of theories in an emerging organizational
science. Academy of Management Review, 9, 296-306.
Rice, R. D. (1993). Equity theory: The pay satisfaction

Motivation Theory

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Adman’s Equity Theory

a) negative consequences to self-esteem or physical wellbeing or

b) devaluation of a good job outcome such as job satisfaction or monetary compensation.

2. Individual decide whether or not a particular exchange is satisfactory, by comparing their

Various Types of Inputs and Outcomes

Exchange relationship between a person’s inputs/outcomes in relation to those of

1. Perceived inequity creates tension in the person.

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