Adams's Equity theory

Degree of equity

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The degree of equity in an organization is based on the ratio of inputs

I.
(contributions made by the employee) to outcomes (financial and non-
financial rewards). Typical inputs include expe1tise, experience,
enthusiasm and effort. Outcomes typically include remuneration,
recognition (praise),rank and responsibilities.

Impact of the degree of equity

Adams argued that workers will only be motivated if their input to outcome ratio is seen to be
equitable (fair) in relation to others in the workplace. He suggested that the degree of equity in
the workplacehas a direct impact on the level of motivation on three levels:

' . Workers expect an equitable \Vorkers who feel under

remuneration for their contributions in their c-ompensated (inputs are greater than out-

jobs. Adams proposed that businesses strive to c.omes), become demotivated so might with-

ensure staff perceive equity in the workplace. draw any goodwill. They can seek a balanceby
altering their inputs (such as putting in less
Workers determine what is
effort) and/or outcomes (negotiate a pay rise).
fair based on comparisons of their inputs and
outcomes with those of their peers (co-work-
ers). Inequities exist if those who put in rela-
tively more effort (or have to contribute more
as part of their job) are paid comparatively
less.

If inequities are not dealt with. absenteeism will increase (see Box 2.4.d) and workers can
become dismptive to the organization. In severe cases of inequities, workers might even resign
from their jobs.
Book used to create this poster: Business Management
(Author Paul Hoang), 3rd Edition