Equity Theory of Motivation and Practice

 

Equity Theory of Motivation and Practice

According to Rue and Byars (2005), employee motivation has been a concern for organizational management (Ibinwangi et al, 2016). To be dealt with equitably by employees is to be treated fairly in comparison with another group of people or relevant other people (Armstrong, 2009). Equity theory focuses on two sides: the input and the outcome (Zawahreh and Madi, 2012). It is an employee who compares his or her job’s Inputs with the Outcome ratio. If the employees are treated inequality, he or she will correct to act equity.

In any given situation, equity theory is especially given that there is usually a form of exchange, for example, between couples, teammates, or employer and employee. In these different situations, feelings of inequity may occur. Significantly, how employees perceive transactions between them, and employers may not always be in economic terms but sometimes involves relative justice. In certain cases, employees expect to be treated equally when compared to those of equal rank, particularly in terms of pay and recognition (Gashgari, 2016).

Figure 1.0 – Equity Comparison: Perceived inequity as a motivating state

Source: Sustainable Motivational factors toward the enhancement of employees productivity and efficiency, European Journal of Business and Innovation Research (2016).

According to figure 1.0 shows, the equity comparison. It typically occurs whenever managers allocate extrinsic rewards especially monetary incentives or pay increases. Inequities occur whenever people feel that the rewards received for their work are unfair and given the reward other person appears to be getting (Rahman et al, 2016).

The HR Functions of Recruitment and Selection, Training and Development, Reward Management, Job Analysis, Employee Relations, Employee empowerment, and social support are identified as key factors that determine employees’ job satisfaction and eventually, their job performance and productivity. These factors are viewed as independent variables that determine whether the employees are satisfied and deliver good performance at the workplace. Through Adams’ Equity Theory, the job satisfaction of employees and its relation to the employees’ job performance are rationalized (Mira et al, 2018).

Recent research has expanded the meaning of equity, or fairness. Historically, equity theory focused on distributive justice, the employee’s perceived fairness of the number of rewards among individuals and who received them. But organizational justice draws a bigger picture. Employees perceive their organizations as just when they believe rewards and the way they are distributed are fair (Robbins et al, 2013).

For example, in the organization I work for, equity theory takes place in the below 2 aspects of fulfillment.

Firstly, employees need to feel that the reward they receive for their contribution is intrinsically fair in practice currently.

Secondly, they need to feel that the levels of rewards that they receive (relative to their contributions) are similar to those received by their peers in the organization.

If both of these aspects are passed, then a fair and equitable working arrangement may exist and Consequently, individuals will be motivated as well under the practical application of equity theory.

References

·       Armstrong, M. (2009), Handbook of Human Resource Management Practice, p 327

·       Gashgari, S. (2016). Equity Theory and Its Effect on Performance Outcome, International Journal of Scientific & Engineering Research, Vol 7 (4), (Online) < https://www.ijser.org/researchpaper/Equity-Theory-and-Its-Effect-on-Performance-Outcome.pdf > [Accessed on 21st November 2022]

·       Ibinwangi, O. J., Chiekezie, O. & Comfort, C. N. (2016). Equity Theory of Motivation and Work Performance in Selected South East Universities, Vol 8 (4), (Online) < https://www.researchgate.net/publication/337893583_EQUITY_THEORY_OF_MOTIVATION_AND_WORK_PERFORMANCE_IN_SELECTED_SOUTH_EAST_UNIVERSITIES > [Accessed on 21st November 2022]

·       Mira, M. S., Choong, Y. V., and Thim, C. K. (2018). The Role of Job Satisfaction as Mediator Between Human Resource Practices and Employees' Performance Among the Cargos' Employees at Saudi Ports Authority Based on the Motivation Theories, The Journal of Social Sciences Research, Issue 4, (Online) < https://arpgweb.com/journal/journal/7/special_issue > [Accessed on 22nd  November 2022]

·       Rahman, M.N., Abedin, Z., & Mohiuddin M. (2016). Sustainable Motivational factors toward the enhancement of employees productivity and efficiency, European Journal of Business and Innovation Research, Vol 4 (6), (Online) < https://www.eajournals.org/wp-content/uploads/Sustainable-Motivational-Factors-towards-the-Enhancement-of-Employees-Productivity-and-Efficiency.pdf > [Accessed on 22nd  November 2022]

·        Robbins, S. P., Judge, T. A., and Vohra, N., (2013). Organizational Behavior, 15th edition, pp 233-237.

·       Zawahreh, A.A., and Madi, F.A. (2012). The Utility of Equity Theory in Enhancing  Organizational Effectiveness, European Journal of Economics, Finance and Administrative Sciences, Issue 46, (Online) < https://www.researchgate.net/publication/267783009_The_Utility_of_Equity_Theory_in_Enhancing_Organizational_Effectiveness > [Accessed on 22nd  November 2022]

 

Comments

  1. Manodya PereraDecember 10, 2022 at 2:57 AM

    Well explained Sachini. In addition, Equity theory was first developed in 1963 by John Stacey Adams, while working as a research psychologist with the General Electric Company in Crotonuille, New York. He developed and tested an equity theory of motivation. Equity can be defined as a ratio between the individual’s job inputs (such as effort or skill) and job rewards (such as pay or promotion). People judge the equity of rewards by comparing them either to the rewards other are receiving for similar input or to some other effort reward ratio that occurs to them (Chiekezie, Nzewi & Orogbu 2009).

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    1. Sachini NagahawattaDecember 10, 2022 at 8:10 AM

      Thank you Manodya for your comment. Equity theory states that a person should be concerned about the way rewards are distributed in a group. An equitable distribution gives each person a reward (outcome) that is proportional in their inputs. An example of Equity theory in practice is when a worker discovers that they receive less pay than they feel is appropriate for a particular job or task; they take action to restore equity (Bowman, 2016).

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