Motivation and emotion/Book/2022/Equity theory

Equity theory:
What is equity theory and how can it be applied?

Multimedia presentation (3 min)

Overview

Inputs (work, skill level etc.) and outputs (salary, benefits etc.) must be balanced. The scales are a symbol of that ideal balance.

Equity theory is the understanding that people need and want to be treated equally, but it is also tied to how people are motivated in the workplace through their own inputs and outputs. This chapter discusses what equity theory is, why motivation is an important factor of it, the components of this theory and how it can be applied.

Equity theory is a theory that is used to understand why people are motivated primarily in the workplace it implement a benefit-cost method where what a person inputs into their work is met with equal outputs (outcomes). This is used to explain that when a person does not perceive their inputs to be equal with there outputs, a lack of motivation is experienced along with other negative results such as burnout. Equity theory is also thought to include multiple dimensions relating to where a person is experiencing feelings of inequity, with these dimensions include racial, gender, age and disability related inequity.

Focus questions: What are inputs and outputs and how do they impact motivation? What components make up equity theory? What are the effects of applying equity theory?

What is equity theory?

Equity theory was developed through the perception that all people want and need to be treated equally. Early models of the theory focus on an employer, employee relationships focusing on pay determining that is a heavy impact on work motivation and attitudes about the workplace. This was first introduced by Williams in 1920 with the publication of his book, "What's on the Worker's Mind”, which  was an early equity based theory that outlined the motivation of workers being pay (Gossett, 2011). This view of the worker however remained overlooked until the early 1950’s where the concept of equity was discussed by Leon Festinger, a sociologist (Gossett, 2011). This is thought to have a heavy influence on some of the 36 observations made by Jacques, another sociologist in 1961 (Gossett, 2011). Five of his observations have a direct link with equity theory and the language used such as ‘unconscious’ and ‘intuitively’ have provided the foundation and language that John Stacey Adams' incorporated into his own work citing and drawing influence from the previous researchers (Gossett, 2011).

John Stacey Adams

John Stacey Adams, an industrial organisational psychologist (Hatfield & Rapson, 2011), considered the founder of equity theory, suggested that there were more elements to equity theory that were not based solely on the workplace (Gossett, 2011).  A notable contribution that Adams made to equity theory was the introduction of inputs and outputs. Adams argued that the workers attempted to maintain equity between their inputs (time, effort and sacrifice etc.) and the outputs they received (security, salary, benefits etc.) (Hatfield & Rapson, 2011). Adams also theorised that people compare these inputs and outputs to that of their superiors and peers finding that if a person deems their input to not have equal weight to their output, or that their superiors / peers are not contributing what they deem to be equal work, they would be less motivated to work (Hatfield & Rapson, 2011).  Adams theory can be summarised though perceived equity, if an inequity exist the lack of motivation of the employees part has caused the review on how a leader can increase motivation among their subordinates, this could be the requirement of reducing the expected personal inputs or increasing the outcomes (Swain et al, 2020).

This frame of thought however, has been misused where comparison can be misguided, for example a low-level worker with less than 2 years’ experience is not expected to complete the same work as their manager who has over 10 years’ experience, and therefore should to compare themselves or their received outputs (Swain et al, 2020).

Inputs and outputs

INPUTS (what a person contributes)	OUTPUTS (what a person receives for their contributions
Time	Salary
Effort	Praise
Loyalty	Rewards
Enthusiasm	Recognition
Personal Sacrifice	Job security / promotions

Quiz

1 Who is considered to the be founder of equity theory?

	John Stacey Adams
	Leon Festinger
	Williams
	Jacques

2 Which of the following is not an INPUT

	Effort
	Salary
	Time
	Personal sacrifice

Equity theory to prevent burnout

Burnout is a specific type of occupational stress reaction and is the result of emotional exhaustion, depersonalisation and reduced satisfaction with personal goals (Bakker et al, 2008). Burnout often impacts people who are in high demanding, stressful jobs like nursing, police work or a physician or in jobs where it is difficult to rise ranks or a feeling of lack of control, retail worker (Bakker et al, 2008). According to equity theory, the way people evaluate relationships with reference to inputs and outputs (investments and outcomes) is central to feelings of equity and where these relationships are considered to be inequitable feelings of distress and depression can arise (Bakker et al, 2008), this could be a contributing factor of burnout. Therefore, if an individual feels that their inputs are not equal to the outputs they are receiving they begin to feel neglected, this can be seen as a lack of reciprocity, they are not being met with what they feel they are owed (Bakker et al, 2008). The lack of reciprocity especially in a work environment leaves the individual feeling exhausted emotionally, becoming depersonalised and ultimately become dissatisfied with their personal goals (Bakker et al, 2008). These are all signs that a person is experiencing burnout, and have an adverse effect on an individual’s mental health and physical health.

Referent groups

Referent groups refer to who a person compares themselves with and is an important aspect of equity theory. The comparisons that individuals make within themselves and externally are factors of how a person perceives they are being treated and if that treatment is equitable (Gossett, 2011).

Dimension 1

The internal structure of pay.

These structures are utilised in every organised job and is a determination of payment by the level or grade of an employee salary determined by the job type (Carrell & Dittrich, 1978). Typically there is a salary range for each grade, bracketed by a minimum and maximum salary amount. This dimension of equity finds the person comparing themselves to others in similar employment levels and if the individual perceives that they are not receiving adequate pay in relation to their job and others are they have increased feelings of inequity.

Dimension 2

The fairness of one’s treatment compared to people external of the organisation.

This dimension is the perception of others in other organisations and how they are being treated in comparison to how the individual is being treated (Carrell & Dittrich, 1978). If there is a perception that people externally are treated better in similar positions the individual will have an increased feeling of inequity and be less motivated in their job (Carrell & Dittrich, 1978).

Dimension 3

Internal administration of reward is the final dimension.

Given the structure and relationship which superiors to the individual it must be evaluated if the rewards that can be given out are given out in an equitable way (Carrell & Dittrich, 1978). This is a comparison to people who work closely with the individual themselves, if there is a perception of bias within the company or the lack of ability to access rewards the motivation of that individual could reduce (Carrell & Dittrich, 1978).  

Application of equity theory

Equity theory is used unconsciously by most people in everyday life, most notably in the workplace where individuals are constantly using outside factors such as salary and benefits to have an effect on their performance (Gossett, 2011). It is also apparent that individuals often compare themselves with others and if there is a deemed inequity based on their perception, for example someone who is doing the same job is receiving a higher salary (Swain et al, 2020). There are two effects the individual may find themselves to be unmotivated to continue the work, or that they are motivated to aim for a higher salary themselves.

Case studies

A study conducted by Miles et al aimed to understand the cost-benefit ratio and how this impacts students motivation to learn using the equity theory as foundation for this experiment (Miles et al, 2015). Undergraduate students from an American Midwest private university enrolled in a mid-level clinical or abnormal psychology unit. Final sample of consisted of 68 participants, 51(Female), 16(Male) and 1(Other) . mean age was 20.54, with a range from 18-25 years (Miles et al, 2015). Students had to complete 3 hours of research participation over the semester with an average of 5.64 hours and were provided with at 39-item self-report measure to assess the student’s view on class research participation and their motivation to participate (Miles et al, 2015). This experiment was conducted to provide a within-subjects comparison when identifying costs and benefits regarding, academic experiences and attending classes (Miles et al, 2015). That the average attendance cost-benefit ratio across all participants was 1.85, which implies that students found attending class came with more benefits than costs (Miles et al, 2015). That the more research the student participated in the greater value they placed on perceived costs (inputs) (Miles et al, 2015). The study demonstrated that where there is a perception that going to class (input) would have a benefit on the overall understanding on the topic (output) and those are deemed to be of equal value by the student the student would record that going to class benefited them.

A study conducted aimed to apply equity theory to staff working with individuals with intellectual disabilities. To use equity theory as a starting point in research to help develop more inclusive theories for to eliminate feelings of inequity in the workplace (Disley et al, 2009). The study included the systematic review of papers which related to equity perceptions amongst staff in intellectual disabilities services to determine what their perception of equity in the workplace was (Disley et al, 2009). Six different studies were identified to have a connection and the association between equity and burnout in nurses was investigated (Disley et al, 2009). It was found that a minority of the sample felt some degree of inequity, as these staff members were found to have an overall high level of burnout, which high levels of emotional exhaustion, depersonalisation and low levels of personal accomplishment (Disley et al, 2009). A second study after conducted included measures to allow the focus on positive inequity (Disley et al, 2009). Positive inequity is the feeling of being advantaged where the individual perceives to be getting more outputs then what the input. However it was found that those experiencing positive equity had higher levels of burnout (Disley et al, 2009). This finding could amount to the understanding that feelings of positive inequity could produce high levels of expectations of the staff and become increasingly more stressful (Disley et al, 2009).

Quiz

1 Which is not a positive predictor of burnout?="()"

	depersonalisation
	lower satisfaction with personal goals
	work life balance
	emotional exhaustion

2 Positive inequity is when a persons input is more than their outputs (outcomes)

	True
	False

Conclusion

Equity theory is a theory of motivation that is aimed to explain how a person can be motivated and what happens if a person does not perceive equity in their life. The application of equity theory has been used in multiple research papers and has a heavy link with burnout. Burnout is critical element of a person not feeling appreciated, overworked, stressed and leads to a decline in mental and physical health resulting in lowered motivation. Equity theory is an important theory of motivation as it provides examples of what a person deems equitable, and how the balance of inputs and outputs are vital to this theory and the wellbeing of an individual. Further research could be conducted to further enhance our understanding of equity theory in the workplace, but also how equity theory could be present in everyday life and relationships.

See also

John Stacey Adams - link to wikipedia page about equity theory

Equity theory - link to wikipedia page about equity theory

Burnout - link to wikipedia page about burnout

References

Bakker, A. B., Schaufeli, W.B., Demerouti, E., Janssen, P. P. M., Van Der Hulst, R. & Brouwer, J. (2008) Using equity theory to examine the difference between burnout and depression. 13(3), 247-268, DOI: 10.1080/10615800008549265

Carrell, M.R., & Dittrich, J.E (1978). Equity theory: the recent literature, methodological considerations, and new directions. Academy of Management Review 202-208 https://web-p-ebscohost-com.ezproxy.canberra.edu.au/ehost/pdfviewer/pdfviewer?vid=0&sid=dd11d398-dd97-4aa2-9728-46fae9cd9138%40redis

Disley, P., Hatton, C. & Dagnan, D. (2009) Applying equity theory to staff working with individuals with intellectual disabilities. Journal of Intellectual & developmental disability. 34(1), 55-66, DOI: 10.1080/13668250802684701

Gossett, K.R. (2011) An examination of referent group identification and its effect on equity sensitivity levels among employees. Anderson University https://www.proquest.com/docview/929298420/fulltextPDF/ADB35D0CD9454599PQ/1?accountid=28889

Hatfield, E. & Rapson, R.L. (2011) Equity theory in close relationships. Handbook of theories of social psychology 1(2) 200-215. ISBN: 9781446250075

Lawler, E. E. (1968). Equity theory as a predictor of productivity and work quality. Psychological Bulletin 70(6), 596-610. https://doi.org/10.1037/h0026848

Miles, S.R., Cromer, L.D, & Narayan, A. (2015). Applying equity theory to students’ perceptions of research participation requirements. Teaching of Psychology 42(4), 349-356. https://doi-org.ezproxy.canberra.edu.au/10.1177/0098628315603252

Steel, P. & König, C.J (2006). Integrating theories of motivation. Academy of Management Review 3(4), 889-913. https://web-p-ebscohost-com.ezproxy.canberra.edu.au/ehost/pdfviewer/pdfviewer?vid=0&sid=7b0541b6-7c9e-438e-ad53-d89a60ae7506%40redis

Swain, J., Kumlien, K. & Bond, A. (2020). An experiential exercise for teaching theories of work motivation: using a game to teach equity and expectancy theories. Organization Management Journal (3), 119-132. Doi: 10.1108/OMJ-06-2019-0742

External links

Equity theory - youtube video of a brief introduction to equity theory and John Stacey Adams

experiencing burnout - youtube video on how to prevent burnout.

Keeping employees motivated - article about keeping motivation in employees using equity theory