How can equity theory motivate employees?
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SPOILER ALERT: The information in this article can be like taking bitter medicine — unpleasant at first with some adverse side effects that you feel immediately. (In other words, you might have an emotional reaction to what I have to say here.) However, if this information applies to you and you consider it objectively, it will make you better in the long run as a leader — just like bitter medicine does. Show
Back to Top Why Workplace Fairness Matters Today Gone are the days when managers can simply command and control employees! Organizations now operate under a pace of change that is unforgiving and unrelenting. Customers through social media now have more power to affect a business’s bottom line and its market reputation. Employees bring different generational expectations that come from different life experiences. Given all of this, it’s not surprising that the lack of employee motivation is a frequent area of concern that managers express to me. While managers do not technically motivate people, they do create an environment that can foster or hinder employee motivation. An important factor in an employee’s internal motivation is his belief about how fair his treatment is and has been in the organization relative to others. Given the uncertainty and intense demands of our new millennium, employees are especially sensitive to issues of fairness and how organizational leaders treat them. Employees know that life is not fair but they expect their boss to be fair! Click To Tweet Back to
Top What is Adam’s Equity TheorySaid another way, an employee will consider the following: Based on what I am giving to this organization (inputs), am I getting the same rewards (outcomes) as others are getting who give similar inputs? Equity theory says that employees view a situation as equitable when employees who give similar inputs receive similar outcomes. When the rewards differ for the same degree of effort, employees view the situation as inequitable. It's hard for an employee to feel motivated in the workplace if he or she feels they were treated unfairly. Click To Tweet Back to Top Why Adam’s Equity Theory is Important to the Workplace
These outcomes harm an organization’s bottom line and where organizational turnover occurs the loss is two-fold (economic and talent based). Clearly, equity theory shows why employee perceptions about fairness do matter. When employees believe that the workplace is unfair, they grow to distrust organizational leadership. When leaders choose to ignore this distrust, employee morale and motivation suffers. Organizations can sow the seeds of inequity and distrust in everyday operational matters. It does not require a leader to have a significant ethical lapse to bring this about. For example, once I worked with an organization that was experiencing significant problems implementing changes that were critical to its long term viability. As I listened to managers at all levels of the organization, it became clear to me why senior leadership was experiencing so much resistance. Through a series of badly executed budget cutbacks and organizational realignments, senior leadership had undermined their effectiveness with managers and employees in the organization. There were numerous stakeholders who felt they had been treated unfairly in the past and they now viewed senior leadership with suspicion. These unaddressed trust issues prevented meaningful organizational change. Equity theory explains how employees determine what is fair and how they act upon their perceptions. Equity theory is supported by research over the years. As a result, employee perceptions about fairness do matter–whether they are real or misguided. For managers it is better to effectively address these concerns than ignore them. Ignoring employees who feel they were treated unfairly will not make their feelings go away. Click To Tweet Back to
Top How to Apply Adam’s Equity Theory to the WorkplaceAs you address workplace fairness issues, keep in mind that rewards have different value to different employees. This makes it vital to both know your people and know how to adjust your leadership style appropriately. However, even given the individual aspects of motivation and workplace rewards, there are some rewards that are generally important to everyone. For example, concerns over pay equity are usually important to every employee as a basic issue of workplace fairness. It’s also important to understand that employee dissatisfaction can arise over perceptions of inequitable treatment in non-basic issues of workplace fairness. For example, it is not uncommon for people to be unhappy because their title is less prestigious than their peers or because they have less autonomy than others in the workplace. Finally, if your organization is undergoing significant change, making special efforts to lead your change effort thoughtfully can help you to avoid generating employee resentment. Employees know that life is not fair but they do expect their boss to be fair. Click To Tweet Back to
Top What Our Own History Teaches Us About Perceptions of FairnessEquity theory says they do! Still need convincing? Our country’s own Hatfields and McCoys feud also says perceptions about what is fair and what is not fair do matter! Ignoring continuing employee resentment about what they perceive as unfairness in the workplace will not make their concerns go away. Left unaddressed, these lingering employee concerns will ultimately harm organizational morale and organizational productivity.
Back to Top Video: Improving Motivation with Adam’s Equity Theory*Music for this video is courtesy of www.musicrevolution.com. Back to Top QuizBack to Top Scholarly Citations for this ArticleBack to Top Motivation in the Workplace Article Series
Back to Top Member Content: Additional ResourcesWritten by Robert Tanner | Copyrighted Material | All Rights Reserved Worldwide This article is accurate to the best of the author’s knowledge. How does equity theory apply to the employees in the workplace?Equity theory can be a model for measuring how satisfied an employee is in their job. According to John S. Adams, your staff try to keep a balance between how much they give to you (inputs), and what they receive from your business in return (outputs).
What is meant by the equity theory in regard to employee motivation?Equity theory is a theory of motivation that suggests that employee motivation at work is driven largely by their sense of fairness. Employees create a mental ledger of the inputs and outcomes of their job and then use this ledger to compare the ratio of their inputs and outputs to others.
Why is equity theory important in the workplace?It matters because equity theory illustrates the balance between how employees feel about their work, and how hard they should work as a result. In the workplace, the first place where can test this surrounds fair pay. Employers have a responsibility to pay employees fairly.
What motivates employees at work expectations or equity?The core of the equity theory is the principle of balance or equity. As per this motivation theory, an individual's motivation level is correlated to his perception of equity, fairness and justice practiced by the management. Higher is individual's perception of fairness, greater is the motivation level and vice versa.
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