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Adam’s Equity Theory of Motivation in the Workplace - Explained - HRDQ

Adam’s Equity Theory of Motivation in the Workplace - Explained

What drives people to perform with a high level of commitment and focus? What discourages people from having the energy and enthusiasm necessary to achieve a goal?

Sociologists, psychologists, and other professionals specializing in understanding people have long been trying to understand what motivates people. Though each motivation theory on its own can be limited in scope, gaining a better understanding of the key ideas behind each one can help you build a holistic view of employee motivation.

In this post, we're going to take a look at Adam's equity theory of motivation and how it can be used in the workplace. In short, this theory proposes that workers are motivated by perceived fairness in relation to what they contribute to an organization and what benefits they receive in return.

What Is Adam's Equity Theory of Motivation?

First developed by a workplace and behavioral psychologist named John Stacy Adams, Adam's equity theory focuses on determining whether the costs and rewards for each individual working for an organization are fair.

Adams believed that employees desire to maintain equity between their contributions to a role and the benefits they receive compared to the contributions and benefits of others in the organization.

His theory proposes that workers will be unhappy if there are inequalities in relationships, and their dissatisfaction will be proportionate to the amount of inequality. One of the guiding principles of this theory is that people value fair treatment, and they will be motivated to maintain this fairness.

A Motivated Team

Equity theory is based on the Social Exchange theory, which is a theory that was proposed by the American sociologist George Homans. The central concept behind this theory is based on the idea that a process of cost-benefit analysis is an integral part of the relationship between two people.

Adam's theory is just one of the many theories of motivation that people have proposed and used in relation to managing employees. Other well-known motivation theories include Maslow's hierarchy of needs, McClelland's achievement motivation theory, Herzberg's motivation-hygiene theory, and reinforcement theory.

Motivation theories are commonly separated into different categories: content theories, process theories, and cognitive theories. Adam's equity theory of motivation is considered a process theory, which means that it aims to explain how motivation occurs and how an individual's motives will change over time.

Contributions and Benefits of Adam's Equity Theory

Based on the equity theory of motivation developed by John Stacy Adams, the relationship between a worker's inputs and outputs are vital for their sense of how fairly they are being treated and that the perceived amount of fairness is directly related to a person's motivation.

Employees Being Treated Fairly

In this theory, inputs are also referred to as contributions or costs, while outputs are referred to as benefits or rewards.

Contributions (Inputs)

The contributions an individual makes are all of the things that they do to help a company or organization reach its goals. That includes the amount of time a person spends productively working but is not, by any means, limited to an individual's hours worked.

Employees Productively Working

There's actually a long list of factors that a worker might consider inputs. These include:

  • Time
  • Prior experience
  • Education
  • Loyalty
  • Effort
  • Resilience
  • Personal sacrifice
  • Enthusiasm
  • Commitment
  • Adaptability
  • Determination
  • Flexibility
  • Enthusiasm
  • Support of others
  • Tolerance
  • Willingness to follow leaders

As you can see, the contributions an employee makes to an organization consist of both physical labor and what might be considered emotional labor.

Benefits (Outputs)

The benefits an individual receives as a part of their role are perceived as being the result of aiding an organization in reaching its goals. All the things a worker receives from the organization they are employed with or agents of that organization are considered benefits, also referred to as outputs or rewards.

The most apparent benefit that an organization gives to its employees is the financial reward they receive for their time, whether it is a salary or an hourly wage. Beyond that, though, there are many additional factors that are perceived as rewards, including:

  • Salary or hourly pay
  • Benefits and perks
  • Bonuses
  • Pension
  • Responsibility
  • Promotions
  • Structure and routine
  • Recognition
  • Performance Appraisals
  • Job security
  • Stimulating work
  • Education and development
  • A sense of community
  • A sense of purpose
  • The opportunity to progress

Anything an employee perceives as a positive benefit to their life that they receive from an organization is considered a benefit.

Leader Rewarding an Employee

Another factor influencing a person's sense of fairness in the workplace is favoritism. Avoiding favoritism in the workplace is vital to promoting a culture of equity and fairness.

Determining how best to motivate your employees to boost productivity, reduce turnover, and improve your company culture can be a difficult task. Check out this list of employee motivators to learn more about what drives individuals to do their best work.

Factors That Impact Equity Theory

According to Adam's theory, two primary factors influence an employee's perception of fairness.

A Group of Employees

These factors are comparison groups (also known as referent groups) and moderating variables.

Comparison Groups

Comparison groups, or referents, are the comparisons that a worker can make to evaluate the outcome they are receiving. There are four main comparisons that an employee can make, which are:

  • Self-inside: Consists of an employee's experience in a different role within the organization they currently work for.
  • Self-outside: Involves an employee's experience in other roles while working for other organizations.
  • Other-inside: Includes the comparison of the contributions and benefits of another employee working for the same organization.
  • Other-outside: Involves the comparison of the contributions and benefits of employees in similar roles at different organizations.

In Adam's theory, employees will use one or several of these comparison groups to determine whether their employer treats them fairly.

Comparison Groups

For example, let's say an employee came from an organization where they were consistently praised for their work and is now working for a company that doesn't offer much recognition. That could influence a worker to perceive their current employer as treating them unfairly.

On the other hand, a worker that previously worked at a company where they received much less financial compensation for a similar role as the one they are currently performing might perceive their current employer to be treating them fairly.

Moderating Variables

In addition to referent groups, moderating variables are another factor that influences the perception of fairness by an employee.

Examples of moderating variables include a worker's experience level or education.

Workers Discussing Organization Treatment

For instance, a person that has advanced degrees might have an extensive network of other individuals in their field. This network of connections might mean that they make other-outside comparisons to gauge how fairly they are being treated by their current organization.

Generally, employees that don't have much experience in their company or field will rely on personal knowledge to make judgments about fairness. Experienced employees, on the other hand, are typically much more likely to make additional comparisons.

The Negative Effects of Perceived Unfairness

In Adam's theory, individuals experience distress when they perceive the benefits they receive in exchange for their contributions to be unfair. The amount of distress a person feels is directly related to the amount of unfairness they perceive.

Team of Employees Contributing

In general, people will try to return circumstances to a state of fairness when they believe it is unfair. There are two ways this can be achieved– either by adjusting the contribution levels or adjusting the perception of how much is being contributed.

Workers That Feel Over-Compensated

You might think that a person who believes they are being overcompensated for their contributions would be far from distressed, but this isn't what Adam's theory proposes.

In reality, individuals will often feel a sense of guilt or shame when they perceive that they are receiving more rewards than is fair based on their inputs. In these situations, the individual might seek to create balance and reintroduce a sense of fairness.

There are a few different ways they can do this. One is by increasing their contributions without seeking additional benefits. This approach can help the individual feel that their reward is fairly earned and can benefit the worker, their peers, and the organization.

Worker Feeling Over-Compensated

Another way to address this problem isn't quite as healthy. Instead of increasing their inputs, they could adjust their perception of their inputs' value. This is something that can happen unconsciously without the awareness of the individual through a process known as cognitive distortion.

The way that a person can unconsciously use cognitive distortion to seek fairness can result from two different changes in perception, which are:

  • Deflating their perception of the contributions that other people are making.
  • Inflating their perception of the contributions they are making.

This method does help an individual resolve the perceived unfairness of being overcompensated. That being said, this is a fragile state that is generally unhealthy in the long run. When the employee finds themselves in a new peer group, they might be confronted with the reality that they had distorted their perception previously.

Workers That Feel Under Compensated

Unfortunately, feeling under-compensated, undervalued, or underappreciated is not a rare workplace occurrence. Most people can relate to this feeling at some point in their careers.

Experiencing distress due to perceiving this type of unfairness is understandable. An individual might feel angry, humiliated, or degraded, or they might feel a deep frustration because of a sense of injustice.

According to Adam's theory, an individual will try and reintroduce fairness in various ways.

Worker Feeling Under Compensated

For one, they might try to alter their inputs or outputs to create a just circumstance. In terms of changing their rewards, they might get a new job that gives them a fair output or renegotiate with their current organization.

On the other hand, they might reduce their contributions to the organization until they believe that it is in line with the rewards they are receiving.

Another strategy is to change one's perception through cognitive distortion. They might deflate the perception of their contribution's value or inflate the value of their peer's contributions.

Critical Points for Managers to Consider

When you're responsible for managing a team, there are several key points you'll want to keep in mind when applying Adam's theory of motivation.

  • Individuals will measure their total contributions against their total rewards.
  • A vital role in fairness is social comparison.
  • It is common and appropriate for senior employees to receive a higher salary than more junior employees. However, the difference must still be perceived as fair if you want to avoid demotivation.
  • An employee that feels they are under-compensated or undervalued might reduce their inputs, while an employee that receives recognition and higher compensation might increase their effort.

It's also important to be mindful of all of the different ways that partiality and inequality can be reduced and eliminated from the workplace.

Applying Adam's Theory of Motivation

According to Adam's theory, this can occur when there is a change in individual inputs or outputs, when there is a change in the inputs or outputs of others in relation to an employee, or when the perception of inputs and outputs is changed.

Applying Motivation Theories to the Workplace

There are many different motivational theories that you can learn from as a leader. The deeper you dive into the world of understanding what motivates employees, the more complete your perspective will be on the various factors that can drive individuals to achieve goals and do their best work.

As a business owner or manager, you are likely aware of perceived fairness in the workplace. After all, the focus of your employees can shift away from giving their all toward your organization's growth and success when they know that there is a lack of equity within the company. This can be the case whether they believe they are being under-compensated or over-compensated.

Leader Applying a Motivation Theory

An essential tool to help you understand whether your workers are receiving equal and fair treatment is self-awareness. This is because fairness isn't just about equal pay or equal opportunities for growth in an organization. It's also about more subtle and subjective factors like praise, recognition, and the presence or lack of favoritism in the workplace.

If you want to gain more insight into your leadership style, you'll want to check out our management development tool, What's My Leadership Style. Through this tool, assessment, and workshop, you'll benefit from a greater understanding of your strengths, trouble spots, and growth opportunities.

Do you have any questions about Adam's equity theory of motivation, or was there anything we mentioned that you'd like additional clarification on? If so, leave us a comment down below, and we'll be sure to reply within a day or two! We'll gladly help you out however we can!

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About our author

Bradford R. Glaser

Brad is President and CEO of HRDQ, a publisher of soft-skills learning solutions, and HRDQ-U, an online community for learning professionals hosting webinars, workshops, and podcasts. His 35+ years of experience in adult learning and development have fostered his passion for improving the performance of organizations, teams, and individuals.