Equity Theory by J Stacy Adams-Psychology YouTube Lecture Handouts

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Equity Theory by J Stacy Adams - Psychology (Input Output) UPSC NET
  • You do something for me and I will do something for you.
  • Employees will put forward a particular level of effort that they feel compares to the reward potential
  • Input – effort, skills, flexibility loyalty
  • Output – financial compensation, praise and recognition, responsibility, job security
  • When a balance is achieved between inputs and outputs, it is believed that employees will be more satisfied and willing to work toward higher levels of productivity. Many would argue that fairness is something that we should expect out of our employers. When it comes to fairness, employees rely heavily on perception; namely, what do they perceive to be fair and equal?
  • Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Equity is measured by comparing ratio of contributions (or costs) and benefits (or rewards) for each person.
  • Equity theory proposes that we consider not only our own costs and rewards, but the costs and rewards of another person. We prefer that our ratio of costs to rewards be equal to the other person՚s ratio. If one person feels that he or she is getting less, or more, out of the relationship than the other, there will be an instability due to the perceived inequity.
  • It was first developed by J. Stacy Adams in 1960s, a work place and behavioral psychologist. He asserted that employees find equity between the input they bring to the job and the output they receive from this input.
  • After comparison there are three situations:
    • Output & Input of A = Output & Input of B ⇾ Equity is there ⇾ Result: Satisfaction
    • Output & Input of A > Output & Input of B ⇾ Inequity is there due to over rewarded ⇾ Result: Guilt
    • Output & Input of A < Output & Input of B ⇾ Inequity is there due to under rewarded ⇾ Result: Unsatisfaction
    • Self-inside: These individuals seek to maximize their outcomes (where outcomes are defined as rewards minus costs) .
    • Self-outside: Equally apportioning the rewards and costs among group members could maximize collective rewards.
    • Others inside: There can be distress among the group members when there is an inequitable relationship. Over-rewards leads to guilt and shame whereas too little rewards create hate and highly distress among the group members.
    • Other-outside: If there is distress among the group members, it is maintained through restoring equity.
  • When employees՚ experiences inequity he must/should:
    • Change his input or output
    • Choose a different referent
    • Change the self-perception
    • Change perception of others
    • Quit the job