The intent of this paper is to discuss some of the current research and opinion concerning, and to compare and contrast the strengths and weaknesses of, one of the more common theories of motivation, the Equity theory. In addition, this paper will compare and contrast the Equity theory with another popular theory of motivation: the Expectancy theory.
Motivational theories receive a great deal of attention in organizational behavior research, primarily because of their purported ability to explain some of the complexities of employee performance and turnover in an organization. Most motivational theories try to integrate external factors (i.e., an organizational compensation system) with internal forces (i.e., personal needs and motives). Some of the structure these theories provide can also be used in a work environment as measuring tools for individual performance in an organization.
In this paper we study a major motivational theory: the Equity theory. We explore the similarities and differences between this theory and two other common theories. We will also consider current research and opinion surrounding this theory and compare its strengths and weaknesses with another common motivational theory, the Expectancy theory.
Adams first talked about Equity theory in 1963 and 1965 (cited in Ambrose & Kulik, 1999). According to Adams, an individual assesses his relationships by analyzing his inputs to the relationship and what he receives in return compared to what other individuals contribute to the relationship and receive in return. At its core, this is a theory that is based on perceived fairness. It is a reasonable, common-sense notion that people want to be treated in a manner that they perceive to be fair, or at the very least, equal to those performing the same tasks.
If the individual thinks that his outcome-to-input ratio is less or more than that of the other individuals in the relationship, then inequity arises and the individual is compelled to restore equity in order for the relationship to remain acceptable. Therefore, inequity can be either positive or negative. An individual perceives negative inequity when his outcome-to-input ratio is less than the other individuals in the relationship, and he perceives positive inequity when the opposite is true. According to Adams, an individual will react negatively whether he perceives his situation to be creating positive or negative inequity. Therefore, individuals will seek to reach equilibrium with the others in their environment.
For example, if one member of the staff works eight hours a day, and another works only seven, and the two are paid the same salary, then that both workers will feel an imbalance. It is then likely that the person working less hours will be uncomfortable with the situation and suggest methods of equalizing the situation (such as cutting the other person's hours to seven as well). Likewise, the individual working eight hours will feel as though the situation is unfair, and may resist by slowing down at work, taking longer breaks, or asking for a raise to create the feeling of equity. In either instance, neither employee will be truly happy until the perceived inequity is resolved.
Although the Equity theory has been shown to be an effective model for some behavior predictions, Scheer et al. (2003), made comparisons between the reactions of Dutch firms and U.S. firms on positive and negative equity to illustrate one of the dangers of assuming the universality of the Equity theory. A test was conducted with a Dutch firm and an American firm to test the assumptions of Equity theory. The presumption that in a perceived negative inequity the individuals would feel angry and a positive inequity would produce feelings of guilt. The study came to the following conclusion:
Our findings indicate that the Dutch firms, on average, do react according to Equity...