Equity Theory proposes that a person's motivation is based on what he or she considers to be fair when compared to others (Redmond, 2010). As noted by Gogia (2010), when applied to the workplace, Equity Theory focuses on an employee's work-compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result. Because Equity Theory deals with social relationships and fairness/unfairness, it is also known as The Social Comparisons Theory or Inequity Theory (Gogia, 2010). Equity theory of motivation, developed in the early 1960’s by J. Stacey Adams, recognizes that motivation can be affected through an individual's perception of fair treatment in social exchanges. When compared to other people, individuals want to be compensated fairly for their contributions (the outcomes they experience match their inputs). A person's beliefs in regards to what is fair and what is not fair can affect their motivation, attitudes, and behaviors.
When Mary Jones was first hired she was eager and she had the correct mind sent to do well in her new Job. Her mind-set and drive to perform well, is what led to her 10% raise. However, after her encounter with Sue and hearing about Sue being hired for $5,000 more than Mary was. Mary’s perception of fairness at her workplace has been changed for the worse. After all they both attended the same college and had a similar academic performance in that college. Sue indirectly has become one of Mary’s referent others, everyone seeks a fair balance between what we put into our job and what we get out of it. At this stage Mary’s sense of equity is low and people respond to a feeling of inequity in different ways. Mary’s current response may be to go and confront her boss in the heat of the moment, which would have multiple negative repercussions, if she were to do so. Given the fact that Mary is intelligent, I...
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