Sunday, July 25, 2010

Equity Theory

Equity theory has been around just as long as the expectancy theories of work motivation. Credit for equity theory is usually given to J. Stacy Adams, This theory argues that a major input into job performance and satisfaction is the degree of equity that people perceive in their work situation. In other words, equity theory focuses on people's feelings as to how fairly they have been treated when compared withe the treatment receive by others in similar positions.

Inequity occurs when a perosn perceives that the ratio if his outcomes to inputs is not equal to the ratio between the outcomes to inputs of another in a similar position.

Both the inputs and the output of a person and those of another are based upon the person's perceptions. Examples of perceived variables are age, sex, education, social status, organizational position , qualifications and how hard a person works. Outcomes consist primarily of rewards such as pay, status, promotion and intrinsic inters in the job.

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