Adam’s equity theory

Adam's Equity Theory, proposed by psychologist J.S. Adams in 1965, is a motivation theory that suggests individuals are motivated by fairness. It posits that employees compare their input-to-output ratio with that of relevant others (colleagues in similar positions, or even themselves in past jobs).

The basis of the theory is the comparison process:

(Your Inputs / Your Outcomes) vs. (Other's Inputs / Other's Outcomes)
Inputs are what an individual contributes to the relationship or job (e.g., effort, skill, time, loyalty). Outcomes are what they receive in return (e.g., salary, benefits, recognition, status). People strive for their ratio to be equal to the ratio of their comparison referent.

Individuals compare themselves to various "referent groups" or individuals. These can include:

• Self-Inside: The individual's experience in a different position within the same organization.
• Self-Outside: The individual's experience in a position outside the current organization.
• Other-Inside: Another individual or group of individuals within the same organization.
• Other-Outside: Another individual or group of individuals outside the organization.

The choice of referent depends on factors like availability of information and perceived relevance.

According to the theory, perceiving inequity (either being under-rewarded or over-rewarded relative to others) creates tension or distress. This tension motivates the individual to take action to restore a state of equity or fairness. The greater the perceived inequity, the greater the motivation to reduce it.

Individuals may employ several strategies to reduce the tension caused by perceived inequity:

• Alter their inputs: Work less hard, arrive late, take longer breaks.
• Alter their outcomes: Ask for a raise, seek recognition, steal supplies (less common/ethical).
• Distort their perceptions: Convince themselves their effort isn't as high, or the other person's outcomes aren't as good.
• Distort perceptions of others: Rationalize that the other person works harder or deserves more.
• Choose a different referent: Compare themselves to someone else who makes the ratio seem fairer.
• Leave the field: Quit the job or leave the relationship causing the inequity.

These actions are an attempt to bring their perceived input-to-output ratio back into balance with their comparison.

The theory explains motivation by focusing on the desire for fairness. When individuals perceive inequity, they are motivated to act to reduce that tension and restore equity. This motivation can manifest in various behaviors, such as decreasing effort (if under-rewarded) or increasing effort (if over-rewarded, though this is less common and often temporary), or leaving the situation. Fair treatment is seen as a strong motivator for maintaining performance and satisfaction.