Business & ManagementIB

Adam’s equity theory

Adam’s equity theory...Workers will naturally compare their efforts or rewards to those of others in the workplace....
Adam’s equity theory
  • Workers will naturally compare their efforts or rewards to those of others in the workplace.
  • The degree of equity in an organisation is based on the ratio of inputs (contributions made by the employee) to outcomes (financial and non-financial rewards).

Degrees of equity

Equity norm: workers expect an equitable remuneration for their contribution in their jobs.

Social comparison: workers determine what is fair based on comparisons of their inputs and outcomes with those of their peers.

Cognitive distortions: workers who feel undercompensated become demotivated so might withdraw any goodwill, resulting in altering their effort or outputs.

Drawbacks

  • Equity is subjective.
  • Some people may be more sensitive to equity.
  • Neglects to include demographic, psychological, and cultural variables.
  • Scale of equity can only be so useful.
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