Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Business Management & Operations
  • Management, Leadership, & Organizational Behavior

Equity Theory of Motivation - Explained

What is Equity Motivation Theory?

Written by Jason Gordon

Updated at April 8th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is Equity Theory?Individual Reactions

What is Equity Theory?

Pursuant to Equity theory, individuals are motivated by being treated fairly. Perceptions of fairness is generally a result of social comparison. That is, we compare our efforts (inputs) and the results of our effort (outputs) with the efforts and results of others (referents). Each of these is defined below

Back to: BUSINESS MANAGEMENT

  • Inputs - This includes any contribution that an individual makes toward an organized activity. This can include specialized knowledge, experience, tenure at the organization, number of hours, forgone opportunities, task prioritization, etc.
  • Outputs - These are the rewards received as a result of the input. This can include compensation, title, recognition, autonomy, etc.
  • Referent - The referent may be a specific person or a category of people. The important point is that the referent is comparable to the individual employees situation - such as those with similar positions, titles, roles, etc.

It is important to understand that the perceptions regarding inputs and outputs are subjective. They may be based in reality or a result of misunderstanding or bias. 

If we believe that our ratio of input to output does not align with or equal the input to output ratio of others, then it is not fair. Perceptions of inequity drive actions to reduce inequity. 

Individual Reactions

The Equity Theory identifies numerous potential reactions to the perceived inequity.

  • Distort Perceptions - Look at the situation differently to justify the inequity in the input/output ratio.
  • Increase Inputs - This could mean working harder, gaining more skills, etc.
  • Reduce Inputs - This could mean working less or reducing the quality of the work.
  • Increasing Outputs - This can include negotiating more compensation, responsibility, title, recognition, autonomy, etc.
  • Change Referent - This involves changing to whom you compare yourself.
  • Leave the Situation - This generally means quitting the job.
  • Seek Legal Action - Pursue a legal action for an identified form of discrimination based upon being in a protected class of individuals.

An interesting aspect of equity theory is that the same reactions are not generally present when an individual feels that they are over-rewarded (more output) than is otherwise deserved or warranted based upon the input. In summary, people just do not react negatively to being overcompensated.

equity theory

Was this article helpful?

Yes
No

Related Articles

  • Needs-Based Theories of Motivation - Explained
  • Paradigm Shift - Explained
  • Activity-Based Management - Explained
  • Texas Sharpshooter Fallacy - Explained



©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand