Equity theory states that employees are motivated by fairness and will adjust their work inputs to achieve equitable outcomes compared to their peers. Inputs are contributions made to an organization, while outputs are benefits received in return like salary or recognition. Equity is defined as an individual's outputs divided by their inputs compared to the same ratio for others. If an inequity is perceived, individuals will alter their inputs to restore a balanced equation. Managers can influence perceptions of fairness and manage expectations to minimize perceptions of inequity between employees.
Equity theory states that employees are motivated by fairness and will adjust their work inputs to achieve equitable outcomes compared to their peers. Inputs are contributions made to an organization, while outputs are benefits received in return like salary or recognition. Equity is defined as an individual's outputs divided by their inputs compared to the same ratio for others. If an inequity is perceived, individuals will alter their inputs to restore a balanced equation. Managers can influence perceptions of fairness and manage expectations to minimize perceptions of inequity between employees.
Equity theory states that employees are motivated by fairness and will adjust their work inputs to achieve equitable outcomes compared to their peers. Inputs are contributions made to an organization, while outputs are benefits received in return like salary or recognition. Equity is defined as an individual's outputs divided by their inputs compared to the same ratio for others. If an inequity is perceived, individuals will alter their inputs to restore a balanced equation. Managers can influence perceptions of fairness and manage expectations to minimize perceptions of inequity between employees.
Equity theory states that employees are motivated by fairness and will adjust their work inputs to achieve equitable outcomes compared to their peers. Inputs are contributions made to an organization, while outputs are benefits received in return like salary or recognition. Equity is defined as an individual's outputs divided by their inputs compared to the same ratio for others. If an inequity is perceived, individuals will alter their inputs to restore a balanced equation. Managers can influence perceptions of fairness and manage expectations to minimize perceptions of inequity between employees.
It is perceived equitable rewards are a major input into employee satisfaction. Equity Theory is based on the idea that individuals are motivated by fairness. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation fair in their eyes. if there is fairness they will work harder and also get motivated. we have 2 terms - input and out put ----- Inputs are defined as those things that an individual does in order to receive an output.They are the contribution the individual makes to the organization. Outputs (sometimes referred to as outcomes) are the result an individual receives as a result of their inputs to the organization. Some of these benefits will be tangible, such as salary, but others will be intangible, such as recognition Equity is defined as an individual’s outputs divided by that same person’s inputs. individual output/individual input = others output/ other input Essentially, what we are saying is that individuals will always adjust their inputs so that the equation is always in balance Comparison of the inputs and outputs of the employee and comparison other are similar to those judgments made by employees according to expectancy theory
how we compare : Referent Group
A referent group is simply a collection of people a person uses for the purposes of comparison. 1. Self-inside: the individual’s experience within their current organization. 2. Self-outside: the individual’s experience with other organizations. 3. Others-inside: others within the individual’s current organization. 4. Others-outside: others outside of the individual organization.
you can even compare your job with a person who have another job
Methods of Restoring Equity:
1. alter input : increase or decrease 2. alter outcome with out impacting the input. this might be increasing salary, or decreasing work hours.. 3. cognitively distort input or output : believing you deserve great because you have more skill, knowledge... or believing that others are better than you 4. change the other comparison : compare yourself to someone less than you 5. ???? 6. leave the organization
the key points
People measure the total of all inputs against the total of all outputs. This could mean that a person with children may accept flexible working hours in return for lower pay. Unfortunately, an individual’s values will be used when they measure fairness. So two identical employees on identical pay may each see the fairness of their situation differently. Perceptions may also be different from one person to another. The art of being a good manager is to manage these expectations and influence values. Although it is understandable that more senior staff earn significantly more, there are limits, and excessive pay for senior people can be demotivating. An employee who believes they are overcompensated may increase their effort. Another thing for managers to be aware of is the options available to them for reducing inequality:
Change an individual’s inputs or outputs.
Change the inputs or outputs of others Change the perceptions of inputs and outputs
