Adams’ equity theory provides valuable insights into understanding workplace motivation. This theory suggests that people are motivated when they perceive fairness and impartiality in their work relationships. In other words, when they see these relationships as being equitable.
By examining the balance between inputs (effort, skills, experience) and outcomes (rewards, recognition, status), Adams’ equity theory offers a framework to identify and address imbalances that can hinder motivation.
Here we’ll look at the key principles of Adams’ equity theory, examining how it can be applied to boost motivation and improve performance in the workplace.
- According to Adams’ equity theory, people in the workplace provide inputs, and experience outcomes. There should be a perception of balance – by comparison with their co-workers – in order for an individual to feel their relationship with their work or employer is equitable. This has a direct effect on their motivation.
- The perception of equity will foster work satisfaction and motivation. However, if there’s a perceived imbalance of inputs and outputs compared to others, this will cause feelings of inequity. In order to motivate this worker or workers, equity needs to be restored.
- An equitable workplace and motivated workforce can be achieved in numerous ways: such as paying staff properly; transparent performance evaluation; equal opportunities for development and growth; recognition and reward; increased ownership, such as the ability to contribute in decision making; and a good work-life balance.
Understanding Adams’ equity theory
The theory – also known as the equity theory of motivation – was developed in 1963 by workplace and behavioural psychologist John Stacy Adams. He based it on the premise that people compare their inputs and outcomes to those of their colleagues or peers.
Inputs refer to the contributions made by an individual to their job. So this could include things like:
- Educational qualifications
Outcomes, on the other hand, are what’s received in return for their contributions. This can encompass:
- Job security
- Status (for example, reflected by job title)
According to the theory, people strive to maintain a sense of equity by ensuring that the ratio of their inputs to outcomes is fair – as they perceive it – in comparison to others.
⏰Key point: The outputs are not dissimilar to the factors for satisfaction in Halzberg’s two-factor theory of motivation.
Key principles of Adams’ equity theory
The key principles of this theory are as follows:
Perceived equity. When people in the workplace perceive a fair balance between their inputs and outcomes in comparison to others, they experience a sense of equity. This perception encourages motivation and satisfaction. In turn, it should lead to a willingness to maintain or increase their efforts.
Inequity. If people in the workplace perceive an imbalance between their inputs and outcomes in relation to others, the result is inequity. This can manifest as under-reward (where inputs exceed outcomes); for example, if someone perceives they’re being paid less for the same amount of work as their peers. Alternatively, it could manifest as over-reward (where outcomes exceed inputs); such as where an employee is tasked with a project beyond their capability. Inequity leads to feelings of dissatisfaction and demotivation. People who experience this are likely to harbour a desire to restore equity.
Restoring equity. When people perceive inequity, they’re motivated to restore equity. This might be achieved through various means, such as seeking changes in inputs or outcomes, or by altering perceptions of others’ inputs or outcomes.
Applying Adams’ equity theory to boost your team’s motivation
So how can this theory be applied in practice? There are numerous steps that can be taken to foster an equitable workplace, which should in turn boost your team’s motivation and performance.
#1. Show me the money!
It should probably go without saying, but employees should receive fair and equitable compensation for their work. This is understandably crucial in keeping staff motivated.
When it comes to pay, what a worker earns should be based on factors such as job responsibilities, skills required (and provided) and market rates. Regular evaluations and adjustments can help maintain perceived equity, motivating employees to contribute their best efforts.
#2. Transparent performance evaluation
To maintain fairness in the workplace, employers should establish transparent and fair performance evaluation systems. Providing clear criteria, regular feedback and opportunities for dialogue will let your staff understand how their efforts are being assessed. After all, if you’re being judged fairly, you’re likely to strive for higher levels of performance.
#3. Equal opportunity for development and growth
By providing equal opportunities for growth and development, you help maintain perceived equity. Staff should have access to training and mentorship programs, plus career advancement opportunities based on their potential and performance.
When people believe they have an equal chance to advance, this should have a knock-on effect for their motivation, and likewise commitment to the organisation.
#4. Recognition and reward
Recognising and rewarding staff for their contributions and achievements is essential for maintaining perceived equity, and this goes beyond their pay packet.
Establishing fair and consistent reward systems – such as bonuses, promotions, positive affirmation and public recognition – reinforces the notion that effort and performance are recognised and valued. This enhances motivation, encouraging continued high performance.
#5. Open communication and feedback
Fostering open communication and feedback channels will allow employees to express their suggestions and ideas, and likewise concerns and grievances. This creates a sense of psychological safety, demonstrating that their voices are both heard and valued.
Engaging in dialogue helps identify and address any perceived inequities, which in turn imbues a sense of fairness.
#6. Collaborative decision making
Involving employees in decision-making processes – especially those that affect them directly – can help boost motivation. When employees have a voice in decisions that impact their work, they feel a greater sense of ownership and fairness.
Feeling part of a combined effort is doubtlessly much healthier among workers than a ‘take the money and run’ point of view.
#7. Team building and collaboration
Probably unsurprisingly, encouraging a culture of teamwork and collaboration promotes a sense of equity among team members. When everyone feels valued and included in projects and day-to-day work, it fosters a cooperative, supportive environment. Also, being in it together can help colleagues view each other favourably – a good leveller when it comes to perception.
#8. Flexibility and work-life balance
Recognising the importance of work-life balance and providing flexible work arrangements can also contribute to perceived equity. So this could include options such as remote or hybrid work, flexible hours or allowance for parental leave. This lets employees align their work and personal responsibilities, promoting overall wellbeing and motivation.
#9. Addressing inequities and concerns
When inequities are identified or concerns arise, it’s essential to address them both promptly and transparently. You could consider providing an open-door policy to address concerns, and a mechanism which allows grievances to be expressed, and in turn considered seriously.
Resolving inequities and addressing issues promptly demonstrates a commitment to fairness. As such, you turn a negative into a positive. By handling concerns and grievances deftly, you can enhance motivation, and help bring about a positive work environment.
#10. Continual learning and skill development
Offering opportunities for developing skills and ongoing learning is another way to maintain perceived equity. This could involve signing up to training programs and workshops, and providing access to resources which enhance knowledge and skills. As such, you’re helping to enable staff to contribute at their full potential.
What are the limitations of Adams’ equity theory?
While Adams’ equity theory is a useful tool for examining and understanding workplace motivation. However, it’s not without its drawbacks and limitations.
For one, it doesn’t account for people’s ability or willingness to work. Let’s say someone isn’t willing to do the work required, or does their job poorly. They may perceive that they’re being treated unfairly in comparison to others. The theory seems to assume this perception is valid, and managers should restore equity; whereas, to put it in lay terms, the worker probably needs to pull their socks up.
In addition, it doesn’t take into account people’s goals and values. Somebody may be better motivated by their personal goals than by a sense of fairness, such as being driven by ambition.
As such, by not taking account of people being innately complicated, the theory is arguably too simplistic to be all-encompassing.
Is Adams’ equity theory useful for managers?
Adams’ equity theory can offer valuable insights into how perceptions of fairness and equity might impact motivation in the workplace. But, as is sometimes the case, it’s best to apply it as a rule of thumb rather than an exact science.
Nonetheless, by applying the principles of the theory, organisations can potentially enhance motivation and performance, creating an environment where workers feel valued and inspired to contribute their best efforts… So long as it’s not taken as a ‘one size fits all’.
*Find out more about how to motivate your team and build trust.