Adam's Equity Theory

Define Adam’s Equity Theory

it explains that employees naturally compare their efforts and rewards to others in the workplace expecting fairness

Describe Adam’s Equity Theory

employees compare their inputs (efforts) to outputs (rewards)

• inputs are what employees contribute such as hard work, skill, and time

• outputs are what employees receive such as pay, recognition, and praise

workers are motivated when they perceive fairness in this comparison

Explain Adam’s Equity Theory

• an employee measures fairness by comparing the balance of effort and reward obtained with other people

• workers will only be motivated if their outputs are seen to be fair in relation to others based on effort

Explain the Impact of Inequality in the Workplace

• inequity occurs when employees feel their inputs are not matched by the outputs

• if workers are paid less compared to their efforts, demotivation occurs

• this can lead to absenteeism, high staff turnover, and reduced loyalty