The World of Work Project

Adams’ Equity Theory of Motivation

Adams’ equity theory of motivation says that to be motivated, individuals need to perceive that the rewards they receive for their contributions are fair, and these rewards are similar to those received by their peers. If individuals perceive that their rewards are not fair, they will feel distressed and try to change things to create a sense of fairness.

Summary by The World of Work Project

Adams’ Equity Theory

J. Stacey Adams’ equity theory is a process model of motivation which says that the level of reward we receive, compared to our own sense of our contribution, affects our motivation. The theory considers the concept of equality and fairness, as well as the importance of comparison to others.

At its core, Adams’ theory says that individuals want a fair relationship between inputs and outputs. What this means is that they want the benefits (rewards) they receive from work to seem fair in relation to the inputs (contribution) that they provide. Similarly, they want the rewards that others receive for their work to be similar to the rewards that they themselves would receive for the same level of contribution.

People want to work in a just and fair organization.

Put simply, Adams’ equity theory says that people want fair compensation for inputs across the working population of which they are members. When this is the case, individuals may remain motivated. When it ceases to be the case, individuals may cease to be motivated.

Contributions and benefits

Equity theory says that the relationship between an individual’s inputs (contribution) and their benefits (reward) is important for their sense of fairness and equity, thus for their motivation. To make more sense of this though, we need to understand what types of things constitute both inputs and benefits.

Contributions (inputs or costs):

The further you run, the more rewarding the achievement feels

Inputs can be thought of as the things that an individual does to help an organization achieve a goal. These the the things that the individual contributes to the organization. Often the first thing that springs to mind is the time that an individual spends working, but there is actually a lot more to it than just this. The types of factors that can be thought of as inputs include: time, education, prior experience, effort, loyalty, hard work, adaptability, resilience, flexibility, determination, enthusiasm, adaptability, tolerance, support of others and trust and the willingness to follow leaders. Encaptured in these inputs are both physical labor and a wide range of things considered to be emotional labor (). Basically, any time an individual contributes effort, invests in effort or exerts psychological effort to help an organization achieve a goal can be thought of as contribution.

Benefits (outputs or rewards)

Benefits can be thought of as the things that an individual receives as a result of helping an organization achieve a goal. These are the things that the individual receives from the organization, or agents of the organization. Often, the first thing that springs to mind is salary, or other financial contribution for time, but there is actually a lot more to it than this.

The types of factors that can be thought of as inputs include: salary, benefits, job security, structure and routine, recognition, responsibility, a sense of community, praise, thanks and recognition, stimulating work, education and development, pride, the opportunity to progress and purpose. Basically, anything that an employee receives and sees as making a positive contribution to their life can be thought of as a benefit.

The things that need to be fair

Adams’ model introduces the idea of fairness and the idea of comparison. For a working relationship to be considered equitable it needs to pass two tests:

  • Firstly, individuals need to feel that the reward they receive for their contribution is intrinsically fair.
  • Secondly, they need to feel that the levels of rewards that they receive (relative to their contributions) are similar to those received by their peers in the organization.

If both of these tests are passed, then a fair and equitable working arrangement may exist and individuals will probably be motivated.

Test 1: The equity of reward and input

The first test of equity that needs to be considered is the relationship between an individual’s contributions and their rewards. For individuals to feel a sense of fairness, they need to perceive that the benefit they receive from their organization is appropriate for the level of input that they’ve contributed to their work.

The sense of what a makes a fair reward is probably shaped by societal and social norms. When individuals consider the fairness of their reward they probably make comparisons to other careers and industries, other ways they could choose to allocate their time and effort. When an individual feels that their rewards are commensurate with their contributions, they will feel they are being fairly treated and will probably be motivated.

Test 2: The equity of reward and peer reward

The second test of equity that needs to be considered is the relationship between an individual’s return on contribution, and that for their peer group. This process of benchmarking is knows as social comparison.

For individuals to feel that things are fair, they need to feel that the benefits they receive per unit of contribution are similar to the benefits that their peers receive for a comparable unit of contribution. When this is the case, individuals may feel that they are being treated fairly and be appropriately motivated.

What happens if things aren’t fair?

Things may be unfair if there is a gap between expectations and reality.

Adams’ model says that people experience “distress” when things are perceived as not being fair. Furthermore, the greater the level of unfairness that people perceive, the greater their levels of distress.

Generally speaking, when people find something to be unfair, they look to return it to a state of fairness. This effort to return to fairness can be achieved in two different ways. Either the actual levels of contribution can be adjusted (e.g. by changing roles or levels of effort), or the perception of of how much is being contributed can be adjusted (by adjusting the values placed on different people’s contributions). This process of adjusting perceptions is often known as cognitive distortion (you can read more about cognitive biases here).

Both of these methods of responding to distress have the same effect for the individual involved, but they may have different impacts on others within the peer group.

Individuals who feel over compensated

It might seem strange that individuals who perceive that they are overcompensated for their contributions feel distress, but they do. Individuals in this situation often feel a sense of shame or guilt for their circumstances and seek to reintroduce a sense of fairness.

The ways that they seek to achieve this fairness, though, differ. Some individuals may increase their effort without looking to increase their reward in an effort to feel that they have fairly earned their reward. This approach is fairly healthy both for the individual and for their peers.

Other individuals, though, may address the same problem in a different way. Instead of changing their actual contributions, they may (unconsciously) adjust their perceptions of the relative values of the contributions that individuals are making, through the process of cognitive distortion.

They may seek fairness through the cognitive distortion route in two different way. They can either:

  • Inflate their perception of what they contribute to the organization, or
  • Deflate their perception of what others contribute to the organization.

While inflating what you think you’re worth and deflating what you think others are worth will both help resolve a sense of unfairness and the distress that comes with it, these solutions are often unhelpful in the long run. The cognitive distortions that they require will often be shattered when it inevitably becomes time to move into a new peer group.

Individuals who feel under compensated

Many people can relate to the feeling of being under appreciated or under valued at some point in their life. It comes as no surprise that when this happens people feel distressed. Individuals in this situation often feel a sense of humiliation, anger or injustice. When this is the case individuals are often driven to try to reintroduce a sense of fairness.

Sometimes we don’t feel compensated for our time.

The ways that individuals seek to reintroduce this fairness, though, differ. Individuals may look to change their levels of contributions and rewards so that they are once again fair. They increase their rewards by renegotiating within their current job or by getting a new job, or they could reduce their contribution until it feels commensurate with the level of reward they currently receive.

Alternatively, some individuals instead change their perception of their contribution and reward, again through the process of cognitive distortion. They may inflate their perception of the contributions of others and deflate their perception of the value of their own contributions until their perceptions align with their sense of reality.

This can be an unhelpful and uncomfortable process for the individuals involved and may lead to loss of self-esteem and confidence.

What the model means for individuals

Adams’ model says that when individuals perceive that they are not fairly rewarded for their contributions that they will feel a sense of distress. From an individual’s perspective it’s therefore clear that equality and fairness are important.

To ensure you don’t feel a sense of distress in the workplace you need to ensure that the reward you receive feels commensurate with the contributions you make to your organization. It’s often worth taking some time to think about this and, if things don’t feel fair to you, reflecting on how you’d like them to change.

Once you’ve determined what needs to change for you to feel a sense of equity, it’s worth discussing these changes with your line manager to see what changes might be possible. Of course, if things seem too far out of kilter, it may be worth looking for a new role.

What the model means for organizations

Adams’ equity theory has been popular in the world of work and adopted into the HR thinking and the decision making processes of many organizations. The underlying premise of the model, that fairness is important for motivation, helps shape how organizations think about their relationships with their employees. Many organizations believe that organizational fairness and justice in their dealings with their employees is highly important for engagement, motivation, employee retention and overall productivity.

What the model means for leaders and managers

It’s important for leaders to treat others fairly.

Adams’ equity theory says that perceived fairness of rewards and contributions across peer groups affects motivation. What this means from a leadership and management perspective is that a sense of fairness should be created within a team to ensure the best levels of motivation, engagement and performance. There are two ways that this can be done. The first is by addressing the actual relationship between contribution and reward, and the second is by addressing perceptions.

To address the actual relationship between contributions and rewards, leaders and managers should work hard to ensure they are equitable in the treatment of their employees. They should avoid favorites, compare employees to benchmarks, give individuals equal opportunities to demonstrate their capabilities and share recognition fairly as merited. They should also ensure that they call out negative behaviors and address these too, as not doing so also contributes to a sense of unfairness.

To address the perceptions around the relationship between contributions and rewards, leaders and managers should strive for transparency over what each member of their team is contributing. When individuals lack this type of information, they often fill that information void with speculation that isn’t helpful. To overcome this leaders and managers should ensure their teams are kept as well informed as possible. They should also work hard to establish a culture of fairness, celebrate acts of fairness, capture values around fairness and tell stories that relate to fairness.

The World of Work Project View

Adams’ equity theory is an excellent model to have an understanding of. The concept of fairness as a motivator (or de-motivator) is important for both individuals in assessing their own motivations and for leaders in assessing the motivations of the members of their teams.

In our view some of the most interesting aspects of this model relate to the role of perceptions in defining a sense of fairness. Cognitive distortions are not uncommon in the workplace, and their impacts on perception and thus motivation are fascinating, though we don’t look at them much here. You can read more on cognitive biases and how we think in the relevant pages of this website.

Like many models, Adams’ equity theory has had some criticisms and challenges, including challenges to its underlying assumptions (which we’ve not covered here) and to its applicability in the real world, as much of the assessment around it has been undertaken in laboratory settings. There appear to be fewer criticisms though of the equity model than of some of the earlier content based models of motivation, and overall the equity model is generally well accepted.

In summary, we’re big fans of the equity model. We think it provides a simple way to think about things and some clear guidance on how individuals, leaders and organizations should behave. We think most people would benefit from reading about it and learning from it.

Sources and further reading

Where possible we always recommend that people read up on the original sources of information and ideas.

Most of the original work on which this post has been based comes from J. Stacy Adams’ 1963 article, “Towards and understanding of inequity” as published in the Journal of Abnormal and Social Psychology.

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