Equity Theory In Management: How It Impacts Employee Motivation

Question:

Describe about the equity theory of motivation in management.
 

The equity theory is the principle of balance or equity. It is used in management. It is correlated to individual’s motivation level and the perception of fairness and justice. It is focused on determining the distribution of resources in a fair way (Li, Shengping, Jueheng, Ruilin & Dan, 2013). The employees of the organization bring the input regarding their learning and the outcomes, which they receive from the perceived inputs. The structure of equity in the workplace is developed by the ratio of inputs to the outcomes.

The equity theory has been widely applied to business by the psychologists to describe the relationship between employee motivation and the perception of equitable treatment. The outcome is varied with the results of others. These attitudes give more specificity, injustice, organizational justice to the theory (Bell & Martin, 2012). It has a direct influence on morale, efficiency, productivity and turnover of employees.

In business, several examples can be given. For example, if the salary of an employee is increased but his colleague is getting lesser than he is, then the second employee would feel distressed. However, if it is perceived that the first employee is taking more responsibility while working and he is relatively more workaholic, then it might conclude that there is no loss inequality status.

Figure 1: The formula of equity

Figure 2: Equity and its example  

References

Bell, R. L., & Martin, J. S. (2012). The relevance of scientific management and equity theory in everyday managerial communication situations. Journal of Management Policy and Practice, 13(3).

Li, L., Shengping, C., Jueheng, W., Ruilin, Z., & Dan, X. (2013). Effective motivation system of experimental technical team based on Needs Theory and Equity Theory. Experimental Technology and Management, 3, 059.