Explain the equity theory with its positive and negative aspects.
Equity Theory of Motivation
Equity theory of motivation was developed by J, Stacy Adams in 1963. It is a cognitively based motivation theory. This theory is based on the notion that people want to be treated fairly in relation to other for motivation. According to the equity theory of motivations, input and outcome ratio will help the individual to have an idea of being in a situation of equity or inequity. Inputs are the individual's responsibility and other factors that they put into the job, whereas outcomes are the promotion, pay raise, recognition of the work done, etc. in exchange for the input. Thus, the equity theory states that an individual compares his input/ outcomes to that of the other working in the same position in the organization or in other organizations and tries to establish equity. In the process of comparison, if the individual perceives any sort of inequity he or she will change his or her behaviour at work.
Positive Aspects
Some of the key positive aspects associated with equity theory are listed below.
- It helps in finding the equity between the groups so that group motivation is enhanced.
- It helps in providing the fair pay to the employees per their personal capabilities.
- It also determines how input and outcomes of a person can be matched.
Negative Aspects
Some of the key negative aspects associated with equity theory are listed below.
- It cannot provide the ideas regarding how to change the 'input and outcome of individual.
- The equity between input and output is almost impossible to gain as it depends upon the personal perception of employees.
- The input cannot be changed easily. Moreover; change in outcome can become conflicting.
- The equity theory is useful only for the company having very small number of employee.
