Equity Theory of Motivation

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Equity Theory of Motivation

Equity theory exists in the real world, and with the help of social media, this is rising. In organizations, we can feel that people are suffering from this theory, and that’s why they are lacking motivation. Now without further delay, let us understand this theory in detail. And let us first start with a real-life incident I faced.


Example of equity theory of motivation

This incident will help you in understanding how the problem arises. 

One of my friends got placed from campus at an excellent salary package in a multinational company. After joining, he was delighted as the salary was high, he was getting it on time, and the job was challenging as well as exciting. After a few months, he called me, and he was sounding like really low. So I asked him what happened, you were delighted when you joined. Then he replied and told an exciting thing. He said that this company hires from IIT(Indian Institute of Technology) as well as from NIT(National Institute of Technology).

My friend was from NIT. In that situation he said that there is a huge difference in salaries, he was getting a very much lower wage than from IIT guys, almost half from them. And one important thing he said was that the designation, job profile, job nature everything was the same; the only difference is in terms of salary. In some positions, freshers from IIT have been positioned on senior posts than him. This all made him demotivated in the situation. 

If you observe this situation, my friend is comparing himself with others. Our society has got this notion; we keep on comparing things, jobs, children, etc. This must be happening with you also. 

So, my friend was unhappy due to a comparison of his salary and salary of IIT students. He is suffering from equity distress.


John Stacy Adams proposed equity theory in 1963. The theory says that employees tend to compare their job inputs with job outputs relative to others. But now this theory is not only limited to employees; every person feels it. 

The inputs are– effort, experience, educational qualifications, and competence ( skills). We take all four things as inputs that we are putting efforts into; we have the best experience, we come from an excellent educational background, and we have the best skills.

The outputs are – salary levels, appraisals, recognition. We usually take these three things as outputs that how much salary we are getting, what promotions or evaluations are we getting at year-end and how are we recognized in the company.

Research shows both males and females make comparisons, one engaging thing in the study is that they both prefer same-sex analogy; a male would likely to compare with another male and a female will probably compare with another female.

But, the way women empowerment is on the rise, this same-sex comparision part of theory will get failed. It will be more common in the future that males and females will be compared with each other, which is already started. 


After Comparison, there are three situations which can be generated, let’s talk about those situations:


1. the ratio of output to the input of an employee is equal to the ratio of output to the input of another employee ( referent). In this condition, you feel equality, fairness, and organization are very good. Here equity exists, and this is the ideal condition that rarely exists.

2. The ratio of output to the input of an employee is more than the ratio of output to the input of another employee ( referent). In this condition, there is inequity due to overrewarded. It feels suitable for a few days for being the employee in this situation. But  Sometimes, this also creates a problem because when you think overrewarded than anyone else who has done the same hard work as you; you start developing a feeling of guilt. 

3. In this condition, the ratio of output to the input of an employee is less than the proportion of output to the input of another employee ( referent). This is the most common situation, and here also inequity exists due to being under-rewarded. Most employees find themselves in this situation that their organization is not recognizing their hard work well.



1. Co-workers– This is the person with whom we compare the most.

2. Neighbours–  We compare our houses, cars, living standards, etc. with them. Sometimes we also compare our children.

3. Friends- We have a regular comparison with friends also in terms of education, hard work, money, etc.

4. Present Job with Past job– Sometimes if you do not compare with the above three ones then you compare your past career with the present one. 

Comparision has become our natural trait, every time we keep comparing. Nobody is immune to it particularly more due to social media. 

These comparisons create four types of referent comparisons.


1. Self Inside

 It means we compare the personal experience in different positions in the current organization. Sometimes we work at different positions in the same organization, then we start comparing those positions. For example, – I was working in marketing. Still, I was shifted in HR ( Human Resource), Now will think that I used to get more incentives in marketing jobs or I was not getting a sitting position in marketing, but I am getting a sitting job in HR.

2. Self Outside

Here, we compare personal experience in a situation or position outside the organization. In another organization, either our friend is working or our roommate who is in the same position with whom we share our experiences.  Now we start comparing our position with the same position but in another organization. 

3. Other’s inside

 here, we start comparing other individuals or groups inside the organization.

This is the most common one.

4. Other’s outside

 here, we start comparing other individuals or groups outside the organization. 

How Employees deal with Inequity experience

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1. Change the Input

The day you feel that whatever hard work you do, nothing happens and the company prefers someone else; the same day you change your input. And you think why I should be hard for the company when I know someone else will be rewarded.

We can compare this with our school life when the teacher used to favor another student, and on the same day, we stop giving responses to teachers.

2. Change the output

When an employee observes his talent is not appreciated, he starts focusing on quantity more than quality. He tries to increase his production because his class is not being measured. If a company does not take care of employees’ self-respect, then why will employees take care of the company’s reputation for quality.

3. Choose a different referent

This is a good trick. If you compare yourself with others and you feel frustrated with it, then change the referents. You should see yourself ahead of those who are behind you, rather than thinking yourself behind of those who are ahead of you. For example, when I used to rank 10th in school exams, then I used to think that I am ahead of 30 students rather than I am behind 9 students.

4. Quit the Job

 If you feel that this inequity tension has increased so much that it is unbearable, then simply you quit the job. But when you join another organization then the same process starts happening there also.

5. Change the self-perception

 you start thinking that the input I am giving is not sufficient for getting the desired results. You start pushing yourself.

6. Change the perception of others

Here you start thinking that the job of others is more important than yours, that’s why they are getting more rewards.

Although in the first place, people should not make comparisons, they follow the above-told strategies because it somewhere it gives them relief from inquiry distress.


Adam’s Equity Theory of motivation states that a higher level of motivation and positive results can be expected only when employees feel their treatment is fair. The situations of equity theory depend on the ratio of output to input. The people with whom employees compare themselves are co-workers, neighbors, friends, and themselves. The people develop inquiry stress within themselves due to these comparisons, and they deal in different ways, as discussed above.

Also you can read our blog on Role Of Brikshaw four-dimensional model


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