Equity Theory

DEVELOPERS

John Stacey Adams (1963, 1965), workplace and behavioral psychologist

• Equity Sensitivity construct (Huseman, Hatfield & Miles, 1987) - "suggests that individuals react in consistent but individually different ways to both perceived equity and inequity because they have different preferences for (i.e., are differentially sensitive to) equity ... on a continuum with classes of individuals: Benevolents, Equity Sensitives, and Entitleds." Development of an equity sensitivity instrument (ESI) scale.
• Fairness Model (Carrell and Dittrich, 1978); Fairness or equity in the MIS context (Joshi, 1989)
• Norm of equity (Carrell and Dittrich, 1978; Walster, Walster, & Berscheid, 1978)
• Turnover Model (Griffeth and Gaertner, 2001 add to much earlier work in this area)

BACKGROUND

Adams (1963) noted that "the presence of inequity will motivate Person to achieve equity or reduce inequity, and the strength of motivation to do so will vary directly with the amount of inequity."

• "Equity Theory focuses upon a person’s perceptions of fairness with respect to a relationship. During a social exchange, an individual assesses the ratio of what is output from the relationship to what is input in the relationship, and also the ratio of what the other person in the relationship outputs from the relationship to what is input into the relationship. Equity Theory posits that if the person perceives that there is inequality, where either their output/input ratio is less than or greater than what they perceive as the output/input ratio of the other person in the relationship, then the person is likely to be distressed. For example, consider two situations in which change is presented to two employees. If an employee was given a salary increase and a peer was seen as being given a larger increase in salary for the same amount of work, the first employee would evaluate this change, perceive an inequality, and be distressed. However, if the situation was such that the first employee perceived the other employee being given a larger increase in salary as well as being given more responsibility and therefore relatively more work, then the first employee may evaluate the change, conclude that there was no loss in equality status, and not resist the change. This theory may be used for both explanation and prediction."(source)
• Adams' theory states that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs (Adams, 1965).
• Adams Equity Theory: http://www.mindtools.com/pages/article/newLDR_96.htm

" Equity Theory is also called Inequity Theory as it is the unequal difference that is often the area of interest." Categorized under - Behavior, Responding to others, Collaborating with others.

According to Allen and White (2002) the "lack of predictive ability of Equity Theory" contributed to its 'falling out of favor' only to be revived by "interest in organizational justice and equity ... spurred in part by an extension of the original Equity Theory to include individual differences" and the Equity Sensitivity construct.

Relationship to Other Theories

• ARCS Motivation Model refers to Equity in relation to the Satisfaction variable. "Equity is mentioned in the ARCS Model in the education arena as important for student satisfaction. If a student feels s/he has been treated differently (e.g., less attention, unfair grading) compared to others in the class, s/he will likely feel less satisfied with the learning situation." (Small)
• Cognitive Dissonance Theory by Festinger (1957) is drawn upon in the development of Equity Theory (Adams, 1963)
• Expectancy Theory.
• Herzberg's Two-Factor Theory (Motivation-Hygiene Theory)
• Maslow's Hierarchy of Needs.

REFERENCES ~ Coding Spreadsheet - Web View

(Source for Seminal and IS)

Seminal articles

• Adams, J.S. (1963) Towards An Understanding of Inequality. Journal of Abnormal and Normal Social Psychology. (67), pp. 422-436.
• Adams, J.S. (1965) Inequality in Social Exchange in Advances in Experimental Psychology, L. Berkowitz (ed.), Academic Press, New York, NY. pp. 267-299.
• Homans, G.C. (1961) Social Behavior: Its Elementary Forms. Harcourt, New York.
• Huseman, R., Hatfield, J., and Miles, E. A New Perspective on Equity Theory: The Equity Sensitivity Construct. Academy of Management Review. 1987. 12(2). pp. 232-234.
• Walster, E. E. Berscheid and G. W. Walster. (1973). New Directions in Equity Research. Journal of Personality and Social Psychology. pp. 151-176.

IS Articles

• Joshi, K. (1989). The Measurement of Fairness or Equity Perceptions of Management Information Systems Users. MIS Quarterly. 13(3), pp. 343-358.
• Joshi, K. (1990). An Investigation of Equity as a Determinant of User Information Satisfaction. Decision Sciences. 21, pp. 786-807.
• Glass, R. and Wood, W. (1996) Situational determinants of software piracy: An equity theory perspective. Journal of Business Ethics. 15(11), pp. 1189-1198.

Other

• Allen, Richard S. and White, Charles S. (2002). Equity sensitivity theory: a test of responses to two types of under-reward situations. Journal of Managerial Issues, 14(4), pp. 4435-451.
• Carrell, M.R., and Dittrich, J.E. (1978). Equity Theory: The Recent Literature, Methodological Considerations, and New Directions. The Academy of Management Review. 3;2: 202-210.
• Griffeth, Rodger W. and Gaertner, Stefan. (2001). A role for equity theory in the turnover process: an empirical test. Journal of Applied Psychology, 31(5), pp. 1017-1037.
• Shore, Ted H. (2004). Equity sensitivity theory: do we all want more than we deserve? Journal of Managerial Psychology, 19(7), pp. 722-728.
• Small, Ruth V. (2006) Designing Motivation into Library and Information Skills Instruction American Library Association, September 27, 2006. Ruth V. Small, Associate Professor, School of Information Studies, Syracuse University.
• Walster, E., Walster, G., & Berscheid, E. (1978) Equity: Theory and research. Boston: Allyn & Bacon.