This article explains the Adams Equity Theory, developed by John

Stacey Adams in a practical way. After reading it, you will understand
the basics of this powerful motivation theory.

What is the Adams Equity Theory?

The Adams Equity Theory was developed by the American psychologist
John Stacey Adams in 1963. It’s about the balance between the effort an
employee puts into their work (input), and the result they get in return
(output).

Input includes hard work, skills, and enthusiasm. Output can be things like
salary, recognition, and responsibility. A proper balance between input
and output ensures that an employee feels satisfied and motivated,
contributing to their productivity. Even though Adams’ theory is over 50
years old, it’s still relevant today. It’s very important for organisations to
understand how the Equity Theory works. This can help create an
effective company structure in which employees are encouraged to carry
out their work with conviction and passion every day.

Similar to common theories on motivation like those

of Maslow and Herzberg, Adams acknowledges that subtle factors
influence how employees view their job and how they carry it out. Adams
is convinced that employees lose motivation when they think or feel that
their input is greater than the output.
Fairness
The Adams Equity Theory shows why salary and benefits alone don’t
determine an employee’s motivation. It explains why a promotion or raise
rarely has the desired effect. It can even undermine the motivation of
other employees. Employees place great importance on being treated
fairly and equally. This ensures that they’ll be motivated at work. It’s
treating different employees differently and unfairly that leads to bad
blood and will damage a lot of people’s motivation. After all, we all wanted
to be treated fairly. When that’s not the case, employees will be unhappy,
which can manifest itself in different ways. For instance, they won’t
perform optimally, and there’ll be a risk of high employee turnover as
employees choose to try their luck at another employer. That’s why fair
treatment of everyone involved is essential.

Input
The input referred to in Adams Equity Theory includes both the quantity
and the quality of the contributions employees make to carrying out their
work. They spend time, energy, and engagement at work. They work hard,
share ideas, trust their superiors and support their co-workers. It’s about
the effort they put into the organisation. The number of examples are
endless, but the most common forms of input are listed below:
Effort
Every day employees make an effort by coming into work and carrying out
their job and tasks. No effort means no work. It’s the most basic level of
input.

Skills
Employees have skills they use to carry out their job competently and
professionally. They’ve gained these skills through training and
experience.

Knowledge
This is valuable input employees accrue through schooling and training,
being interested in their field, and by developing and evolving.

Experience
Employees can’t make good use of their knowledge without experience.
That’s why experience is considered to be very valuable input with a
remarkable characteristic. Moreover, experience can’t easily be replaced.

Social skills
Employees take part in company outings, celebrate each other’s
birthdays, and are able to create pleasant working conditions by engaging
each other in conversation. By treating each other with empathy,
employees ensure that they’re part of the group and therefore the
organisation as a whole. Acceptance is also part of this. By accepting and
tolerating the behaviour of others, employees can foster mutual respect.

Loyalty
This includes everything related to personal sacrifice. An employee who
remains loyal to his organisation, despite a job offer at another
organisation, is loyal. Employees who work late every day and sacrifice
their own free time are loyal too.

Output
Employees’ output can generally be divided into 1) financial rewards, 2)
immaterial rewards. The most common forms of output are discussed
based on this division.

1. Financial rewards
Salary
This is considered the most important output for employees. In return for
all their input, they get a fixed amount of money that’s paid by the
company every month.

Bonus
The extra money on top of the salary as a bonus is also considered a
financial reward. Bonuses can be based on commission or targets. The
harder an employee works, the higher this bonus.

Profit sharing
Profit sharing also falls under this type of output. When the whole
organisation and all its employees work hard, this results in a shared
reward at the end of the year.

2. Immaterial rewards
Recognition
Employees want to be intrinsically motivated. This means they feel it’s
important that their hard work is recognised. When a co-worker takes
credit for an employee’s work, this leads to a massive imbalance in the
Equity Theory. It’s important for managers to be aware of this factor and
actively give employees the recognition they deserve.

Challenge
Employees enjoy interesting and important challenges in their work. This
makes them feel proud of the work they do and committed to the
organisation.

Responsibility
This ensures employees experience a sense of ownership and control in
their work. This responsibility makes them feel confident and gives them
the freedom to organise and carry out their work as they see fit. As a
result, responsibility leads to intrinsic motivation. The employees feel that
they matter in the organisation.

Balance
The core of the Adams Equity Theory is that there needs to be a balance
between employee input and output. What an employee brings to an
organisation needs to be relatively equal to what they get out of it. In
return for a monthly salary, employees bring knowledge, skills, effort,
experience, loyalty, and much more to the table. When their input
outweighs their output, there’s an imbalance, and the employees will be
unhappy. They’ll feel that they’re not being treated fairly and will feel
disillusioned with the organisation. That may lead to demotivated
behaviour, recalcitrance, calling in sick, or finding other employment.
Every employee will attempt to maintain a balance between their input
and output. That’s the foundation of the equity principle; people look for
fair and equal treatment. Balance in the Equity Theory offers ways to help
motivate employees. By engaging them in conversation and finding out
what motivates them, supervisors will be better able to inspire employees
and increase productivity.

Equity
Finding equitable and just treatment is something that is always relevant
for employees. They’ll always compare their own efforts (input) and the
rewards they get for this (output) to their co-workers’ input and output,
striving for equity. This despite the fact that employees are aware that
different types of effort and skills are required for different levels and are
therefore rewarded differently. Regardless, employees should not be
made to feel that they put in the same amount of effort as colleagues at
higher levels without being paid the same salary. This means that when
tasks are delegated to lower-level employees, this needs to be rewarded
fairly in order to keep everyone happy. The constant comparing of input
and output makes the Adams Equity Theory complex. Adams calls this
‘referent’, meaning employees use each other as reference points.

1. Adams, J. S., & Freedman, S. (1976). Equity theory revisited:

Comments and annotated bibliography. In Advances in experimental
social psychology (Vol. 9, pp. 43-90). Academic Press.
2. Brockner, J., Greenberg, J., Brockner, A., Bortz, J., Davy, J., & Carter,
C. (1986). Layoffs, equity theory, and work performance: Further
evidence of the impact of survivor guilt. Academy of Management
journal, 29(2), 373-384.
3. Pritchard, R. D. (1969). Equity theory: A review and critique.
Organizational behavior and human performance, 4(2), 176-211.

How to cite this article:

Mulder, P. (2018). Adams Equity Theory. Retrieved [insert date] from
ToolsHero: https://www.toolshero.com/psychology/adams-equity-theory/