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Fundamental Principles Of John Stacey Adams Equity Theory: How It Can Affect The Workplace?

Referencing Styles : APA | Pages : 1

The Adams' Equity Theory

John Stacey Adams developed a theory related to the balance between the effort an employee puts into their work and the result they get in the return, in the year of 1963, which is known as ‘The Adams’ Equity Theory’. He used the term ‘input’ to refer the efforts that an employee put in their work and the term ‘output’ for the result they get in return.

Here, the input includes the hard work, enthusiasm and the skills of the employee which he or she put in their work. While, the output consider the things like salary, recognition and responsibilities. According to the Adams, the proper balance between the input and output is required to make the employee feel satisfied as well as motivated towards their contribution in the productivity. Although, this theory of Adams is more than 50 years old, it is still relevant in the today scenario. The each and every organisation need to understand this theory of Adam as how this theory works. This theory can help the organisation to create an effective company structure where every employee is motivated enough to perform their job role and responsibility conveniently and passionately every day.

Basically, ‘The Adams’ Equity Theory’ is an employee motivation theory and explain the balance between what the employee contribute in the production of their company and what he get in return. As there are several other employee motivation theory is also available like theory of Maslow as well as Herzberg, Adams acknowledges that subtle factors influence how employees view their job and how they carry it out. Adam is confident that employees lose their motivation when they realizes that their input is greater than the output.

Fundamental principles of ‘The Adams’ Equity Theory’

The fundamental principles laying behind ‘The Adams’ Equity Theory’ is the balance between the input and output. As discussed before, here, input refers to those effort and hard work which an employee put in their work and output refers to those benefits which the employee get in return.

‘The Adams’ Equity Theory’ shows why salary and benefits alone don’t determine an employee’s motivation. It explains why a promotion and appraisal rarely has the desired effect. It can even undermine the motivation of the other employees. The employees of any organisation give the major importance to being treated fairly as well as equally. The different and unfair treatment of the different employee spread negative effect into the employees which damages the motivation of the employees to work hard as everybody wanted to be treated equally and fairly. When that’s not the case, employees will become unhappy and can convenes themselves to go in different ways. For example: - they will not perform optimally as well as the employer can face the huge employee turnover because most of employee will try their luck with the other employer. Hence, this theory promote the equality in the work place and the fair treatment of each employee.

This explains that how can any employer motivate their employee towards its works and make an effective organisational structure. This theory is fully based in the equality and fair treatment among the each employees of the firm. This theory also argued that promotion and appraisal of an employee can negatively affect the motivation of other employees. Hence, the theory suggests to equally and fairly treat the each employee of the organisation to make them feel satisfied which provide motivation and dedication in their work.      

How ‘The Adams’ Equity Theory’ can affect the workplace?

As discussed above, ‘The Adams’ Equity Theory’ is employee motivation theory and helps the firm to motivate their employee. This theory affect the workplace by the following ways: -

  • By making effective organisational structure: - this theory affect the organisational structure and make it more effective by treating the each employee equally and effectively. This organisational structure helps the employee to be motivated and productive.    
  • By providing employee engagement: - This theory affect the entire human resource of any organisation. This helps the organisation with the employee engagement. The theory argue that if the employee feels their input is more than the output then the employee finds different ways. For example: - the employee does not perform in their optimal strength or want to try the different employers. Hence, this theory helps the organisation to keep their skilled employee within the organisation by providing the employee engagement.      
  • By motivating the employees: - The employee motivation is very important for every organisation to achieve their target. If there is the lack of the motivation among the employees, then the employee will not perform their work as per their strength or will start looking towards the other jobs which negatively affect the performance of the firm. Hence, indirectly this theory also affect the production of the employee as well as the performance of the firm.     
  • By providing good work environment: - lastly, as we all know every organisation depends on their employees. The performance of the firm totally depended on the performance of the employees and both are directly related to each other. In simple words, if the employee of any firm will perform well then the performance of the firm will enhance and vice versa. Further, the performance of the employee is depends on the working environment of the organisation. If the business environment or the working environment of the firm is favourable for the employee then the employees of the firm will perform more effectively and if not then the performance of the employees will become low compare to the first condition. Hence, this theory positively affects the performance as well as production of the employee by providing the favourable working environment.   

Importance of Referent Groups

The referent Group is the group that an individual sees as a source for his or her identity. The referent group of anyone defines who they are. If anyone is have more than the one referent group then the primary referent group will consider that group which is the major source of their identity. In other word, the referent group is group that can describe any person. This can be define as the group to which an individual compare himself. This can be also used by the individual as the standard for measuring themselves and their own behaviour a reference group.    

The referent groups are important in the equity theory. A referent group is a group of people who relate to employees when it comes to comparing themselves to large populations. For example: - the salesman compare themselves to the other sales staffs hence their referent group is the sales staff. There are mainly four type of referent group which has more importance in the equity theory. The first one is the self – inside referent group allows the employees to compare their experience with the organisation. The second one is the self – outside referent group which allows the employees to compare themselves with the employees of other organisation but in the same position or job category. Third one is the others – inside referent consider the experience of the other organisation employees. While, the last referent group named others – outside, which is also equally important, shows the experience which the people have outside of the organisation of any person.

The referent group also plays an important role in the employee motivation. This also serve as the great source for the theoretical innovations in compensation, organizational behaviour and leadership fields.   


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