Adam's Equity Theory

Equity Theory proposes that a person's motivation is based on what he or she considers to be fair when compared to others (Redmond, 2010).  As noted by Gogia (2010), when applied to the workplace, Equity Theory focuses on an employee's work-compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result.  Because Equity Theory deals with social relationships and fairness/unfairness, it is also known as The Social Comparisons Theory or Inequity Theory (Gogia, 2010).

Equity theory of motivation, developed in the early 1960’s by J. Stacey Adams, recognizes that motivation can be affected through an individual's perception of fair treatment in social exchanges.  When compared to other people, individuals want to be compensated fairly for their contributions (the outcomes they experience match their inputs).  A person's beliefs in regards to what is fair and what is not fair can affect their motivation, attitudes, and behaviors. Equity theory helps explain why highly paid union workers go on strike when no one else but the members understand why and why millionaire athletes feel that they are underpaid and don't feel they make enough money.