Equity theory with some examples

Equity theory with some examples

Equity theory aims at establishing whether resources are equitably distributed to all relational partners (Liu & Brockner, 2015). Through comparing the relative sum of contributions and benefits for every person, it is possible to measure equity. The inputs can also be defined as costs, while benefits are rewards. Equity theory remains as one of the theories applicable injustice and widely used at workplaces to determine the equity among employees concerning their inputs to work and the rewards they get.  To maximize the awards obtained by an individual, systems that allow a fair distribution of resources must be put in place. Inequalities in associations make those within them to be sad to an extent proportionate to the level of the disparity. The conviction that people regard fairness in treatment causes them more motivation to maintain the balance kept within the interactions of their colleagues and the institution (Pennsylvania State University, 2016). The basic formation of equity dramatically depends on the proportion of inputs to rewards. The employees give contributions to the organizations and in return, get rewards, which must be delivered equitably.

In any situation, employees need to experience a rewarding of their contributions to work through their payments and any other form of appreciation, such as promotion and allocation of more tasks (Lim, 2019). When this is not the case, and the employees feel that their efforts are not commended as their expectations were, may result to hostility towards the organization and to some extent colleagues who the organization commends better. Such feelings of resentment significantly affect the productivity of the workers and the organization at large. For instance, when an employee performs exemplarily good, he/she expects recognition in return. Recognition motivates the employee to put extra efforts to gain more and more recognition (Fowler, & Brown, 2018). Satisfaction also comes with the idea that someone notices the contributions made. However, if the employee lacks the so expected recognition, or feels that his/ her efforts are unrewarded, he/she is not satisfied, and this significantly affects performance.

The two significant components of equity theory are inputs and outcomes. The participant’s involvement and providence with the exchange such that it entitles him/her to recompense are defined as the input. The effort contributed by a participant to any affiliation can be categorized into two, first, either as assets which entitle them to compensation or liabilities that entitle them to costs.  The claims to payment or costs attributed to every input differ concerning the organizational settings. For example, in and industry, resources such as manual labour and capital can be considered to be “relevant inputs” as they entitle one to legitimate rewards (Boelens et al., 2017). On the contrast, in a social setting, kindness, and physical beauty earn the contributor rewards. Other examples of inputs include education, hard work, commitment and loyalty, only to mention but a few.

On the other hand, outputs can be defined as consequences, both positive and negative, reaped from the inputs. A close-ratio of inputs and outputs yields to more satisfaction. Some examples of outputs include salary, job security, recognition, reputation and promotions.

Equity theory has been widely applied in industrial and business settings in an attempt to understand the relationships that occur between the co-workers, their employers and the work. Application of this theory can be associated with various consequences in all these fields. First, employees always seek to take full advantage of the outcomes. In an environment where equity is continuously applied and is vital, people remain motivated and satisfied. In an attempt to maximize their rewards, they steer up the performance of an organization. In other words, equity immensely impacts realization of organizations’ objectives.

Another consequence of equity is the creation of a free atmosphere and reduction of distress. According to Ross & Kapitan, 2018, people get distressed upon realization of poor equity practices. Bowman, states that the individuals who get unrewarded for their inputs suffer from distress, while those getting over rewarded for their contributions similarly suffer from guilt or shame. Upholding equity, therefore, works the reverse of this, by reducing distress among persons who get ‘too little’ and ‘too much’. Therefore, upholding equity at places of work is significant to both the organization and the employees.

References

Boelens, R., Crow, B., Hoogesteger, J., Lu, F. E., Swyngedouw, E., & Vos, J. (Eds.). (2017). Hydrological territories and water equity: theory, governance, and sites of struggle. Routledge.

Bowman, R. (2016). Motivation theory and practice: Equity theory vs expectancy theory.

Fowler, D. J., & Brown, K. (2018). Data-Driven Decisions: Using Equity Theory to Highlight Implications for Underserved Students. AASA Journal of Scholarship & Practice, 14(4).

Lim, W. M. (2019). An equity theory perspective of online group buying. Journal of Retailing and Consumer Services.

Liu, Z., & Brockner, J. (2015). The interactive effect of positive inequity and regulatory focus on work performance. Journal of Experimental Social Psychology, 57, 111-116. doi:10.1016/j.jesp.2014.11.009

Pennsylvania State University (2016). Work Attitudes and Motivation—PSYCH 484. Online course lesson, Penn State World Campus, The Pennsylvania State University. Retrieved September 24, 2016, from https://psu.instructure.com/courses/1803780/modules/items/21267630

Ross, S. M., & Kapitan, S. (2018). Balancing self/collective-interest: equity theory for prosocial consumption. European Journal of Marketing.