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Adams’ Equity Theory – the theory of motivation all modern organizations desperately need!

7 min read

The world isn’t the same anymore. Work has become stressful and competition has become fierce. 

There is no secret ingredient. It’s just you – A quote from Kung fu Panda probably best describes the situation of employees at work.  

To outperform others consistently, an individual has to do a lot of things. One of them is to stay motivated. Staying on the top of your game is hard, not impossible. Before you go into 2021 motivation tips, know that a good ol’ fella named J. Stacy Adams solved this problem with his equity theory in the 1960s. Adam’s equity theory is what we will talk about today. 

Equity Theory of Motivation Definition 

The motivation equity theory calls for a balance between employee’s inputs and outputs. If employees have a good grasp on what they are doing and what they want to achieve and how it will benefit them, they’re more likely to stay motivated. It focuses on the premise that to be motivated, they’re being rewarded fairly for the contribution from their side.   

If the rewards don’t match the efforts, employees feel distressed and demotivated. Result: Less motivation, fewer efforts, and bad results going forward. 

The concept of equity and exchange relationships derived from it will help you understand this theory in a better way. 

Overpaid Inequity 

When an individual perceives that his derived outcomes are significantly more than the inputs, concerning others. 

Underpaid Inequity 

When an individual perceives that his derived outcomes are significantly less than the inputs, concerning others.  


When an individual perceives that his derived outcomes are equal to the inputs, concerning others. 

Thus, adams equity theory shows how motivation is derived from the working environment around us. If someone thinks they’re treated fairly, they’ll contribute more. If not, they won’t perform well at all. It is where bias comes into the picture and if not addressed on time, it leads to good employees exiting the organization at the first opportunity they get.  

How Does Stacy Adams Equity Theory Work? 

There are two kinds of factors. Inputs and Outputs. It is helpful to consider and utilize them while working towards elevating employee experience to the next level at an organization. Let’s have a detailed look at types of Input and Output factors for Adams’ equity theory. 

Inputs (Some common ones): 

  • Effort. 
  • Loyalty. 
  • Hard work. 
  • Commitment. 
  • Knowledge and experience. 
  • Skills. 
  • Ability. 
  • Adaptability. 
  • Flexibility. 
  • Acceptance of others. 
  • Determination. 
  • Enthusiasm. 
  • Trust in superiors. 
  • Support of colleagues. 
  • Personal sacrifice. 

Outputs (Some common ones): 

  • Recognition. 
  • Financial rewards (such as salary, benefits, perks). 
  • Reputation. 
  • Responsibility. 
  • Sense of achievement. 
  • Praise. 
  • Stimulus. 
  • Sense of advancement/growth. 
  • Job security. 

Not all inputs or outputs can be quantified and measured easily. However, the theory suggests that managers should help employees manage given input and expected output. Better balance leads to an increase in employee satisfaction. 

It’s best to create a sense of fairness within a team to ensure maximum levels of motivation, engagement, and performance. 

How This Theory Helps Organizations 

Adams equity theory of motivation has become popular among organizations as it helps HRs think and set better decision-making processes at the core. The fact that removal of bias and fairness are important for motivation and employee wellbeing, has helped organizations prioritize their relationships with the employees. The ones who have adopted this theory have seen better engagement, higher retention rate, and overall a productive workforce. This is why motivation equity theory is great to implement in modern times. 

Equity Theory on Motivation Example 

Let’s take the example of two employees in the marketing department. Both hold the same position, responsibilities, and have the same set of objectives to achieve over some time. They accomplish the objectives by putting in efforts based on an action plan. However, during the appraisal process, only one employee is given a fair hike while the other isn’t given any hike. Once the second employee learns that his colleague is enjoying a better effort-to-reward ratio, he feels demotivated and undone by organizational bias. 

On the other hand, if both are treated fairly, there’ll be healthy competition and two satisfied employees looking forward to doing more amazing work for their company. 

Steps to Stop Workplace Demotivation 

Action is the best form of reaction to negative happenings at a workplace. Here are a few steps leaders can follow to stop demotivation at their workplace: 

Healthier, happier, and motivated employees lead to a more successful workplace. 

To End… 

In some workplaces, theories like Adam’s equity theory don’t get any mention or recognition. While in employee-centric organizations, they play a significant role. At the end of the day, it’s about managing the performance of your employees in the best way possible.  

Initially, it looks like a lot of manual work. With Keka, it’s not. This friendly PMS tool has goal-setting, 360-degree feedback, goal alignment, and much more. You can monitor, analyze, track, and evaluate employee performance to ensure that goals are achieved on time.  

Get a free demo of Keka’s Performance Management Software!  

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    Meet the author

    Keka Editorial Team

    A bunch of inspired, creative and ambitious youngsters- that’s Keka’s editorial team for you. We have a thirst to learn new subjects and curate diverse pieces for our readers. Our deep understanding and knowledge of Human Resources has enabled us to answer almost every question pertaining to this department. If not seen finding ways to simplify the HR world, they can be found striking conversations with anyone and everyone , petting dogs, obsessing over gadgets, or baking cakes.


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