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EQUITY THEORY
Akash Patil
CMBA4
Introduction to Equity Theory
• First developed in 1963 by John Stacey Adams
• Employees seek to maintain equity between t...
Equity Theory
1)Equity:
A person feels equitably treated when his outcome/input ratio
is equal to other person’s outcome/i...
Equity Theory
2)Under rewarded inequity / Negative inequity:
A person feels under rewarded when his outcome/input ratio is...
Inputs & Outputs
Inputs
• Individual’s contribution to
an Organization.
• Time
• Effort
• Loyalty
• Hardwork
• Commitment
...
Consequences of Inequity
Based on equity theory, when employees
perceive an inequity, they can be predicted to
make one of...
References
• Robbins, S.P- Organisational Behaviour.
pg. 183.
• Schultz, K., Schoenherr, Nembhard, D. (2006).
Equity theor...
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The presentation on Equity theory of Motivation starting with history, the theory, inputs and outputs followed by consequences of inequity gives you the detailed view of Equity theory.

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Equity theory of Motivation

  1. 1. EQUITY THEORY Akash Patil CMBA4
  2. 2. Introduction to Equity Theory • First developed in 1963 by John Stacey Adams • Employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. • The structure of equity in the workplace is based on the ratio of inputs to outcomes
  3. 3. Equity Theory 1)Equity: A person feels equitably treated when his outcome/input ratio is equal to other person’s outcome/input ratio. Individual’s outcome = Other’s outcome Individual’s input Other’s input Equitably paid workers are said to feel satisfied.
  4. 4. Equity Theory 2)Under rewarded inequity / Negative inequity: A person feels under rewarded when his outcome/input ratio is less than whom the person compare himself. Individual’s outcome < Other’s outcome Individual’s input Other’s input Equity theory states that an underpaid worker feels angry. 3)Over rewarded inequity /Positive inequity: A person feels over rewarded when his outcome/input ratio is greater than whom the person compare himself. Individual’s outcome > Other’s outcome Individual’s input Other’s input Equity theory states that an overpaid worker produce higher quality.
  5. 5. Inputs & Outputs Inputs • Individual’s contribution to an Organization. • Time • Effort • Loyalty • Hardwork • Commitment • Abilities Outputs • Organization’s return to an Individual. • Job Security • Salary • Employee benefits • Recognition • Reputation • Sense of achievement
  6. 6. Consequences of Inequity Based on equity theory, when employees perceive an inequity, they can be predicted to make one of six choices. •They change their inputs. •They change their outcomes •They distort perceptions of self •They distort perceptions of others •They choose a different referent •They leave the field
  7. 7. References • Robbins, S.P- Organisational Behaviour. pg. 183. • Schultz, K., Schoenherr, Nembhard, D. (2006). Equity theory effects on worker motivation and speed on an assembly line. Retrieved from: http://www.hbs.edu/units/tom/pdf/kschultz.pdf
  8. 8. THANK YOU FOR YOUR ATTENTION!
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The presentation on Equity theory of Motivation starting with history, the theory, inputs and outputs followed by consequences of inequity gives you the detailed view of Equity theory. Best for students, trainers, employees, etc.

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