{"id":9453,"date":"2017-01-17T19:15:54","date_gmt":"2017-01-17T19:15:54","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&p=9453"},"modified":"2017-04-18T22:46:31","modified_gmt":"2017-04-18T22:46:31","slug":"reading-process-based-theories","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-wmopen-introbusiness\/chapter\/reading-process-based-theories\/","title":{"raw":"Process-Based Theories","rendered":"Process-Based Theories"},"content":{"raw":"

Equity Theory<\/h2>\r\n\"Statue<\/a>\r\n\r\nIn contrast to the need-based theories we have covered so far, process-based theories view motivation as a rational process. Individuals analyze their environment, develop reactions and feelings, and respond\u00a0in certain predictable ways.\r\n\r\nEquity theory attempts to explain relational satisfaction in terms of perceived fairness: that is, people evaluate the extent to which there\u00a0is a\u00a0fair or unfair distribution of resources within their interpersonal relationships. Regarded as one of many theories of justice, equity theory was first developed in 1963 by John Stacey Adams<\/strong>. Adams, a workplace and behavioral psychologist, asserted that employees seek to maintain equity between what they put into a job and what they receive from it against the perceived inputs and outcomes of others.\r\n\r\nEquity theory proposes that people value fair treatment, which motivates them to maintain a similar standard of fairness with their coworkers and the organization. Accordingly, equity structure in the workplace is based on the ratio of inputs to outcomes.\r\n\r\nInputs are the employee's contribution to the workplace. Inputs include time spent working and level of effort but can also include less tangible contributions such as loyalty, commitment, and enthusiasm.\r\n\r\nOutputs are what the employee receives from the employer and can also be tangible or intangible. Tangible outcomes include salary and job security. Intangible outcomes might be\u00a0recognition, praise, or\u00a0a sense of achievement.\r\n\r\nFor example, let's look at Ross\u00a0and Monica, two employees who work for a large magazine-publishing company doing very similar jobs. If Ross\u00a0received\u00a0a raise in pay\u00a0but saw that Monica was given a larger raise\u00a0for the same amount of work, Ross\u00a0would evaluate this change, perceive an inequality, and be distressed. However, if Ross\u00a0perceived that Monica were\u00a0being given more responsibility and therefore relatively more work along with the salary increase, then he\u00a0would\u00a0see no loss\u00a0in equality status and not object to\u00a0the change.\r\n\r\nAn employee\u00a0will feel\u00a0that he\u00a0is treated fairly if he\u00a0perceives the ratio of his\u00a0inputs to his\u00a0outcomes to be equivalent to those around him.\r\n\r\nEquity theory includes\u00a0the following primary propositions:<\/span>\r\n
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  1. Individuals will try to maximize their outcomes.<\/span><\/li>\r\n \t
  2. Individuals can maximize collective rewards by evolving accepted systems for equitably apportioning resources among members. As a result, groups will evolve such systems of equity and will attempt to induce members to accept and adhere to these systems. In addition, groups will generally reward members who treat others equitably and punish members who treat others\u00a0inequitably.<\/span><\/li>\r\n \t
  3. When individuals find themselves participating in inequitable relationships, they will become distressed. The more inequitable the relationship, the more distress they will feel. According to equity theory, the person who gets \"too much\" and the person who gets \"too little\" both feel distressed. The person who gets too much may feel guilt or shame. The person who gets too little may feel angry or humiliated.<\/span><\/li>\r\n \t
  4. Individuals who discover they are in inequitable relationships will attempt to eliminate their distress by restoring equity.<\/span><\/li>\r\n<\/ol>\r\nThe focus of equity theory is\u00a0on determining whether the distribution of resources is fair to both relational partners. Partners do not have to receive equal benefits (such as receiving the same amount of love, care, and financial security) or make equal contributions (such as investing the same amount of effort, time, and financial resources), as long as the ratio between these benefits and contributions is similar.\r\n\r\nIn other words, Ross\u00a0perceives equity if Monica makes more money but also has more job responsibilities, because the ratio of inputs (job responsibilities) to outcomes\u00a0(salary) is about the same. \u00a0On the other hand, Ross\u00a0would perceive inequity if the ratio were different\u2014say if Monica made\u00a0more money for the same job or if Monica made\u00a0a salary equal to Ross's\u00a0but had\u00a0fewer job responsibilities.\r\n\r\nWhen an employee is comparing his\u00a0input\/outcome ratio to his\u00a0fellow workers', he\u00a0will look for other employees with similar jobs or skill sets. For example, Ross\u00a0would not compare his\u00a0salary and responsibilities to those of the magazine company's CEO. However, he\u00a0might look outside the organization for comparison\u2014for instance, he\u00a0might visit glassdoor.com<\/a> to check salaries for positions like his\u00a0at other publishing houses.\r\n\r\nMuch like other prevalent theories of motivation, such as Maslow's hierarchy of needs, equity theory acknowledges that subtle and variable factors affect people's assessment and perception of their standing relative to others. According to Adams, underpayment inequity induces anger, while overpayment induces guilt. Compensation, whether hourly or salaried, is a central concern for employees and is therefore the cause of equity or inequity in most, but not all, cases.\r\n\r\nIn any position, employees want to feel that their contributions and work performance are being rewarded with fair pay. An employee who feels underpaid may experience feelings of hostility toward the organization and perhaps coworkers. This hostility may cause the employee to underperform and breed job dissatisfaction among others.\r\n\r\nSubtle or intangible compensation also plays an important role in feelings about equity. Receiving recognition and being thanked for strong job performance can help employees feel valued and satisfied with their jobs,\u00a0resulting in better outcomes for both the individual and the organization.\r\n\r\nEquity theory has several implications for business managers, as follow:\r\n