What is equity theory?

Equity theory is a social psychological concept that was first developed by J. Stacy Adams in the 1960s. The theory posits that people are motivated to maintain a sense of fairness and equality in their relationships with others.

According to equity theory, individuals compare the ratio of their own inputs (such as time, effort, or resources) to their outcomes (such as rewards, recognition, or satisfaction) to the ratio of the inputs and outcomes of others. If they perceive an imbalance in this ratio, where they are either over-rewarded or under-rewarded in comparison to others, they may experience feelings of inequity.

When individuals perceive inequity, they are motivated to restore balance in their relationships in one of several ways. They may try to change their inputs (such as working harder or investing more time), change their outcomes (such as seeking more recognition or rewards), change their perceptions of others' inputs and outcomes, or leave the relationship altogether.

Equity theory has been widely applied in organizational settings to understand issues related to employee motivation, job satisfaction, and fairness perceptions. By ensuring that individuals receive fair treatment and rewards relative to their contributions, organizations can create a positive work environment and promote employee engagement and productivity.