Adam’s Equity Theory of Motivation

Introduction to Equity Theory of Motivation

John Stacy Adams introduced Equity Theory of Motivation in 1963. John Stacey Adams was one of the renowned behavioral psychologists. This Equity Theory of Motivation is also known as the Process Theory of Motivation. This theory advocates that the amount of rewards that the people receive, when compared to their sense of contribution, influence the motivation of the people. This theory advocates the balance of input and output of the employees. One should maintain a balance between employees input like hard work, skill, expertise, enthusiasm and employees output like salary, benefits and recognition for motivation in people. This theory provides insight on the following key points:

  • Reasons for people to work hard or to not work hard
  • Impact of the individual performance
  • Rewards and probable work outcomes

Assumptions on Equity Theory of Motivation

This theory is based upon the assumption that employees get demotivated from their job and employer when they believe their input to the organization is greater than the output that they receive from the organization. Different employees show different responses to such imbalance situations. Due to this, some employees may get inattentive at work and in worst case, may quit the job. This is due to the disparity in perception of employees on input and output. Overall, this theory explains how the employees select behavioral actions to satisfy their needs based upon their preferred choices.

According to this theory, employees basically compare their output-input ratio with the output-input ratio of other employees. Such comparisons generally lead to three situations. 

Equitable Rewards

The first situation is when the output-input ratio of the employee is equal to the output-input ratio of other employees. Employees think this condition is ideal and fair.

More than Equitable Reward

The second situation is when the output-input ratio of an employee is greater than that of other employees. Employees view this situation as over-rewarding and inequality exists. Employees will be in a self-guilt situation. Such overly-rewarding employees perceive that there is no equal treatment for the same level of effort.

Inequitable Reward

Lastly, this is the most common condition where employees feel organization is not recognizing their hard work. Employees’ output-input ratio is less compared to the output-input ratio of other employees. This will lead to demotivation among the employees.

The theory also suggests that there can be different references for the comparison of the ratio. Most of the comparison is with co-worker of the organization. The comparison can be with the neighbors regarding the lifestyle, house, car and even in children. Similarly, the comparison can be among friends at school, work, in terms of grades, rewards, salary and others. Comparison is the natural trait of human beings. There is a comparison between past and present jobs as well and motivation acts accordingly.

Referent Group

The act of comparison by humans, has created four referent groups in Adam’s Equity Theory of Motivation.


People compare their experience in different positions in the current organization. A person can work in different positions in the same organization like HR, marketing, customer relationship, logistics etc.


People compare their personal experience with the similar position (situation) outside the organization. A person can compare one’s experience with that of friends or roommates who work in different organization.

Other Inside

The comparison is done by the people with other groups or individuals of the same organization. This involves how their colleagues with similar conditions are performing in their organization.

Other Outside

People compare themselves with groups or individuals of other organizations.

The major proposition of Adam’s Equity Theory of Motivation is that people always work to increase their output which can offer any form of rewards. People look forward to maximizing their rewards by comparing it with others. By developing an accepted system, groups look to maximize the rewards collectively. The system of equity will be developed automatically in the group and all members of the group will follow that system.  Group can motivate the member to behave equitably by showing profits of working equitably rather than inequitably.  The members who behave equitably are rewarded and vice-versa. The theory suggests that inequitable behavior leads to distress.  Person who receives more feels the guilt and the person who receives less feels the anger. 

Criticism to Adam’s Equity Theory of Motivation

There have been many criticisms for this theory. Adam’s Equity Theory of Motivation has different criticism towards its assumption and application. Many of the researchers have questioned the simple model of this theory. Researchers argue that the theory has failed to consider demographic and psychological factors affecting the perception of fairness and equity. 

Some researchers also questioned its environmental validity. This theory lacks real world evidence. In a research conducted by O’Reilly and Puffer in 1989, it was evident that sanctions used in the group increased the motivation in the group. When the good performer gets reward and the under performer gets punishment, this increases the motivation and satisfaction in the group. 


Adam’s Equity Theory of Motivation states that the organization can expect increasing motivation and good results when the employees feel that they are treated fairly and equally. The different situation of this theory depends upon the output-input ratio.  There can be different references for the comparison. People can compare themselves with co-workers, neighbors, friends, roommates and with themselves. This behavior of comparison creates stress and mental pressure in people which can lead to different solutions like changing of input and output, changing of referents, new jobs and change of perception. 


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  • Industrial and organizational psychology: An applied approach

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