We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Mental

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is an Equity Theory?

By Karize Uy
Updated: Mar 03, 2024

Equity theory is a concept in psychology that asserts humans will be more motivated if what they receive as compensation is equal to the efforts they give out. John Stacey Adams, a behavioral psychologist, conceived the theory in 1963. Aside from the equality itself, the theory also studies the human perception and how it affects the view of what is equal.

The theory comprises several factors, two of which are the “input” and the “output.” Input can generally refer to an individual’s contribution or effort in a certain situation, while the output is the thing that the individual gets in return for his contribution. In a familiar setting such as the workplace, the input can be the employee’s efforts and hard work for doing what he is tasked to do. In return, he gets a fixed salary and maybe a small bonus as the output. The theory of equity can also apply to the hiring of a workforce, wherein applicants might expect a higher salary that will equate to their levels of experience and skills.

The third important factor in the equity theory is the human perception. The concept of equality is very subjective and can differ from one person to another. One way of determining what is “equal” is through comparing similar situations. For example, an employee will assume that a company will provide a certain amount of salary if he sees other rival companies providing the same salary to their employers. Adams labeled these points of comparisons as “referents.”

Aside from the workplace, the equity theory can also be applied in many human relationships. In these situations, hard work and financial returns are not the only things included as inputs and outputs, respectively. Emotional gratification may be an important measurement for the concept of equality. For a married couple, for instance, a wife who makes her husband happy by cooking his favorite dinner might expect her husband to do a similar trade-off that will make her just as happy. Conflict may arise if the perceived equality is not reached.

In many situations, equity theory cites the human desire for rewards to equal their efforts. For example, an employee asks his boss for a raise if he feels he is deserving. The theory, however, also explains that a person will strive to contribute more to a situation or a relationship if he sees that he receives more output than he deserves. In both cases, the theory illustrates that humans seek to attain a sense of balance and equality.

The Health Board is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By Melonlity — On May 08, 2014

@Soulfox -- you don't just see that in the workplace. You see that in society, as well. The sense that it is somehow unfair that some people make more money or have more "stuff" than others has been a powerful notion around which political parties have been formed over the centuries.

By Soulfox — On May 07, 2014

This is exactly why companies have a strict policy against employees revealing their salaries for each other. Let's say, for example, you have Jane and John. They both do the same work and they share the assumption that each make the same salary as they have both been at the company for the same amount of time.

John learns that Jane makes more money than he does and is furious. It doesn't matter that his lifestyle does not depend one bit on what Jane makes -- the chances are good John will be furious because it is not fair (i.e. not equitable) that Jane makes more money than he does.

Share
The Health Board, in your inbox

Our latest articles, guides, and more, delivered daily.

The Health Board, in your inbox

Our latest articles, guides, and more, delivered daily.