In 1963, J. Stacy Adams, a workplace and behavioral psychologist, created equity theory and asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it and compare these to the perceived inputs and outcomes of others. In simple language,
people expect to get back what they put in and that expectation is influenced by what they see others get back for what they put in.
For employees, inputs can consist of any of the following, ranging from the tangible to the less tangible: time, education, experience, effort, loyalty, hard work, commitment, ability, adaptability, flexibility, tolerance, determination, enthusiasm, personal sacrifice, trust in supervisors, and skill.
On the other side of the equity theory equation, outcomes similarly consist of tangible and less tangible examples: job security, salary, employee benefit, paid expenses, recognition, reputation, responsibility, sense of achievement, praise, thanks, and stimuli. According to Adams, inequity not only impacts those who receive less, but also impacts those who receive more, who in turn, feel a sense of guilt.
Although established in 1963, equity theory has more relevance now as the number of employees who view the workplace as inequitable is growing and those who will voluntarily leave their jobs are estimated to reach 35% by 2023. This will create a financial burden that will be too great to overcome for most. However, for those who innovate and find a way to design equity into the workplace, this represents a potential source of competitive edge.
To learn more about the benefits of designing equity into the workplace, click here.