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Business Behavior. Equity Theory by Adams Term Paper

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Updated: Aug 14th, 2021

Motivation plays a crucial impact in organizational performance and productivity level. Equity Theory by J. S. Adams was developed in 1963. It describes motivation factors and their role in the productivity and satisfaction of employees. Adams states that workers find that their jobs offer relatively little opportunity for satisfying their deeper needs. He studies relations between the inputs and job outcomes. These factors determine in part a worker’s social status, and he expects, we assumed, his job rewards to be in line with his social investments. I selected this topic because it helps a manager to understand close relations between under-rewarded or over-rewarded employees and the correlation between the inputs and outputs as a result of different motivation levels.

Literature Review

The main layer of literature discusses the theoretical background of the theory and its practical application. Such authors as J. Reeve and J. Baldoni pay attention to the main principles and historical development of equity theory. Yet beyond this misunderstanding, there are deeper questions that remain to be answered: such as whether today’s managerial practices actually encourage self-reliance or smother it and, indeed, whether management actually has much of an effect on the individual’s motivation at all. T. Beeler and K. W. Thomas analyze a correlation between intrinsic motivation and commitment. They pay special attention to intrinsic motivation and its impact on productivity. The book Equity: Theory and Research by E. Walster et al (1978) proposes a detailed analysis of Adams’ equity theory and other researches on the topic of motivation and productivity.

The other layer of literature is research studies which describe equity theory and its practical application. In the article, Allen and White (2002) investigate the problem of equity sensitivity and single out two types of under-reward situations. While it is logical to assume that workers want high rewards from management, it is not logical to assume that they want or expect an equal reward when compared with one another.

Cowherd and Levine (1992) analyze the problem of product quality and its relation to pay equity and motivation. Seta and Seta (1992) and Gardner and Daniel (1998) state that the reward a worker expects bears some relationship to his social investments or the characteristics he brings to his job. As described in Seta and Seta (1992) the social investment factors managers worked with included age, seniority, education, ethnicity, and sex. Hochwarter (1996) and Guerrero et al (2007) show that need satisfaction as a goal of human behavior has long been an important concept among workplace psychology, and it has an important position in the reward theory of motivation in their research.

Reward by management and by the group implies that a form of reward satisfies the individual’s needs; i.e., needs for job status, pay, seniority, relationships with co-workers, etc. Yet, the predictions the researchers made thus far did not attempt to specify productivity from the needs which an individual uniquely brings to his work situation.

I agree with Walster et al (1878) that too much status congruence in a group may make for problems of communication by failing to restrict communication enough to those required by the technical organization and thereby reducing the effectiveness of the group. Too little status congruence in a group may make for problems of communication by restricting communication too much to the minimum technical requirements of the job and thereby reducing directly the efficiency of the group and indirectly its effectiveness.

Allen and White (2002) underline that Adams does not mention effectiveness, the study also seems to suggest that from conditions of high-status congruence the social and not the task leader is likely to emerge, whereas, from conditions of low (but not too low) status congruence, the task and not the social leader is likely to emerge. Similar to Allen and White, Baldoni (2004) states that in our modern world where status factors can easily get out of line, the need to maintain social congruence thus becomes more important and not less important because this is felt as the condition of social certitude. But this need is so rooted in anxiety that it often manifests itself in forms of behavior that do not bring about the condition of social certitude they seek.

An employee may try to correct a status deficiency, for example, by becoming too much an “eager beaver” or by seeking approval from his fellow workers too much and in forms that do not endear him to them. And in the absence of any understanding of any other ways in which this “certitude” can be realized, these forms of compensatory behavior are likely to be common. Allen and White expand Adams’s research and investigate two types of under-reward situations. “More specifically this study focuses on the ability of Equity Sensitivity to discriminate between the responses of three different classifications of individuals posited by the theory (Benevolent, Equity Sensitives and Entitled)” (435).

In contrast to Allen and White, and Baldoni, Hochwarter et al (1996) do not pay much attention to inputs and outputs but concentrate on “personality variables and their impact on perceptions of equity” (457). One of the more hopeful signs for an improved understanding of work motivation is that this casual attitude toward assumptions is beginning to disappear. Further, the sense of competence probably plays a key role in affecting job success, especially in those jobs where initiative or innovation is essential. A man who trusts his own ability to influence his environment will actually try to influence it more often and more boldly than someone who is inclined to let the environment influence him.

The value of this research is that it expends Adams’s theory and evaluates negative attitudes in the workplace. “Research has shown that high negative attitudes individuals tend to significantly exaggerate the extent of failure-related stimuli and interpret ambiguous stimuli more negatively” (Hochwarter 457).

In their research, Guerrero et al (2007) found ample evidence of worker communication regarding the norm for a particular job, and generally, the person who was identified with the job was supposed to pass the word on expected output to newcomers. On noncomparable jobs, workers were expected to find out from the timekeeper what management’s standard was and to peg their production accordingly. The workers knew the method for translating management’s standard into units of production per hour, and a newcomer was generally tipped off on how to make the calculation.

In contrast to other research studies, Cowherd and Levine (1992) analyzed the impact of motivation and pay equity on two groups of employees: low-level employees and top management. The researchers found that “there is a substantial positive relationship between product quality and interclass pay equity for both hourly workers and lower-level exempt employees. Analyses of alternative models demonstrate that these results are robust” (435).

A level of output tended to conform to the norm. Because the norm was not expressed in terms of pieces produced per hour or a similar concrete measure, we called on-the-line production a percentage that fell within the middle range of the productivity array. Beeler (2006) proposes to readers a general overview and analysis of the Adams equity theory, but unlike other researchers, he states that modern managers frequently advise frustrated people to find some outside avenues for their pent-up ambitions and skills. The pity of it is that an unrewarding job environment is pretty much taken for granted, especially for the middle-aged, the non-college trained, and the production worker in general.

Discussion Section

In general, job value the heart of job evaluation systems, suggests that various jobs are differentiated in terms of value to the organization through agreed-upon criteria such as type of personal relationships involved or responsible for the safety of others. All the researchers single out that the importance of membership/seniority which means that time in a pay grade is the important determinant of pay. Individual performance/merit usually is based on outputs, outcomes, or effects of performance. Also, they underline that group performance is also sometimes referred to as gain-sharing.

It is frequently reflected in group bonuses that, for public organizations without profit and loss, can be determined by performance relative to standards. “In formulating equity theory, Adams (1963, 1965 ) was primarily concerned about how the relationship between the input-output ratio of two individuals would affect each individual’s perception of fairness. From this analysis, equity in a social setting exists if the perceived input-output ratio of one individual is equal to that of another” (Seta and Seta

47). Pay based on knowledge means that the greater the number of jobs the individual can perform, the higher the pay. It is a special application of job worth. Work activities can be analyzed at several different levels. The level of output that is involved is something greater than what an experienced worker turned out on a particular job.

I think Adams offers a number of interesting hypotheses. He singles out the absence of a certain kind of trouble when status congruence exists. Members of groups with high-status congruence are “less subject to discontents or compensatory behavior” and are less likely to view each other with “feelings of threat, envy, or contempt” (Thomas 65). High-status congruence in a group facilitates individual and group adjustment in that it provides “a generally accepted rationale for the position which an individual occupies in the group” (Thomas 67). This very condition of social security prevents the emergence of superior performance which in turn would upset it.

Low-status congruence in a group may motivate some individuals to superior performance and increased productivity and thus tend to bring things more into line. The research studies show that pay has also been standardized using piece rates and bonuses for production compensation to correspond to this level of design. The levels of knowledge, skills, abilities and personal attributes required for tasks often vary, as does the amount of time needed for performance. Functions are broader collections of tasks that may comprise an entire job or even an organizational unit. For example, compensation might be the role performed by a consultant assigned to a central personnel agency.

The value of the research studies (Allen and White 2002; Cowherd and Levine 1992; Seta and Seta 1992; Gardner and Daniel 1998) is that they expand Adams equity theory and go beyond mere description and analysis. They apply Adams’s theory to new settings and investigate the impact of certain factors on motivation and productivity. Insofar as high status and high-status congruence are determinants of social position in a group, these conditions should predict conformity to output norms or on-the-line production. It would then follow that all other conditions of status and status congruence would tend to be associated with deviant productivity to the degree that these other conditions are related to low social position or non-membership in the group.

If I were writing another research project, I would concentrate on equity and productivity between members of one group and the possible application of equity theory to group dynamics and its impact on group dynamics. The determinants of motivation and equity can be studied from several different points of view. First, investigators can attempt to identify the personality characteristics of group members to see what uniformities in personality seem to be differentiating leaders and non-leaders. Second, motivation can be studied from the point of view of the dynamics of behavior as distinguished from member behavior.

Third, the determinants of motivation can be studied from the point of view of the social characteristics of individuals and groups. This research will help to determine the extent to which various workgroups depart or deviate from the norms and traditions perception of pay. Also, it will help to analyze the impact of pay and equity on group dynamics and the average productivity of the workgroups over time.

Works Cited

  1. Allen, R. S., White, Ch. S. Equity Sensitivity Theory: A Test of Responses to Two Types of Under-Reward Situations. Journal of Managerial Issues, 14, (2002): 435.
  2. Baldoni, J. Great Motivation Secrets of Great Leaders. McGraw-Hill; 1 edition, 2004.
  3. Beeler, T. The 7 Hidden Secrets of Motivation: Unlocking the Genius Within (Your Coach in a Box). Your Coach in a Box, 2006.
  4. Cowherd, D. M., Levine, D. L. Product Quality and Pay Equity between Lower-Level Employees and Top Management: An Investigation of Distributive Justice Theory. Administrative Science Quarterly, 37, (1992): 435.
  5. Gardner, S. E., Daniel, Ch. Implementing Comparable Worth/pay Equity: Experiences of Cutting-Edge States. Public Personnel Management, (1998): 475.
  6. Guerrero, K. L., Andersen, A. , Afifi, A. Close Encounters: Communication in Relationships, 2nd edition. Sage Publications, Inc, 2007.
  7. Hochwarter, W. A., Stepina, L. P., Perrewe, P. L. Always Getting the Short End of the Stick: The Effects of Negative Affectivity on Perceptions of Equity. Journal of Managerial Issues, 8, (1996): 457.
  8. Reeve, J. Understanding Motivation and Emotion. Wiley; 4 edition, 2004.
  9. Seta, J. J., Seta, Ch. E. Personal Equity-Comparison Theory: an Analysis of Value and the Generation of Compensatory and Noncompensatory Expectancies. Basic and Applied Social Psychology, 13, (1992): 47.
  10. Thomas, K. W. Intrinsic Motivation at Work: Building Energy and Commitment. Berrett-Koehler Publishers, 2002.
  11. Walster, E., Walster G.W. & Bershcheid, E. Equity: Theory and Research. Allyn and Bacon, Inc, 1978.
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