Category: Adam’s Theory of Inequity

The research on equity from the organizational justice has a pretty long history, and has some interesting insight about how an individual’s organizational position influences the self-imposed performance expectation. Following briefly summarizes it:
It has been observed that when an individual moves two-levels up in the organizational hierarchy with no increase in pay, he/she creates a higher self-imposed performance expectation than a one-level move up with modest increase in pay! Similarly, a two-level demotion in the organization hierarchy with no reduction in pay creates a lower self-imposed performance expectation compared to a one level demotion with a modest decrease in pay!
This clearly indicates that organizational position is considered more important than pay in determining the level of person’s performance expectations.

In extreme cases unintended consequences of such inequity and organizational injustice could be manifested in a dysfunctional behavior. Examples of such behavior are aggressive reactions or other forms of violent and deviant behavior that harm both their colleagues and organization. The fortunate piece of the story is that there are very few such instances.

If we really look at the theory that we have been discussed, it was really inequity that we were setting as the subject matter and not equity itself. As research has progresses, certain revisions have been suggested to this basic equity theory. One such interesting approach has been suggested by classifying individuals based on their preference for equity. These are:

Benevolent refers to those individuals who are comfortable with an equity ratio lesser than that of their comparison other. The Entitled on the other hand are people who are comfortable with equity ratio greater than that of their comparison others. The Entitled behavior is generally observed in the younger generation of the affluent families. If we were to call Benevolent as givers, the Entitled could be called as takers.

We could remember the above using the following diagram.

When in a situation of inequity, and individual could find one of the seven strategies listed below:

Research has indicated that those people who feel that their compensations are equitable have displayed greater job satisfaction and organizational commitment. Thus a lot of the equity theory helps explain important organizational behavior. This theory could also be extended to manage important labor relationships.

Sometimes one finds oneself unmotivated and angry about the compensation/hike that was granted by the organization one worked for.

If one were to reflect on what could have lead to this discomforting feeling and we map it on to the equity theory, we realize we could develop a output-input ratio based on the expectations and their fulfillment.

Let us begin by defining an important concept that would follow this ratio that we have just mentioned – Inequity

Inequity – is a situation in which a person perceives he or she is receiving less that he or she is giving, or is giving less than he or she is receiving.

Looking back the situation described earlier, a person would examine the contribution portion of the exchange relationship – the individual considers their input (own contribution) in the relationship and their outcomes (the organization’s contribution) in the relationship. We could summarize this in the following diagram:

In essence, inequity leads to the experience of tension, and the tension motivates people to act in a manner to resolve the inequity – this was proposed by Stacy Adams.