Equity Theory

(Adams, 1963; Landy, 1989;

Beehr, 1996) 1
 Equity Theory

A version of discrepancy theory of job

satisfaction focusing on the
discrepancies between what one has
on the job and what one thinks is fair
- what one should have

2
 Equity Theory
• Social comparison takes place
• Perceived discrepancies between ratios may
produce tension or dissonance
• Amount of discrepancy corresponds to the amount
of tension the individual experiences
• Amount of tension corresponds to the amount of
energy an individual expends to alleviate the
discrepancy

3
 Equity Theory
• Inputs
- factors considered by the individual
that contribute to their work -
knowledge, skills and abilities
• Outcomes
- factors considered by the individual to
have personal value - money,
promotion, praise
4
 Equity Theory
• I/O < I/O (Underpay)
• 5/10 10/10
• Inequity

• I/O = I/O (Equity)

Equity
• 10/10 = 10/10

• I/O > I/O (Overpay

• 5/10 10/10
• Inequity

5
 Equity Theory
• Strengths
- predicts behavior in underpayment
conditions
• Weakness
- does not predict overpayment conditions
- does not account for individual
differences impact upon equity
6