case study of equity theory

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• 22 Apr 2024
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When Does Impact Investing Make the Biggest Impact?

More investors want to back businesses that contribute to social change, but are impact funds the only approach? Research by Shawn Cole, Leslie Jeng, Josh Lerner, Natalia Rigol, and Benjamin Roth challenges long-held assumptions about impact investing and reveals where such funds make the biggest difference.

• 27 Apr 2023
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Equity Bank CEO James Mwangi: Transforming Lives with Access to Credit

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• 18 Apr 2023

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The Color of Private Equity: Quantifying the Bias Black Investors Face

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• 30 Nov 2020
• Working Paper Summaries

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Do Private Equity Buyouts Get a Bad Rap?

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The Economic Effects of Private Equity Buyouts

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Lazy Prices

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Investing Outside the Box: Evidence from Alternative Vehicles in Private Capital

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• 29 Aug 2018

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• 12 Feb 2018

Private Equity, Jobs, and Productivity: Reply to Ayash and Rastad

In 2014, the authors published an influential analysis of private equity buyouts in the American Economic Review. Recently, economists Brian Ayash and Mahdi Rastad have challenged the accuracy of those findings. This new paper responds point by point to their critique, contending that it reflects a misunderstanding of the data and methodology behind the original study.

• 19 Sep 2017

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• 04 Aug 2017

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• 12 May 2017

Equality and Equity in Compensation

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• 03 May 2016

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Partnerships are essential to the professional service and investment sectors. Yet the partnership structure raises issues including intergenerational continuity. This study of more than 700 private equity partnerships finds 1) the allocation of fund economics is typically weighted toward the founders of the firms, 2) the distributions of carried interest and ownership substantially affect the stability of the partnership, and 3) partners’ departures have a negative effect on private equity groups’ ability to raise additional funds.

• 15 Feb 2016

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This paper studies the asset selection of private equity investors and the risk and return properties of passive portfolios with similarly selected investments in publicly traded securities. Results indicate that sophisticated institutional investors appear to significantly overpay for the portfolio management services associated with private equity investments.

Equity Theory: Definition, Origins, Components and Examples

In any managerial role, understanding what drives employee motivation is crucial for success. Equity theory offers valuable insights into this aspect, focusing on how perceptions of fairness can significantly impact workplace enthusiasm and efficiency. This article delves into the history, fundamental principles, and components that make up this important theory. It also provides actionable strategies for managers to maintain a balanced and motivated workforce by applying equity theory.

See also: Alderfer’s ERG Theory

What is the equity theory of motivation?

Equity theory is central to understanding how employees’ motivation in the workplace is influenced by their perception of fairness . According to this theory, employees maintain a mental record, akin to a ‘ledger,’ that keeps track of what they contribute to their job and what they receive in return. These contributions or ‘ inputs ‘ could range from the amount of effort they put into tasks, their skill level, educational background, and overall work experience. In contrast, ‘ outputs ‘ or rewards can include things like salary, additional benefits, and opportunities for career advancement (1).

When it comes to gauging their level of motivation and job satisfaction, employees often compare their own input-output balance to that of their co-workers. If an employee feels that this balance is skewed in comparison to others, there’s a high chance they’ll become less enthusiastic and content with their job role. This could, in turn, affect their performance and overall productivity.

See also: Expectancy Theory Of Motivation

However, if an employee thinks that their contributions and rewards are on par or better than their colleagues, they are likely to feel a higher sense of motivation and job satisfaction. This insight, grounded in equity theory , can be a useful tool for managers and business owners to ensure a motivated and content workforce.

The origins of equity theory

Equity theory came into prominence in 1963 through the work of John Stacey Adams , a behavioural and workplace psychologist. The theory aims to provide insights into relational satisfaction based on the concept of perceived fairness. Adams developed this theory as a way to fill a noticeable gap in the psychological understanding of how individuals perceive inequities, a concern that has been particularly significant for employers and governmental bodies, as it directly influences employee attitudes and behaviours towards their organisations (2).

Drawing on pre-existing research in both sociology and psychology, Adams reasoned that the concept of equity goes beyond the simple economic measurements of being overpaid or underpaid. Instead, it involves intricate cognitive and psychological processes that are influenced by social context. This means that the assessment of what is deemed ‘ fair ‘ or ‘ unfair ‘ is socially constructed and is more nuanced than straightforward financial calculations.

See also: Theory X And Theory Y, Douglas McGregor

The significance of equity theory is two-fold. On an organisational level , understanding these principles can help mitigate financial repercussions that arise from negative employee behaviour, such as decreased productivity or higher turnover rates. Concurrently, the theory holds broader social importance , as it offers a framework for promoting fairness and justice in interpersonal interactions and relationships. By doing so, it aims to guide the regulation of both organisational outcomes and social justice (3).

Theoretical Foundations

As mentioned, Equity Theory is a construct that draws its foundational principles from three key theories within the realms of social science and psychology.

Social Exchange Theory

The Social Exchange Theory serves as one pillar, suggesting that the essence of social interactions is based on individual assessments of the pros and cons associated with a given relationship. It maintains that people remain in relationships as long as they perceive the benefits to outweigh the costs.

Social Comparison Theory

Another cornerstone is the Social Comparison Theory. This theory details the cognitive processes people employ to gauge whether the distribution of rewards and penalties in a relationship is equitable. It was incorporated into Equity Theory based on earlier evidence which revealed that employees tend to perceive a distribution of rewards as unfair if they find that their contributions surpass those of their peers within the same organisational division.

Cognitive Dissonance Theory

Lastly, the Cognitive Dissonance Theory plays an instrumental role in understanding how individuals cope with the emotional turmoil triggered by incongruent beliefs or cognitions. This theory further clarifies how people are motivated to relieve this tension either through passive acceptance or proactive steps to alter the situation.

By synthesising elements from these three core theories, Equity Theory offers a holistic explanation that encompasses the nature of human relationships, the cognitive evaluation mechanisms at play, and the ensuing emotional and behavioural reactions to these evaluations. This combination allows for the development of strategies to manage interpersonal relationships effectively, both within and outside organisational settings (4).

See also: Herzberg’s Motivation-Hygiene Theory: Two-Factor

Components of the equity theory of motivation

The equity theory of motivation fundamentally rests on two core concepts: the effort a person invests, often called ‘inputs’, and the rewards a person receives, known as ‘outcomes’. These two components play a critical role in shaping an employee’s level of motivation.

Inputs, they can be broadly defined as the contributions an individual makes to secure some form of reward. This can range from the hours spent working and the responsibilities taken on, to the level of loyalty exhibited toward an organisation and the overall enthusiasm for the job at hand. Employees often make a distinction between elements they can control, such as punctuality and communication skills, and those that are beyond their control, like the level of training provided by the employer or their years of service in the company.

Outcomes – Outputs

Outcomes are the compensations or benefits received in exchange for these contributions. Sometimes these rewards can be easily quantifiable, like a paycheck, job stability, or fringe benefits like healthcare packages and time off. However, not all outcomes can be measured in concrete terms. Some are more elusive but equally significant, like gaining respect from colleagues, building a solid professional reputation, or deriving a sense of satisfaction and pride from your own work.

It’s essential that the worth assigned to the outcomes should, in an ideal world, mirror the significance of the inputs. For example, someone who has invested in higher education might anticipate that their advanced qualifications will lead to superior job prospects.

See also: McClelland’s Three Needs Theory: Power, Achievement, And Affiliation

Factors that affect equity theory

The concept of equity theory incorporates two key elements known as ‘ referents ’ and ‘ moderating variables ’. These components can shape how a worker views fairness.

Referent groups

In the workplace, employees tend to form judgments about the fairness of their treatment by drawing up a range of comparisons, often referred to as referent groups. These referent groups come in four distinct categories.

• Self-inside: An employee may use a ‘Self-inside’ benchmark, drawing on their own previous experiences within the same organisation.
• Self-outside: the ‘Self-outside’ referent is used when an employee compares their current situation with their own experiences in other organisations.
• Other-inside: An employee might employ the ‘Other-inside’ referent, where they assess their own inputs and outcomes against those of another colleague within the same company.
• Other-outside: Lastly, the ‘Other-outside’ referent involves measuring one’s own situation against that of individuals in comparable positions but in different organisations.

By employing one or more of these referent types, either consciously or unconsciously, employees form a nuanced view of how equitably they are being treated. For example, an individual who previously felt underappreciated at another company might find themselves more acknowledged in their current role. In this instance, they are likely to use a ‘Self-outside’ comparison, leading them to the conclusion that they are currently in a more equitable employment situation. This understanding not only informs the employee but also offers actionable insights for management to maintain a balanced and motivating work environment (5).

Moderating variables

Moderating variables like educational background and years of experience play a crucial role in shaping an employee’s view of fairness in their work setting. For instance, individuals with advanced education are often inclined to draw upon their broader industry network when making comparisons about fairness, looking beyond their current organisation. Conversely, those who have built up a longer tenure either in their role or within the same company tend to use internal benchmarks or colleague comparisons as their measure for fairness. Employees with less experience, however, are likely to rely on their own personal knowledge and understanding when assessing what is fair.

Five Key Principles

Now that we have looked at the main components of Equity Theory, let’s examine the five key principles that explain the dynamics of equity in interpersonal relations:

• According to the theory, human interactions operate on an equity norm, meaning people inherently seek a fair exchange where their contributions are adequately rewarded. Within a collective setting, this principle implies that group members who abide by this equity norm are positively reinforced, while those violating it face consequences.
• The second principle revolves around the mechanism for assessing equity, which involves comparing one’s own contributions and benefits to those of another individual. People may either compare themselves to a specific individual, or to a broader societal measurement, which could include universally accepted standards or pre-established social norms. A person may even use their own past experiences as a point of reference to evaluate current rewards and contributions.
• Thirdly, the theory addresses the conditions under which perceptions of inequity arise. For example, in a work setting, if employees perceive a disconnect between their professional credentials, like education and responsibilities, and the rewards they receive, such as pay or job security, they will likely experience a sense of inequity, especially when comparing their gains to what they believe others are receiving.
• The fourth key principle illustrates that perceptions of inequity can result in psychological dissonance that may manifest as emotional distress. The disparity between one’s own outcomes and that of another can evoke negative emotions like anger when the individual perceives they are receiving less, or guilt when they feel they are getting more than their due. This emotional dissonance is amplified depending on the level of perceived inequity and is not limited to professional settings but also extends to familial and other personal relationships.
• Lastly, the fifth principle posits that individuals will naturally attempt to restore a sense of equity to relieve the emotional strain caused by perceived inequity. The theory enumerates seven distinct coping strategies, ranging from actively altering the distribution of rewards and contributions to more psychological approaches like altering one’s own perception of the situation. These strategies offer a blueprint for individuals to navigate the complexities of equity, whether in a work environment or in personal relations (6).

By understanding these five foundational principles, it is possible to better grasp the intricate complexities of equity and inequity in various relational contexts, and thereby gain insights into managing interpersonal dynamics more effectively.

See also: Model Of Motivation: ARCS Instructional Design

How to apply the equity theory of motivation in the workplace

Understanding your team’s motivation is crucial, and the framework provided by Equity Theory can be quite enlightening. To implement this theory effectively in your workplace, consider these three core strategies:

• Establish fairness: If you are in a position of seniority, one of your first priorities should be to set up a fair reward system. Make it a point to offer equal rewards for equal amounts of work. Regular team meetings can be a good venue to make sure everyone feels recognised for their contributions.
• Benchmark compensation: Salary is often at the heart of how team members judge their treatment at work. To keep your team satisfied, align your compensation packages with the market standards. Doing a bit of market research, for example, by looking at online databases to check competitive salaries, can arm you with the necessary information for defining appropriate compensation levels.
• Understand individual preferences and emotional states: Different team members are motivated by different things. Some may put a higher value on monetary rewards, while others might be more motivated by job satisfaction or opportunities for growth. Personalised discussions can offer you a clear idea of what each team member values most, allowing you to formulate a plan that keeps everyone engaged and satisfied. Similarly, emotional factors can also come into play. If a team member feels under-rewarded, they may develop feelings of resentment that could lead to decreased performance. On the other hand, over-rewarding can cause guilt, affecting morale in a different way. Therefore, emotional considerations should not be underestimated when applying Equity Theory.

In summary, equity theory provides a comprehensive framework for understanding the complexities of motivation in the workplace. Rooted in decades of academic research, this theory explains how employees weigh their contributions against the rewards they receive, and how these perceptions influence their overall job satisfaction and productivity. Managers who make use of the insights offered by equity theory can create a more harmonious and effective work environment. By being aware of the individual needs and expectations of their team, they can create a work culture that not only values fairness but also promotes long-term engagement and success.

• Adams, J.S. & Freedman, S. (1976). Equity Theory Revisited: Comments and Annotated Bibliography. Advances in Experimental Social Psychology, 43-90.
• Adams, J.S. (1963). Towards an understanding of inequity. The Journal of Abnormal and Social Psychology, 67 (5), 422-436.
• Chou, E., Lin, C. & Huang, H. (2016). Fairness and devotion go far: Integrating online justice and value co-creation in virtual communities. International Journal of Information Management, 36 (1), 60-72.
• Lăzăroiu, G. (2015). Employee motivation and job performance. Linguistic and Philosophical Investigations, (14), 97-102.
• Burgess, R. L., & Huston, T. L. (Eds.). (2013). Social exchange in developing relationships. Elsevier.
• Greenberg, J., & Cohen, R. L. (Eds.). (2014). Equity and justice in social behavior. Academic Press.

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Equity Theory

The basic idea, theory, meet practice.

TDL is an applied research consultancy. In our work, we leverage the insights of diverse fields—from psychology and economics to machine learning and behavioral data science—to sculpt targeted solutions to nuanced problems.

What are the characteristics you look for when choosing a job? Whether it’s dependent on geographic proximity, work hours, the type of work you’ll be doing, or the company, you likely want to work somewhere that is fair. Would you be satisfied at a job where you felt like all your efforts were going unnoticed and you were poorly compensated?

Equity theory focuses on whether there is a fair balance between an employee’s inputs (such as hard work, enthusiasm, and skills) and their outcomes (such as recognition, salary, and benefits). 1 According to the theory, striking this balance is necessary for a strong and productive work relationship. In order to maximize individuals’ rewards, organizations strive to create systems that fairly distribute resources across members of a group. Otherwise, inequalities will result in levels of unhappiness proportional to the amount of inequality.

In moving toward an understanding of inequity, we increase our knowledge of our most basic productive resource, the human organism. – John Stacy Adams in his seminal paper, “Toward an understanding of inequity”

Cognitive dissonance: An inconsistency between beliefs and behaviors that cause uncomfortable psychological tension. Typically, people are motivated to change one of the inconsistent elements to reduce the dissonance.

Equity theory: A special case of cognitive dissonance, equity theory specifies the conditions under which inequities will occur and the means by which they can be reduced or eliminated.

Inequity: In the context of work, inequity exists whenever one’s perceived job inputs and/or outcomes are opposite to what they believe are the inputs and/or outcomes of another.

Inputs: What an individual believes are their contributions, brought by them to the job, for which they expect a fair return.

Outcomes: The rewards received by an individual in exchange for their services.

Equity theory was developed in 1963 by John Stacy Adams, an American workplace and behavioral psychologist. 1 At the time of its conception, inequity was a prevalent concern in the fields of labor and government, but it was not fully understood. People were beginning to realize that equity between employees and employers was more than just an economic matter, so Adams set out to understand workplace inequity. Adams based his equity theory on Leon Festinger’s theory of cognitive dissonance: humans are uncomfortable when presented with conflicting beliefs and information, so we avoid such dissonance by changing one of the inconsistent elements. 2

Adams first distinguished between inputs, a worker’s contributions, and outcomes. 1 He emphasized that inputs are perceived by their contributor, and they may be perceived differently by an employer. Thus, there are two distinct characteristics of inputs:

• Recognition: Either the contributor or the other party of an exchange, or both, may recognize a certain attribute. 1 As long as the contributor recognizes its existence, it has the potential to be an input. However, if only the other party recognizes its existence, it is not considered an input.
• Relevance: If the contributor recognizes the existence of an attribute, its potential to be an input is dependent on the contributor’s perception of its relevance to the exchange. 1 If perceived to be relevant and the contributor expects a fair return for it, but the other party does not consider it to be relevant, problems of inequity occur.

On the other hand, outcomes were defined as a worker’s compensation, whether monetary or intangible. 1 Examples of outcomes include pay, intrinsic rewards, seniority benefits and job status, and outcomes tend to be correlated (i.e. greater pay and higher job status). Similar to inputs, perceptions of outcomes are based on recognition and relevance. If both parties recognize the relevance of an attribute, then it has potential to be an acceptable outcome. The role of relevance in perception is important when determining what is equitable: a salary increase may be inadequate if the employee wanted and had greater use for a formalized status bump.

Adams then addressed the need for a rigorous definition of inequity, as measured in his theory. 1 Influenced by Festinger, inequity was deemed to exist when someone’s perceived job inputs and/or outcomes were opposite to what they perceived another’s inputs and/or outcomes to be. Importantly, it is the perception of an individual’s and another person’s inputs and outcomes that matter, rather than actual inputs and outcomes. This distinction highlights how equity is rarely considered in isolation. Rather, employees will compare the ratio of their inputs and outcomes to the ratio of others’ inputs and outcomes. If an inequity is perceived to exist based on ratios, then the employee will adjust their inputs accordingly.

Inequity does not only occur when employees feel like they got the short end of the stick. 1 Adams theorized that if an employee knows that they are relatively overpaid, they will recognize that inequity exists and feel tense, similar to how they would feel if they were underpaid. In accordance with Festinger’s theory of cognitive dissonance, employees who recognize inequity will be motivated to reduce it, 2 with the strength of said motivation proportional to the amount of tension created. 1  

Adams extended his theory to explore how employees try to reduce the dissonance that comes with inequity. 1 People may increase or decrease their inputs or outcomes, distort their perceptions of their inputs and outcomes, distort their perceptions of others’ inputs and outcomes, or leave their position when inequities cannot be addressed. Additionally, people may change their referent group, which is the employee’s comparison group. According to Adams, there are four possible referent groups:

• Self-inside: The employee’s experience within their present organization;
• Self-outside: The employee’s experience with other organizations;
• Others-inside: Other people within the employee’s present organization; and,
• Others-outside: Other people outside of the organization. 1

Adams used both observational and experimental data to support his equity theory. 1 Using such evidence, he explored how the guilt and hostility that result from inequity can decrease motivation and productivity within the workplace, subsequently impacting quality of work.

Consequences

There are two main implications based on Adams’ work:

• If rewards are to motivate employees, they must be perceived as fair; and,
• It’s necessary to consider the referential others with whom the employee makes their equity comparisons. 1

By better understanding the consequences of perceived inequities in an organization, researchers and business stakeholders can identify potential factors of social conflict, and increase the degree of control that they exercise.

In fact, equity theory has been applied to many business settings in hopes of understanding employee satisfaction and motivation, focusing on implications for managers. 3 Those in executive positions must understand that employee behavior will be influenced by perceptions of workplace equity and positivity. To achieve management and productivity goals, employee outcomes must be maximized - but this extends beyond monetary compensation. Research also highlights how important it is for executives to understand their employees, including the variables that influence their perceptions of equity and how they adjust input and outcome levels. 4

While mostly developed for relationships within an organization (i.e. between an employee and their employer), equity theory has also extended to external business applications. 5 6 For example, high outcome policies for handling consumer complaints - such as full and longer return policies - have been suggested to be most effective. High outcome policies will make customers feel that they are being treated fairly, maximizing the possibility of their return and minimizing negative word of mouth that could hurt business. Retail workers can use these findings to inform strategies for addressing consumer complaints, producing a competitive advantage.

Controversies

Some people have criticized Adams’ equity theory for its simplicity, arguing that a number of demographic variables (i.e. age, sex, and nationality) and personality traits (i.e. wok ethic and Machiavellianism) can influence people’s perceptions of equity. 7 While Adams addressed the need for future research to determine which variables guide people’s choices of referent groups, he did not specify variables that guided people’s comparisons. 1 It is possible that perceptions of equity are much more subjective than a ratio between inputs and outcomes, which are subjective on their own.

The equity sensitivity construct was developed in 1987, in response to the criticisms above. 7 The construct proposed that people have consistent but different preferences for equity, influencing their reactions to perceived inequity. These preferences are expressed on a continuum, from preferences for extreme under-benefit to preferences for extreme over-benefit, with three classes of people:

• Benevolent individuals who prefer when their own input and outcome ratios are lower than those of their referent groups. These people prefer to under-benefit.
• Equity sensitives who prefer when their input and outcome rations are equal to those of their referent groups.
• Entitled individuals who prefer when their own input and outcome ratios are greater than those of their referent groups. These people prefer to over-benefit.

Other criticisms have highlighted how perceptions of inequity may extend beyond inputs and outcomes of relationship, such that they are also dependent on the overall system that determines said inputs and outcomes. 8 For example, two employees may be compensated equitably in relation to each other, but they may feel that the overall compensation system is unfair. In this case, while there is no inequity as defined by Adams, employees may be unsatisfied with the organization.

To address concerns of overall equity, some researchers have developed an alternative way to measure fairness in workplaces. 8 Rather than specifying a specific referent person or group, employees assess equity based on their internally derived standards for comparison. This way, comparisons will result in an overall feeling of fairness about the relationship of all elements in the employee’s environment.

Two-tier wage structures

Two-tier wage structures ensure that the top rate of pay for new employees is substantially lower than the pay for old employees. 9 Such wage structures have been controversial in workplace organization: employers favor them, while employee reactions range from acceptance to outright rejection. Under a two-tier wage structure, one’s hiring date is the only criterion for whether an employee is placed on the low- or high-wage tier. As a result, employees could have the same job titles and responsibilities, yet receive different pay outcomes for similar inputs of effort.

Applying Adams’ equity theory, researchers explored employee perceptions of equity under a two-tier wage structure and implications for workplace performance. 9 Surveying retail employees who were paid under this wage structure, low-tier employees perceived significantly lower equity. Additionally, low-tier employees in new stores had significantly higher scores compared to low-tier employees in old stores, in commitment to employer; perceived fairness of pay compared to people doing the same work for other employers (external equity); perceived fairness of pay compared to people doing the same work in their store (internal equity); and overall satisfaction with pay.

The study’s findings supported equity theory in a field setting, extending equity theory’s relevance to two-tiered wage structures. 9 The findings emphasized the need for those in management positions to consider matters of perceived equity before implementing a two-tier wage structure. While organizations cannot control all employees’ perceptions of equity, they can control the structures that influence such perceptions.

Working with individuals with intellectual disabilities

Increasing research on the role that staff play in the lives of individuals with intellectual disabilities has emerged since the 1990s. 10 While theoretical models have been used to assess specific and individual staff outcomes within intellectual disability services, they have tended to only be applicable to a narrow range of outcomes. However, a broader understanding is required to understand the role that equity plays in staff performance, who play an important role in the lives and well-being of those with intellectual disabilities. Equity theory can be used beyond the scope of traditional businesses to consider a broad range of staff outcomes including stress, burnout, turnover, behavior, performance, and satisfaction.

Based on a systematic review of the existing literature, Adams’ theory was found to explain the relationships between staff outcomes and the characteristics of staff, such that differences in weightings of specific inputs or outcomes lead to different perceptions of equity. 10 For example, males seem to give more weight to rates of pay than females, especially when since is often difficult for direct-care staff to increase their hourly wage. Staff may also differ in the referent groups they use, such that individuals with higher levels of education are more likely to determine equity by comparing their outcomes with people outside of the organization. Higher levels of dissatisfaction and turnover among more educated direct-care staff may be the reason for these external comparisons.

Staff may also differ in the ways they restore equity: higher turnover rates among males and higher rates of absenteeism among females may reflect gender differences in ways of dealing with perceived inequity. 10 Characteristics of the service user may also influence perceptions of equity, such that staff tend to have higher levels of stress and turnover when working with individuals with more challenging behaviors. Considering the variability in perceptions of equity and the impact they can have on staff and service users alike, increasing research needs to be done to understand how Adams’ equity theory plays out for staff who work with individuals with intellectual disabilities. Importantly, equity theory can capture a broader range of staff outcomes than prior theories that were used to assess isolated outcomes.

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• Adams, J. S. (1963). Toward an understanding of inequity. Journal of Abnormal and Social Psychology, 67 (5), 422-436.
• Festinger, L. (1957). A Theory of Cognitive Dissonance (Vol. 2). Stanford University Press.
• Jewczyn, N. (2010). A comparison of equity theory and expectancy theory and some implications for managers in a global work environment. Journal of Business Management and Entrepreneurship, 1 (8), 1-11.
• Konopaske, R., & Werner, S. (2002). Equity in non-North American contexts: Adapting equity theory to the new global business environment. Human Resource Management Review, 12 (3), 405-418.
• Huppertz, J. W., Arenson, S. J., & Evans, R. H. (1978). An application of equity theory to buyer-seller exchange situations. Journal of Marketing Research, 15 (2), 250-260.
• Lapidus, R. S., & Pinkerton, L. (1995). Customer complaint situations: An equity theory perspective. Psychology & Marketing, 12 (2), 105-122.
• Huseman, R. C., Hatfield, J. D., & Miles, E. W. (1987). A new perspective on equity theory: The equity sensitivity construct. Academy of Management Review, 12 (2), 222-234.
• Carrell, M. R., & Dittrich, J. E. (1978). Equity theory: The recent literature, methodological considerations, and new directions. The Academy of Management Review, 3 (2), 202-210.
• Martin, J. E., & Peterson, M. M. (1987). Two-tier wage structures: Implications for equity theory. Academy of Management, 30 (2), 297-315.
• Disley, P., Hatton, C., & Dagnan, D. (2009). Applying equity theory to staff working with individuals with intellectual disabilities. Journal of Intellectual & Developmental Disability, 34 (1), 55-66.

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Article • 3 min read

Adams’ Equity Theory

Balancing employee inputs and outputs.

By the Mind Tools Content Team

Adams' Equity Theory calls for a fair balance to be struck between an employee's "inputs" (hard work, skill level, acceptance, enthusiasm, and so on) and their "outputs" (salary, benefits, intangibles such as recognition, and more).

According to the theory, finding this fair balance helps to achieve a strong and productive relationship with the employee, with the overall result being contented, motivated employees.

Understanding Adams' Equity Theory

Adams' Equity Theory is named for John Stacey Adams, a workplace and behavioral psychologist, who developed his job motivation theory in 1963. [1] Much like many of the more prevalent theories of motivation (such as Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory ), Adams' Equity Theory acknowledges that subtle and variable factors affect an employee's perception of their relationship with their work and their employer.

The theory is built on the belief that employees become de-motivated, both in relation to their job and their employer, if they feel that their inputs are greater than the outputs they receive. Employees can be expected to respond to this in different ways, and may exhibit de-motivation, reduced effort, annoyance, or, in extreme cases, perhaps even disruption.

How to Apply the Adams' Equity Theory

Adams' Equity Theory can help you spot ways to improve an employee's job satisfaction and their level of motivation.

To do this, consider the balance or imbalance that currently exists between your employee's inputs and outputs, as follows:

Inputs typically include:

• Commitment.
• Adaptability.
• Flexibility.
• Acceptance of others.
• Determination.
• Enthusiasm.
• Trust in superiors.
• Support of colleagues.
• Personal sacrifice.

Outputs typically include:

• Financial rewards (such as salary, benefits, perks).
• Recognition.
• Reputation.
• Responsibility.
• Sense of achievement.
• Sense of advancement/growth.
• Job security.

While many of these points can't be quantified or perfectly compared, the theory argues that managers should aim for a fair balance between the inputs that an employee gives, and the outputs they receive.

And according to the theory, employees should be content where they perceive these to be in balance.

For a similar approach to supporting your people's success and sense of satisfaction, see Frederick Herzberg's Motivation/Hygiene Theory .

Much like the five levels of needs determined by Maslow, and the two factors of motivation classified by Herzberg (intrinsic and extrinsic), Adams' Equity Theory states that positive outcomes and high levels of motivation can be expected only when employees perceive their treatment to be fair.

This perception of fairness is based on a number of different inputs – what they put into their work – and outputs – what they get back as a result. Adams' Equity Theory is about striking a healthy balance between the two.

If the balance lies too far in favor of the employer, some employees may ask for more compensation or recognition. Others will be demotivated. Some may even decide to work elsewhere.

[1] Adams, J.S. (1963). 'Towards an Understanding of Inequity,' The Journal of Abnormal and Social Psychology , Volume 67, No. 5. (Available here .)

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Perceptions of Equity, Balance of Support Exchange, and Mother–Adult Child Relations

Jori sechrist.

Department of Sociology and Anthropology, University of Texas—Pan American, 1201 W. University Dr., Edinburg, TX 78539 ( ude.aptu@cjtsirhces ).

J. Jill Suitor

* Department of Sociology, Purdue University, 700 W. State St., West Lafayette, IN 47907.

Abigail R. Howard

Karl pillemer.

** Department of Human Development, Cornell University, 185 Martha Van Rensselaer Hall, Ithaca, NY 14850.

Equity theory suggests that relationships are more harmonious when both members of a dyad believe that their exchanges are fair. However, the level and frequency of exchange, rather than perceptions of equity, have been the focus of most research on support and the quality of intergenerational relations. Using data from 1,426 mother–child dyads nested within 413 families collected as part of the Within-Family Differences Study, the authors explored whether mothers’ perceptions of equity are better predictors of closeness and tension than are mothers’ reports of balanced exchanges of support. Mixed-model analyses revealed that mothers’ perceptions of equity were more consistent predictors of relationship quality than were the balanced exchanges of support, though the results varied somewhat by gender of adult child. These findings contribute to a growing body of research demonstrating that the psychological processes that shape intergenerational relationships mirror those of other ties.

Intergenerational exchange has been a central focus of research on parent–adult child relations for several decades, describing and explaining patterns of support and the role that such exchanges play in intergenerational relationship quality ( Davey & Eggebeen, 1998 ; Fingerman, Miller, Birditt, & Zarit, 2009 ; Kulis, 1992 ; Lowenstein, Katz, & Gur-Yaish, 2007 ; Sarkisian & Gerstel, 2004 ; Silverstein, Conroy, Wang, Giarrusso, & Bengtson, 2002 ). Although scholars have investigated the ways in which the balance of support between generations shapes parent– child relationship quality ( Ingersoll-Dayton & Antonucci, 1988 ; Kulis, 1992 ; Levitt, Guacci, & Weber, 1992 ; Rook, 1987 ; Schwarz, 2006 ; Schwarz, Trommsdorff, Albert, & Mayer, 2005 ; Thompson & Walker, 1984 ), far less attention has been given to the role of perceptions of equity in these processes. In the current article, we explore the relative effects of balanced exchanges of support and mothers’ perceptions of equity in predicting closeness and tension between mothers and their adult children, using data collected from 413 older mothers regarding each of their 1,426 offspring.

Equity, Exchange, and Intergenerational Relationships

Equity theory , an extension of classic exchange theory, proposes that individuals are the most satisfied with relationships in which they experience a relatively equal exchange of resources, rather than being greatly overbenefited or underbenefited in their exchanges ( Austin & Walster, 1974 ; Walster, Walster, & Berscheid, 1978 ). Equity theorists argue that this is because role partners in imbalanced relationships tend to feel anger and resentment when underbenefited and guilt when overbenefited ( Austin & Walster, 1974 ; Sprecher, 2001a ; Walster et al., 1978 ).

The salience of perceptions of equity has been documented empirically across a variety of relational contexts, including friendships, dating relationships, and spouses ( Cate, Lloyd, Henton, & Larson, 1982 ; Desmarais & Lerner, 1989 ; Michaels, Edwards, & Acock, 1984 ; Roberto & Scott, 1986a , 1986b ; Sprecher, 2001a , 2001b ; van Yperen & Buunk, 1990 ). One might assume that the strong effects of perceptions of equity on relationship quality reflect the actual pattern of exchanges; however, there is little empirical evidence to support or refute this assumption. Studies comparing the relative effects of patterns of exchanges and perceptions of equity have found that they are not equally strong predictors of relationship quality, suggesting that perceptions of equity are not driven entirely by patterns of exchange ( Sprecher, 2001b ; van Yperen & Buunk, 1990 ).

The largest body of evidence on the relative salience of perceptions of equity compared to reported behaviors in explaining interpersonal relations is found in the study of the division of household labor. This line of research has shown that when women perceive the division of household labor as inequitable, both their own marital quality and that of their husbands decreases, regardless of the actual pattern of contributions to household labor ( Frisco & Williams, 2003 ; Grote, Clark, & Moore, 2004 ; Kamo, 2000 ; Lavee & Katz, 2002 ; Suitor, 1991 ; Wilcox & Nock, 2006 ). These findings suggest that, at least for married partners, perceptions of equity and actual balance of exchanges differentially affect relationship quality.

Such a disparity in the effects of balanced exchanges versus perceptions of equity may be particularly likely when mothers assess their relationships with their adult children. The structure of the mother–child tie is inherently unbalanced for the first decades of the child’s life. In fact, not only do mothers provide extensive unreciprocated support to young children, but they continue to provide more support to children than they receive until the mothers reach their 70s ( Fingerman, Sechrist, & Birditt, 2012 ; Suitor, Sechrist, Gilligan, & Pillemer, 2011 ).Despite this imbalance, however, mothers typically report very high levels of satisfaction in their relationships with their adult children across the life course ( Suitor et al., 2011 ). Thus, it appears that mothers’ evaluation of their relationships with their offspring may not reflect the degree to which their exchanges of support are balanced. In contrast, studies that have taken into consideration mothers’ perceptions of relational equity have shown that this factor plays an important role in mothers’ satisfaction with their relationships with their offspring. Mothers who perceive that they give more than they receive from their relationships are more likely to express ambivalence toward those offspring ( Pillemer, Suitor, Mock, Sabir, Pardo, & Sechrist, 2007 ), and lower satisfaction with the relationship ( Vogl-Bauer, Kalbfleisch, & Beatty, 1999 ), and are more likely to become estranged from them ( Gilligan, Suitor, & Pillemer, 2010 ). This is in line with symbolic interactionist perspectives that have argued that individuals are directly influenced by the meaning or attributions they give to others and only indirectly influenced by the actual responses of others ( Kinch, 1963 ; Stryker, 1956 ; Thomas & Thomas, 1928 ). Furthermore, symbolic interactionists argue that subjective interpretation of responses from others and of one’s own behavior are present in all situations but are especially important in roles with greater ambiguity, such as the mother–adult child relationship, where there are fewer established expectations or rules for either party ( Birditt, Miller, Fingerman, & Lefkowitz, 2009 ; Chodorow, 1987 ; Clarke, Preston, Raksin, & Bengtson 1999 ; Fingerman, 1996 ).

Thus, it may be that perceived equity and balanced exchanges do not have the same impact on mother–adult child relations, mirroring the findings for marital partners. If, in fact, relationship quality is fueled primarily by perceptions of equity rather than the actual pattern of exchanges, this could help to account for the inconsistences in the literature regarding the effects of balanced and imbalanced exchange processes on parent–adult child relations. For example, some investigations have found that parents reported more positive relationships when they received more support than they gave to their children ( Levitt et al., 1992 ; Rook, 1987 ) and more negative relationships when they gave more than they received ( Ingersoll-Dayton & Antonucci, 1988 ), yet other studies have found that balanced exchanges are better predictors of parent–child relationship quality than are other patterns ( Kulis, 1992 ; Thompson & Walker, 1984 ). Furthermore, some investigations have reported that the salience of the balance of the exchange varies by whether the support was instrumental or expressive in nature ( Kulis, 1992 ; Rook, 1987 ). In fact, almost the only consistent pattern across the literature is that under most circumstances, exchange of support, regardless of the particular form, has positive effects relative to no exchanges ( Suitor et al., 2011 ).

We suggest that although these inconsistencies may be the result of differences in study design, it is also possible that they may be the consequence of the fact that patterns of support do not capture the most salient dimension of exchange for intergenerational relations: perceptions of equity. Thus, in the present article we address this question by making direct comparisons in the relative effects of patterns of exchange between parents and adult children and mothers’ perception of equity in the relationship. Specifically, we hypothesize that perceptions of equity will be a stronger predictor of both mother–child tension and closeness than will patterns of exchange.

Gender of Child as a Moderator

Although we believe that perceptions of equity will, overall, be a stronger predictor of mother– child relationship quality than will balanced exchanges, there is reason to suggest that this pattern may differ somewhat by child’s gender. In particular, differences in mothers’ relationships with daughters and sons are likely to lead mothers to expect greater equity in their relationships with their daughters, with less concern with the specific balance of exchanges of support. Mothers’ ties to their daughters tend to be stronger and are characterized by a more sustained history of support across the life course than are the bonds they share with their sons ( Suitor & Pillemer, 2006 ; Suitor, Gilligan, & Pillemer, 2013 ; Suitor et al., 2011 ). Furthermore, theories of gender socialization posit that mothers expect that their relationships with their daughters will be characterized by shared perspectives, including the salience of their dyadic relationship ( Chodorow, 1987 ). On these bases, we anticipated that relational equity would play a more important role in mother–child closeness and tension between mothers and daughters than between mothers and sons, whose relationships tend to be less close and reciprocal. Furthermore, because there is more attention to “accounting” in the balance of exchanges in ties with less closeness and a weaker history of reciprocation than in very close relationships with strong histories of reciprocal support ( Desmarais & Lerner, 1989 ; Roberto & Scott, 1986a ; Walster et al., 1978 ) we anticipated that balanced exchanges of support would be a stronger predictor of relationship quality for sons than daughters.

In sum, we anticipated that perceptions of equity would be stronger predictors of tension and closeness in mother–daughter dyads, whereas balanced exchanges of support would be stronger predictors of relationship quality in mother–son dyads.

Control Variables in the Analysis

We also take into consideration several mother and child characteristics that have been found to play important roles in the quality of relations between the generations. The mother-level characteristics included were number of living offspring, marital status, physical limitations, and race. There is some evidence that mother–child relations are closer in larger families ( Kaufman & Uhlenberg, 1998 ; Kulis, 1992 ; Rossi & Rossi, 1990 ). Studies have shown that married mothers have more positive relationships with their children than their unmarried counterparts ( Aquilino, 1999 ; Kaufman & Uhlenberg, 1998 ; Sarkisian & Gerstel, 2008 ; Umberson, 1992 ). Mother’s declining health has also been shown to decrease relationship quality ( Kaufman & Uhlenberg, 1998 ). Finally, studies have indicated closer relationships within racial/ethnic minority families ( Aquilino, 1997 ; Kaufman & Uhlenberg, 1998 ; Lawton, Silverstein, & Bengtson, 1994 ; Sarkisian & Gerstel, 2008 ).

The child characteristics we included were geographic proximity to mothers, marital status, parental status, age, educational attainment, and similarity of attitudes between mothers and their children. Living in closer proximity was associated with closer relationships in several studies ( Aquilino, 1997 , 1999 ; Kaufman & Uhlenberg, 1998 ; Sarkisian & Gerstel, 2008 ). There is some indication that closer proximity is also related to greater strain ( Umberson, 1992 ). Marital status has been found to play a role in relationship quality, with some studies having reported more positive relationships with married children compared to unmarried children ( Aquilino, 1997 , 1999 ; Kaufman & Uhlenberg, 1998 ; Sechrist, Suitor, Henderson, Cline, & Steinhour, 2007 ) and others having found married children are less likely to maintain high levels of closeness, relative to their unmarried counterparts ( Gilligan et al., 2010 ; Suitor et al., 2013 ). Some studies have indicated that having children is linked to lower closeness with parents ( Aquilino, 1997 ; Kaufman & Uhlenberg, 1998 ) and higher conflict ( Aquilino, 1999 ) in the parent–child relationship. In several studies, parents reported better relationship quality when children had higher levels of education ( Aquilino, 1997 , 1999 ; Hogan, Eggebeen, & Clogg, 1993 ). Finally, similarity has been shown to be one of the most consistent and strongest predictors of relationship quality in parent–child relationships ( Suitor et al., 2011 ).

The data for this study were collected as part of the Within-Family Differences Study (WFDS), which involved selecting a sample of mothers 65–75 years of age with at least two living adult children. (For a more detailed description of the WFDS design, see Gilligan, Suitor, Kim, & Pillemer, 2013 , and Suitor et al., 2013 , in which portions of this section have already been published.) In the original wave, data were collected from 566 mothers about their relationships with each of their living adult children; the original study was expanded to include data collection from 2008 to 2011.

Massachusetts city and town lists were used as the source of the original WFDS sample, from which women ages 65–75 were identified. With the assistance of the Center for Survey Research at the University of Massachusetts, Boston, the investigators drew a probability sample of women ages 65–75 with two or more children from the greater Boston area. The Time 1 (T1) sample consisted of 566 mothers, which represented 61% of those who were eligible for participation, a rate comparable to that of similar surveys in the past decade ( Wright & Marsden, 2010 ).

For the follow-up study, the survey team attempted to contact each mother who participated in the original study. At Time 2 (T2), 420 mothers were interviewed. Of the 146 mothers who participated at only T1, 78 had died between waves, 19 were too ill to be interviewed, 33 refused, and 16 could not be reached. Thus, the 420 represent 86% of mothers who were living at T2. Comparison of the T1 and T2 samples revealed that the respondents differed on subjective health, educational attainment, marital status, and race. Mothers who were not interviewed at T2 were less healthy, less educated, and less likely to have been married at T1; they were also more likely to be Black.

The 420 mothers interviewed at T2 had 1,577 adult children for whom they provided information; however, 29 mother–child dyads (1.8%) were omitted because the adult child died between T1 and T2. Two more dyads (< 1%) were omitted because the child was estranged from the mother and she did not provide information on aspects of those relationships. An additional 31 dyads (2.0%) were omitted because mothers did not provide complete information on the relationship quality, perceptions of equity, or support variables.

The variables of central interest in the present article were collected at T2; information on most of them was not available in the T1 data. Thus, in this article we use the T2 data, except in cases of demographic characteristics that were asked only at T1, which we note in our discussion of the measures. In this article we use data on 1,426 mother–child dyads nested within 413 families from the second wave of the WFDS for which there were data on all variables in the model. Data on the mothers’ and children’s demographic characteristics, as reported by mothers, for the analyses used in this article, are presented in Table 1 .

Sample Characteristics

Dependent Variables

To measure closeness with their adult children, mothers were asked the following three questions: (a) “What number would you use to describe the closeness in your relationship with (adult child’s name) nowadays?” (1 = very distant , 7 = very close ); (b) “How often does (adult child’s name) make you feel loved or cared for?” (1 = never , 5 = very often ); and (c) “For each of the following statements, tell me whether you strongly agree, agree, disagree, or strongly disagree: Being with (adult child’s name) makes you feel happy?” (1 = strongly disagree , 4 = strongly agree ). Consistent with other studies using similar measures ( Lawton et al., 1994 ; Ward, 2008 ; Ward, Spitze, & Deane, 2009 ), the distributions of the first two items were highly skewed; for this reason, item (a) was transformed into a 1-to-4 range by collapsing the bottom four categories, and item (b) was transformed into a 1-to-4 range by collapsing the bottom two categories, after which all three were combined to create a measure of relational closeness that ranged from 3 to 12 ( M = 10.21, SD = 1.95, α = .72).

To measure tension with their adult children, mothers were asked these three questions: (a) “What number would you use to describe the tension and strain in your relationship with [adult child’s name] nowadays?” (1 = not at all tense and strained , 7 = very tense and strained ); (b) “How often would you say the two of you typically have disagreements or conflicts?” (1 = never , 5 = very often ); and (c) “How often does [adult child’s name] make too many demands on you?” (1 = never , 5 = very often ). To be consistent with the closeness scale and to reduce skewness, item (a) was transformed into a 1-to-4 range by collapsing the top four categories and items (b) and (c) were transformed into a 1-to-4 range by collapsing the top two categories. Then they were combined to create a measure of tension that ranged from 3 to 12 ( M = 5.67, SD = 2.29, α = .69).

To retain as many dyads as possible, if only one item in the closeness or tension scale was missing for a particular dyad (.07% and .06%, respectively), the dyad’s mean score for the other two items in that scale was imputed for the missing item ( Downey & King, 1998 ; McDonald, Thurston, & Nelson, 2000 ; Roth, Switzer, & Switzer, 1999 ).

Independent Variables

Perceptions of equity.

To measure perceptions of equity regarding the relationship, mothers were asked, “All in all, do you feel that in your relationship with [adult child’s name], you give more than you receive, [adult child’s name] gives more, or is it about equal?” We created three dummy variables: (a) mother perceived she received more than she gave, (b) relationship was about equal, and (c) mother perceived she gave more than she received. Mothers reported that they perceived they gave more than they received from their adult child in 5% of dyads, equity in 82% of dyads, and received more than they gave in 13% of dyads.

Exchanges of expressive support

Mothers were asked about the support they gave to each child as well as the support they received from each child. The measures for expressive support were based on items that assessed two expressive tasks. For each of their children, mothers were asked to report whether, within the previous year, they had given either (a) comfort during a personal crisis or (b) advice on a decision the child had to make. If mothers answered yes to these items, they were asked how often: 1 = once or twice, 2 = 3–5 times, 3 = 6–10 times,; 4 = 11–20 times, and 5 = more than 20 times. The same procedures were used to ask mothers about the comfort and advice that they had received from each of their children. The frequency at which mothers gave and received each support type was skewed for all items. Therefore, we created items indicating the frequency at which mothers gave advice and comfort and the frequency at which mothers received advice and comfort, which we coded as 0 = no support, 1 = 1–5 times, and 2 = 6 or more times.

These four items were used to create the balance of exchange of expressive support. First we summed the scores for the two expressive items for support mothers provided to children (range: 0–4); we then summed the scores for the two items for support that mothers received from children (range: 0–4). We then calculated a difference score of expressive support given minus expressive support received (range: −4 to 4). Negative numbers reflect that mothers received more than they gave, and positive numbers reflect that mothers gave more than they received. In the difference-score measure, a zero can mean that mothers and children exchanged support at equal frequencies or that there was no exchange of support. Therefore, we created four dichotomous variables: (a) 1 = no expressive exchange, (b) 1 = mother received more expressive support than she gave, (c) 1 = balanced expressive exchange, and (d) 1 = mother gave more expressive support than she received. In regression analyses, we used balance expressive exchange as the comparison category. Mothers reported no expressive exchange in 16% of dyads, receiving more expressive support in 39% dyads, balanced expressive exchange in 21% dyads, and giving more expressive support in 23% dyads.

Exchanges of instrumental support

To measure instrumental support exchanged, mothers were asked whether they gave two forms: (a) help during an illness and (b) help with regular chores. As we did with expressive support, mothers were also asked the frequency at which they provided this support. The same procedures were used to ask mothers about the help during illness and regular chores that they had received from each of their children. Similar to the expressive support items, these items were also skewed; thus, we created items measuring the frequency at which mothers gave help when a child was ill and help with chores and the frequency at which mothers received help when she was ill and help with chores, coded as 0 = no support, 1 = 1–5 times, 2 = 6 or more times.

We followed the same process in creating the balance of instrumental exchange measures as we did for the balance of expressive exchange, which resulted in four dummy variables: (a) 1 = no instrumental exchange, (b) 1 = mother received more instrumental support than she gave, (c) 1 = balanced instrumental support, and (d) 1 = mother gave more instrumental support than she received. Balanced instrumental support was used as the comparison category in the regression analyses. Mothers reported no instrumental exchange in 37% of dyads, receiving more instrumental support in 46% dyads, balanced instrumental exchange in 7% dyads, and giving more instrumental support in 10% dyads.

We ran correlations among all of the independent dummy variables for equity, expressive, and instrumental exchanges. This analysis revealed that perceptions of equity in the relationship were not highly correlated with the balance of expressive or instrumental exchange. All correlation coefficients between perception-of-equity variables and balance-of-exchange variables were under ±.16.

Control Variables

Family size was measured by the number of living adult children at T2. Mothers’ marital status was coded as 1 = married and 0 = not married. Mothers’ physical limitations were assessed with the question “Do you have any health conditions or difficulties that limit your activities or things you can do?” This item was coded 1 = yes, has limitations or 0 = no, has no limitations. Proximity was measured as the distance the child lived from the mother in terms of travel time by ground transportation. Categories were 1 = same house, 2 = same neighborhood, 3 = less than 15 minutes away, 4 = 15–30 minutes away, 5 = 30–60 minutes away, 6 = 60–120 minutes away; and 7 = more than 2 hours away. Race was measured by asking the mothers to select from a card listing several races and ethnicities (e.g., White, Black or African American, Hispanic or Latina, Native American, Asian). They were instructed that they could choose more than one race or ethnicity. Because patterns of support in Hispanic families is more similar to those in Black families than to those in White families, race was coded 0 = White only and 1 = Non-White.

Adult children’s characteristics are based on mothers’ reports; and children’s gender and educational attainment were measured using T1 reports; whereas children’s age, marital status, parental status, and value similarity were measured at T2. Parental status was coded as 0 = no children and 1 = has children. Adult children’s marital status was coded as 1 = married and 0 = not married. Child’s age was measured in years. The child’s gender was coded as 0 = son and 1 = daughter. Mothers were asked which educational category was applicable to their adult children’s educational attainment : 1 = less than high school, 2 = high school graduate, 3 = some college, and 4 = college graduate.

Perceived value similarity was measured by the following item: “Parents and children are sometimes similar to each other in their views and opinions and sometimes different from each other. Would you say that you and [child’s name] share very similar views (4), similar views (3), different views (2), or very different views (1) in terms of general outlook on life?” Twenty-four percent of the children were described as holding very similar views to their mothers, 52.5% were described as holding similar views, 18.6% were described as holding different views from their mothers, and 4.8% were described as holding very different views.

Analytic Strategy

The 1,426 mother–adult child dyads are nested within the 413 mothers on whose reports the present analysis is based, thus the observations are not independent and the mothers’ reports will likely have correlated errors. Therefore, to examine the relative strength of association of equity and balance of exchange with relationship quality between mothers and adult children, we conducted clustered regression analyses using Stata SE software (version 12.1) using the xtreg command. Similar to hierarchical linear modeling procedures, the xtreg procedure accounts for the violation of the independence assumption and allows for correlated error structures. In all analyses, dummy variables for perceptions of equity and for balance of expressive and instrumental exchange were used; the comparison categories for each set of dummy variables are equity or balanced exchange. To examine the effects of perceptions of equity and balance of exchange by gender, we performed clustered analyses separately for daughters and sons. We used the following t test to test for significant differences in coefficients across the two models ( Paternoster, Brame, Mazerolle, & Piquero, 1998 ):

We used listwise deletion to handle missing data on the control variables because there were fewer than 6% missing (cf. Allison, 2010 ).

Main Effects Models

The findings for tension are presented in the left-hand columns of Table 2 . The analysis revealed that mothers who perceived that they gave more in their relationships with their children reported greater tension in their relationships than did mothers who perceived equity in their relationship ( B = 1.80, p < .01). In contrast, mothers’ perceptions that they received more than they gave did not predict tension.

Clustered Regression: Effects of Perceptions of Equity and Balance of Support On Relationship Quality In the Mother–Child Relationship (N = 1,426 in 413 Families)

We did not observe consistent patterns in the effect of support exchange on tension. Mothers’ reports of expressive exchange did not predict tension, regardless of the pattern of exchange. Contrary to the principles of equity theory, only receiving more instrumental support predicted tension, and that effect was in the opposite direction than was expected: Mothers reported less tension when they received more support, relative to having a balanced exchange. Mothers who reported no exchange also reported less tension than those who reported balanced exchanges.

Next, we conducted postestimation tests to determine whether the coefficients for perceived equity differed significantly from those for balanced exchanges. These tests revealed that the association between perceptions of equity and mother–child tension were significantly stronger than were those for balanced exchanges regarding instrumental support.

The findings for closeness are presented in the right-hand columns of Table 2 . These findings mirrored those for tension regarding the effects of perceptions of equity but differed regarding balanced exchanges. Mothers reported substantially lower closeness with adult children to whom they perceived they gave more than they received in the relationship ( B = −1.17, p < .01), relative to perceiving the relationship as equitable. Perceiving that they received more than they gave, relative to equity, did not predict closeness.

Although balanced exchanges of expressive support did not predict tension, they predicted closeness under one condition: Mothers reported less closeness when they had no exchange of expressive support ( B = −0.76, p < .01), relative to a balanced exchange. Exchanges of instrumental support also predicted closeness; however, contrary to the findings for tension, the patterns were in the expected direction. Mothers reported less closeness when they had no exchange of instrumental support ( B = −0.35, p < .01), relative to balanced exchanges. As was the case for expressive support, neither giving more nor receiving more instrumental support predicted closeness.

Finally, we conducted postestimation tests to determine whether the coefficients for perceived equity differed significantly from those for balanced exchanges. Consistent with the findings for tension, the results indicated that the association between perceptions of equity and mother–child closeness was significantly stronger than were those for instrumental and expressive exchanges in which mothers gave more than they received. Taken together, these findings demonstrate a strong and consistent pattern regarding the way in which perceptions of relational equity shape mothers’ reports of closeness and tension in their relationships with their adult children. Further, these effects were significantly stronger than those regarding patterns of balance in instrumental and expressive support.

Gender Differences

We conducted the analysis of both tension and closeness by child’s gender, as shown in Table 3 . Because the focus was on only the relative effects of perceptions of equity and balanced exchanges, we included only the coefficients for these variables in the table. Nevertheless, all of the controls included in Table 2 were also included in the models in Table 3 .

Clustered Regression: The Effects of Perceptions of Equity and Balance of Support On Relationship Quality In the Mother–Child Relationship By Child’s Gender (Ns = 738 Daughters, 688 Sons)

Note: Controls in the model include mothers’ physical limitations, race, marital status, and family size, as well as adult children’s age, marital status, educational attainment, parental status, geographic distance from mother, and mothers’ reports of value similarity to mother.

Findings for mother–child tension by child’s gender are presented in the left-hand columns of Table 3 . Consistent with the full model, mothers’ perceptions that they gave more in the relationship, relative to perceptions of relational equity, was a strong predictor of tension for both daughters and sons ( B = 2.03, p < .01, for daughters; B = 1.65, p < .01, for sons). The findings for balanced exchanges of expressive support were also similar for daughters and sons, with the exception of no exchanges, which was a predictor of less tension for daughters but not sons ( B = −0.60, p < .05, for daughters; B = −0.38, ns , for sons). Although using the t test to compare the coefficients for sons and daughters revealed a nonsignificant difference. For giving more or giving less than a balanced exchange, expressive support was not a predictor for either gender.

Nevertheless, the findings regarding instrumental exchanges of support differed considerably by child’s gender and departed markedly from what would be expected on the basis of equity theory. For daughters, the pattern of instrumental exchanges did not predict mother– child tension. In contrast, mothers reported less tension with sons when receiving more than they gave ( B = −1.03, p < .01), less than they gave ( B = −1.19, p < .01), and when no support was exchanged ( B = −1.45, p < .01), relative to balanced exchanges. Furthermore, the differences in the effect of instrumental exchanges by child’s gender were statistically significant. This is particularly striking when one considers that none of the differences between the coefficients for equity and patterns of expressive exchange were found to be statistically significant.

The findings for closeness by child’s gender are presented in the right-hand columns of Table 3 . As was the case for all of the analyses presented thus far, mothers’ perceptions of giving more than they received in the relationship with their offspring strongly predicted closeness. Specifically, for both sons and daughters, mothers reported lower closeness when they perceived that they gave more than they received in the relationship, relative to perceptions of equity ( B = −1.27, p < .01, for daughters; B = −1.15, p < .01, for sons).

Again, there were marked differences between the effects of support exchanges for sons and daughters. In particular, expressive support was a consistent predictor for mothers’ closeness with sons, but not daughters. Mothers reported less closeness with sons when the mothers gave more than they received ( B = −0.45, p < .05), gave less than they received ( B = −0.35, p < .05), and when they had no exchanges ( B = −1.16, p < .01), relative to equal exchanges of expressive support. In contrast, all of the coefficients for daughters were relatively weak and not significant. Furthermore, the difference between each of the coefficients for sons and daughters was statistically significant. In contrast to the findings for instrumental exchanges and tension, however, the direction of effects was as expected: Mothers had less close relationships with sons with whom they had imbalanced exchanges of expressive support. Finally, mothers’ closeness with children was not predicted by any patterns of instrumental exchanges, with one exception: For daughters, no exchange was associated with less closeness for daughters, but not for sons (difference between coefficients not significant).

Taken together, the analyses by gender revealed some similarities between daughters and sons as well as some differences. Most salient to the central research question we posed is that perceptions of relational equity predicted both tension and closeness regardless of child’s gender; however, the patterns of effects for support exchanges differed by gender. Specifically, unbalanced expressive exchanges were much stronger predictors of lower closeness for sons than daughters. In contrast, and most surprising, instrumental exchanges were more important predictors of tension with sons than daughters, but the effects were in the opposite direction than we hypothesized—mothers reported greater tension when their exchanges were balanced than under any other circumstances.

Taken together, classic theories of equity ( Thomas & Thomas, 1928 ; Walster et al., 1978 ) and symbolic interaction ( Kinch, 1963 ; Stryker, 1956 ; Thomas & Thomas, 1928 ) combine to posit that perceptions of equity play a greater role in explaining the quality of interpersonal relations than do the actual balance of exchanges between role partners. The findings presented here contribute to this line of scholarship by demonstrating the greater salience of perceptions of equity than balanced exchanges of support in explaining relations between older mothers and their adult children, thus paralleling other empirical studies of the relative importance of these two dimensions of exchange ( Frisco & Williams, 2003 ; Grote et al., 2004 ; Lavee & Katz, 2002 ; Suitor, 1991 ; Wilcox & Nock, 2006 ; Van Willigen & Drentea, 2001 ).

Although the balance of exchanges of support played only a small role in predicting relationship quality compared to perceptions of equity, the analyses revealed that relationships that lacked any exchanges of support had lower closeness, suggesting that the absence of these normative processes between the generations is detrimental to parent–child closeness—a pattern consistent with the literature on intergenerational relations ( Suitor et al., 2011 ; van Gaalen & Dykstra, 2006 ). However, contrary to expectations, the absence of instrumental exchanges was related to lower tension between mothers and their adult children. We suggest that this counterintuitive finding might be accounted for by the fact that dyads who exchange no support may be more emotionally and geographically distant with lower contact ( Suitor, Pillemer, & Sechrist, 2006 ; van Gaalen & Dykstra, 2006 ), in which case there is a lower likelihood of conflict and criticism ( Birditt et al., 2009 ; Fingerman, 1996 ; van Gaalen & Dykstra, 2006 ).

Counter to what would be expected both theories of equity and exchange, mothers who reported that they received more instrumental support than they gave their child reported lower tension. This finding is not surprising, however, given that the mothers were in their 70s and 80s—a point in the life course when the flow of support typically begins to shift toward more support to parents with less reciprocation ( Suitor et al., 2011 ). Furthermore, more than half of the mothers had experienced a major illness or injury for which they had needed assistance within 2 years prior to the T2 interviews, suggesting that their ability to reciprocate may have been reduced from earlier points. Thus, receiving instrumental support without the expectation of reciprocation may have been considered normative under the circumstances, whereas being expected to provide such support might have been difficult ( Davey & Eggebeen, 1998 ; Liang, Krause, & Bennett, 2001 ) and burdensome ( Talbott, 1990 ), thus creating tension in their relationships with their children.

The pattern of findings regarding children’s gender were consistent with classic theories of gender socialization and intergenerational relations ( Chodorow, 1987 ) regarding daughters, albeit less so regarding sons. In particular, for daughters, mothers’ perceptions that their relationships were equitable shaped both closeness and tension, whereas the specific balance of exchanges were of less consequence. Although we might have expected that the balance of expressive exchanges would predict daughters’ relationship quality more than sons’, it is possible that the stronger mother–daughter tie, with its expectation of support when necessary, result in less concern with the balance of ongoing day-to-day exchanges of either expressive or instrumental support. However, given the strong norms of supportive exchanges between mothers and daughters ( Rossi & Rossi, 1990 ), it is not surprising that having no exchanges were associated with lower tension but also lower closeness.

In contrast, the findings regarding sons did not adhere to our expectations. First, although we anticipated that perceptions of equity would predict relationship quality for both sons and daughters, we hypothesized that the association would be substantially weaker for sons; however, this was not the case. Second, imbalanced expressive exchange measures were associated with lower closeness, which would be expected. However, imbalances of instrumental exchanges were associated with lower tension between mothers and sons. It may be that relationships in which mothers and sons have balanced instrumental exchanges have a more intense bond and greater levels of contact and interdependence—much like those of daughters, thus providing more opportunities to experience tension in the relationship ( Birditt et al., 2009 ; van Gaalen & Dykstra, 2006 ).

We should note two important issues regarding measurement. First, it is important to point out that mothers tend to evaluate their relationships with their adult children as very positive. This was apparent in our data, where we saw overall high levels of relationship quality, particularly in terms of reported closeness. Therefore, we should interpret the nonsignificant findings with some caution because there may be a ceiling effect when it comes to the ability of our independent variables to predict closeness. Second, the measures of exchange in this study were self-reported behaviors and thus are perceptions themselves. Nevertheless, the low correlation of perceptions of equity and balance of exchange suggest that even when mothers report an imbalance in the support exchanges, they still perceive the relationship as equitable.

Limitations and Directions for Future Research

The present study points toward several directions for future research. First, because of the study’s cross-sectional design, the findings and their interpretations must be considered with some caution, because it could be that when mothers and adult children are closer and have less tension in their relationships mothers are more likely to perceive the relationship as equitable. Clearly, understanding how and why perceptions of equity affect relationship quality between mothers and their adult children is an area of research that needs further study using longitudinal data that are better able to answer the question of causal ordering. A longitudinal study would also allow a more dynamic picture regarding possible changes in the role equity plays in explaining intergenerational closeness and tension over the life course. It is clear that exchange relationships vary across the life course ( Antonucci & Akiyama, 1987 ) and that support is not always provided with the expectation of immediate reciprocity ( Antonucci, 1985 , 1990 ); therefore, perceptions of equity and the salience of equity may vary as well. We suggest that future studies address the importance of perceptions of equity for relationship quality at different stages in the life course.

Second, in this study we examined outcomes of closeness and conflict within the relationship separately, yet a growing body of literature points to the importance of considering ambivalence within the parent–child relationship ( Suitor, et al., 2011 ). There is evidence that perceptions of imbalance in the relationship predict greater ambivalence between mothers and children ( Pillemer et al., 2007 ); however, there have been no direct comparisons between the relative effects of perceptions of equity and reports of actual exchange with regard to ambivalence. Thus, future studies should examine the relative effects of perceptions of equity and balance of support on ambivalence in the parent–child relationship.

Furthermore, it is possible that the patterns we observed here regarding the association of relationship quality and perceptions of equity and balance of exchange might differ if considered from the adult child’s perspective ( Bengtson & Kuypers, 1971 ; Giarrusso, Feng, & Bengtson, 2004 ; Shapiro, 2004 ; Suitor, Sechrist, Steinhour, & Pillemer, 2006 ). Previous studies by Schwarz (2006 ; Schwarz et al., 2005 ) have examined the association of perceptions of equity and relationship quality in mother–daughter relationships from the perspective of the daughter. Consistent with findings presented here, these studies indicated that perceptions of equity were salient predictors of relationship quality; however, they did not compare the relative effects of perceptions of equity to reports of support exchanged. Thus, it is important to explore whether the patterns reported here can be replicated using reports from adult children, particularly in families in which reports from parents and children can be compared.

Finally, the findings we have presented focus on exchanges with only mothers. Given that differences continue to be found between mothers’ and fathers’ relationships with their adult children ( Gilligan et al., 2013 ; Pillemer, Munsch, Fuller-Rowell, Riffin, & Suitor, 2012 ; Suitor & Pillemer, 2013 ; Ward et al., 2009 ), it is possible that these processes would not be replicated when considering father–child relationships. Given that mothers expect higher levels of exchange and engage in more support exchanges with adult children than do fathers ( Rossi & Rossi, 1990 ), it is possible that exchanges of support may play a greater role in mothers’ relationship quality with adult children than fathers. Furthermore, because mothers place greater emphasis on expressive dimensions of their relationships with their adult children, whereas men place greater emphasis on instrumental dimensions ( Suitor & Pillemer, 2013 ; Pillemer et al., 2012 ), it is possible that perceptions of relational equity would play a smaller role in fathers’ than mothers’ relationships with their adult children. Thus, we hope that future research will explore whether the relative salience of perceived equity and balanced exchanges differ by parents’ gender.

The findings we have presented shed new light on the relative role of perceived equity and patterns of exchange in explaining relationship quality between mothers and their adult children. Consistent with classic theories of equity, in the present study we found that mothers’ perceptions were the most consistent predictor of mother–adult child relationship quality, whereas mothers’ reports of actual support exchanges played smaller roles in these processes. Thus, this set of findings contributes to a growing body of work demonstrating that relations between older parents and adult children are shaped by many of the same social psychological processes that influence other interpersonal relationships.

Acknowledgments

This project was supported by grants from the National Institute on Aging (RO1 AG18869-01, 2RO1 AG18869-04, J. Jill Suitor and Karl Pillemer, Co-Principal Investigators). Karl Pillemer also acknowledges support from an Edward R. Roybal Center grant from the National Institute on Aging (1 P50 AG11711-01). We thank Karen Fingerman, Jeni Loftus, Megan Gilligan, and Kaitlin Johnson for their helpful comments on earlier drafts of this article, and Paul Allison and Yoshinori Kamo for their suggestions regarding the methodology.

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Latest blog posts, why does equity theory matter at work.

Imagine if an employee discovered that their colleague with the same job description, working the same hours, and putting in the same amount of work earned 10% more. Would you expect them to start putting in less effort or looking for another job?

That’s what Adams’ Equity Theory tells us is likely to happen. Read on to discover the basic principles of equity theory, how to implement its lessons, and how HR and management can support the theory in practice.

• 1 What Is The Equity Theory Of Motivation?
• 2 What Are The Basic Principles Of Equity Theory?
• 3 Why Does Equity Theory Matter In The Workplace?
• 4 How Can Equity Theory Be Used At Work?
• 5 How Can HR Support Equity Theory?

What Is The Equity Theory Of Motivation?

Equity theory seeks to describe and understand why the beliefs of employees concerning what is right, fair, and just in the workplace matter for organizational performance. It was developed by John Stacey Adams in the 1960s. 

Essentially, Adams’ Equity Theory states that people are motivated to put in a fair amount of work based on two factors: 

Their pay (which must be equitable in the first place)

Their perception of how well they are paid compared with others

That’s the crucial part: Equity, in this case, is based on perception and not reality!

What Are The Basic Principles Of Equity Theory?

The basic principles of equity theory boil down to how employees compare themselves with others in terms of two things: input (effort) and outcomes (rewards). 

Adams’ theory is that people try to balance what they put into the working relationship (in terms of time, effort, and various other factors) with what they get out of it – both consciously and unconsciously.

Let’s break each down…

Inputs: Contributions & Efforts

Employees contribute to their employment by providing knowledge, skill, experience, and a certain amount of time, but that’s not all. Every employee also contributes intangible factors to the organization like loyalty, commitment, and dedication. 

Some employees may put more effort in, have a more or less positive attitude to work, and are more or less enthusiastic. In some cases, their contributions are self-determined: They’re just like that. But every employee can vary the level of input they choose to make. 

A lot of what determines how much effort they put in comes down to their perception of whether the organization recognizes their efforts and contributions – over and above their pay.

Outputs: Inducements & Rewards

Traditionally, both employees and organizations alike, have measured employee success, and rewarded employees by providing more money. That’s fair enough. Financial rewards including salary, benefits, and perks, massively influence how much effort an employee puts in.

But, as any great HR leader and almost all inspirational managers know: An employee gets more out of doing a job than just being paid a salary – at least, they should.

Employees also get job security, responsibility, stimulus, and acknowledgment of status from the job they do.

Other non-tangible rewards include: 

Recognition

A sense of achievement

A boost to their reputation

A sense of advancement or growth. 

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Why Does Equity Theory Matter In The Workplace?

It matters because equity theory illustrates the balance between how employees feel about their work, and how hard they should work as a result. 

In the workplace, the first place where can test this surrounds fair pay. 

Employers have a responsibility to pay employees fairly. It’s not just the right thing to do. In the UK, it’s mandated by law.

The Equality Act 2010 gives both women and men the right to equal pay for equal work. As the  CIPD  explains, both women and men are ”legally entitled to be paid at the same rate for like work, work rated as equivalent, and work of equal value.”

The second test is that employees must feel like the rewards they receive (relative to their contributions) are similar to those received by their peers.

The Link Between Equity Theory And Motivation

It’s important to keep employees motivated. This has long been documented, both in theory and in practice. But why is it important? And what does this have to do with Equity Theory?

In an HR context, the more we understand about what motivates employees, the more we can do to attract and retain great employees, making our workplaces productive places to be.

Fairness, or equity, and – more importantly – the perception of fairness – fundamentally impacts employee motivation.

John Crowley explains, “It’s important to note that this is nothing to do with whether you are or are not paying them fairly. It’s about whether or not they feel they are being paid fairly. It’s a matter of perception.”

What Happens When Equity Theory Goes Wrong?

When employees perceive that the balance between input and output (or between what they contribute, and the rewards they receive) is out of alignment, their behavior changes. 

According to the theory, when employees think their work situation is unfair, they (consciously or unconsciously) do what they can to return it to a state of fairness.

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How Can Equity Theory Be Used At Work?

HR has the opportunity to implement equity theory by ensuring equal pay for people doing the same job, operating at the same level in an organization, and, in circumstances where the business decides it’s appropriate, even publishing the salaries of their senior executives.

They can also ensure that employees are clear about what behaviors are expected for certain levels (and pay brackets), and what they need to do in order to exceed expectations.

It may also be important for your People Team to take note of employees who are behaving as if things are unfair. This may be because they perceive that their  psychological contract  has been violated.

Typical Behavior Of Underpaid Employees

Underpaid employees are not provided with extrinsic/external motivation in the form of money. Under normal circumstances, they may be okay with the status quo or, perhaps, even find intrinsic motivation to do their job well, or gain enjoyment from it. 

Here are some key ways to help boost employee motivation for HR teams.

However, when Adams’ Equity Theory is violated, bad things happen.

Employees who perceive they are underpaid may:

Feel de-motivated about their job or their employer

Go into survival mode (doing ‘just their job’, but nothing else)

Put less effort in during working hours

Work fewer hours (start later, end earlier, or take more frequent or longer breaks)

Behave negatively

Push for more money

‘Act out’ – for example, by being disruptive, causing trouble, or just generally making life more difficult for people around them

Become overly competitive

Typical Behavior Of Overpaid Employees

Employees who are overpaid may feel shame, guilt, or that they just ‘got lucky.’

Employees who perceive they are overpaid may:

Increase efforts beyond realistic expectations to justify their salaries (which might lead to working long hours, and result in exhaustion, or even burnout)

Unconsciously adjust their perspective on what’s fair, in a process known as cognitive distortion. 

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How Can HR Support Equity Theory?

HR has a responsibility to ensure that employees are reimbursed fairly. But it’s also important to create a sense of fairness within teams. Fairly-treated employees are more likely to be motivated, engaged, and perform well.

Here, transparency can also play a key role. When employees don’t know what’s happening, or why, they tend to draw their own (often incorrect) conclusions. Generally, the more informed people are, the better they will work. HR teams should aim to share as much as possible.

Finally, HR can support Equity Theory in practice by making sure the organizational culture is fair. Celebrate examples of fairness and tell stories explaining why fairness is important to your organization and what you do to promote it (or redress issues of unfairness).

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An experiential exercise for teaching theories of work motivation: using a game to teach equity and expectancy theories

Organization Management Journal

ISSN : 2753-8567

Article publication date: 1 July 2020

Issue publication date: 27 November 2020

This paper aims to provide an experiential exercise for management and leadership educators to use in the course of their teaching duties.

Design/methodology/approach

The approach of this classroom teaching method uses an experiential exercise to teach Adams’ equity theory and Vroom’s expectancy theory.

This experiential exercise has proven useful in teaching two major theories of motivation and is often cited as one of the more memorable classes students experience.

Originality/value

To the best of the authors’ knowledge, this is an original experiential exercise for teaching the equity and expectancy theories of motivation.

• Work motivation
• Equity theory
• Expectancy theory

Experiential exercise

Swain, J. , Kumlien, K. and Bond, A. (2020), "An experiential exercise for teaching theories of work motivation: using a game to teach equity and expectancy theories", Organization Management Journal , Vol. 17 No. 3, pp. 119-132. https://doi.org/10.1108/OMJ-06-2019-0742

Emerald Publishing Limited

Copyright © 2020, Jordon Swain, Kevin Kumlien and Andrew Bond.

Published in Organization Management Journal . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Theories of work motivation are central to the field of management and are covered in many introductory management, leadership, human resource management and organizational behavior courses ( Benson & Dresdow, 2019 ; Steers, Mowday, & Shapiro, 2004 ; Swain, Bogardus, & Lin, 2019 ). Understanding the concept of work motivation helps undergraduate students prepare for leading and managing others. Teaching these concepts in the classroom allows students to experiment and share ideas with others in a lower-stakes environment than if they were in an actual place of work with other employees. But teaching students theories of work motivation is not easy. First, there are dozens of theories ranging from Maslow’s hierarchy of needs, to self-determination theory, to goal setting theory, to Herzberg’s motivation-hygiene theory (a.k.a. two-factor theory), to job characteristics theory, just to name a few ( Anderson, 2007 ; Holbrook & Chappell, 2019 ; Latham & Pinder, 2005 ; Locke & Latham, 1990 ). Second, students tend to evaluate the explanatory power of different motivational theories based on how they relate to their work and life experiences ( Anderson, 2007 ). This tendency to view motivation theories through the lens of personal experience poses a challenge for undergraduate level students who have limited work exposure; they often lack the context to make sense of the various motivational theories ( Mills, 2017 ). Therefore, to provide a common experience through which students can understand theories of work motivation, we developed an experiential activity. Specifically, we use an in-class basketball exercise. This experiential approach not only provides a common context for students to reference in applying theories of work motivation, but also incorporates elements of fun and competition, which have been shown to help engage students more fully ( Helms & Haynes, 1990 ; Azriel, Erthal, & Starr, 2005 ).

While there are numerous theories of work motivation ( Latham & Pinder, 2005 ), like others, we have found focusing on too many of these theories during one class overwhelms students and causes them to question academics’ understanding of the topic ( Anderson, 2007 ; Holbrook & Chappell, 2019 ). However, focusing on too few theories also limits students’ education and understanding of why multiple theories of motivation exist. We find that acknowledging the existence of multiple theories is advisable, and we suggest instructors emphasize the complexity of motivation, but that they do not try to force students to learn or apply the details of a large number of theories of motivation in a single class period. Therefore, our exercise focuses on two basic theories of work motivation – Vroom’s Expectancy Theory and Adams’ Equity Theory. We chose to focus on these two theories because they are among the most influential theories of work motivation ( Anderson, 2007 ; Holbrook & Chappell, 2019 ; Miner, 2003 ) and among the most frequently included in management and organizational behavior courses and textbooks ( Miner, 2003 ; Miner, 2005 ).

Theoretical foundation

Both expectancy and equity theories of motivation have been identified as important frameworks for teaching and understanding motivation, and both emphasize the cognitive approach to motivation ( Miner, 2003 ; Stecher & Rosse, 2007 ).

Adams’ equity theory centers on the perception of fairness ( Adams, 1963 ). When people feel they have been fairly treated, they are more likely to be motivated. When they feel they have not been fairly treated, their motivation will suffer. These perceptions of equity are derived from an assessment of personal input and outputs – or what people put into a task compared to what they receive as a result ( Adams, 1963 ; Kanfer & Ryan, 2018 ). Inputs can include things like time, effort, loyalty, enthusiasm and personal sacrifice. Outputs can include but are not limited to, thing likes salary, praise, rewards, recognition, job security, etc. But the theory is more complex than simply the assessment of personal inputs weighed against outputs. Adams’ equity theory also incorporates the concept of perceived equity ( Adams, 1963 ; Kanfer & Ryan, 2018 ). People compare their inputs and outputs to others. If they feel that another person is putting in the same level of effort, but getting more outputs as a result, that person’s motivation may suffer ( Kanfer, 1990 ; Kanfer & Ryan, 2018 ; Stecher & Rosse, 2007 ). This theory can be summarized using a visual equation that highlights how perceived equity can impact motivation ( Appendix 1 ). This same visual equation can help students understand how leaders can influence motivation in their subordinates; how leaders can impact equity. For example, if inequity exists, leaders may require subordinates to reduce personal inputs, or they may adjust the outcomes. They might also counsel their subordinates to change their comparison points (e.g. a low-level worker should not compare herself to a senior VP with 12+ years of experience).

Expectancy : Is the individual properly trained and do they possess the necessary resources to effectively do the job?

Instrumentality : Does the individual trust that they’ll receive what they were promised if they do what they were asked?

Valence : Does the individual value the reward they were promised ( Kanfer & Ryan, 2018 )?

In this exercise, we use a mini basketball game in class to teach students about both Adams’ equity theory and Vroom’s expectancy theory. Using the game in class ensures students have a common context through which to apply and understand these two theories of work motivation. As noted by Stecher & Rosse (2007) , both theories offer compatible frameworks for understanding work motivation, yet they are most often taught as distinct non-related theories. We find that teaching these two theories using the same experiential exercise helps students understand the complexities of motivation. Specifically, this exercise helps students understand how multiple theories can explain motivation issues for the same situation.

Learning objectives

understand the complexity of motivation and its impact on performance;

explain differences in an individual’s motivation and behavior as a function of common psychological forces experienced by people; and

apply knowledge of work motivation theories to address issues of motivation.

Target audience.

This exercise is designed for undergraduate students in introductory courses in leadership, management, human resource management or organizational behavior – wherever theories of work motivation are covered. This approach has been used for over a decade teaching college juniors and seniors in a leadership course. While the approach has not been used to teach graduate students, there is no reason to believe it would not be an effective means for teaching those enrolled in an MBA program.

Class size.

The exercise has been used in classes ranging from 15 to 36 students. As participation by multiple students positively impacts the class, it is recommended the exercise be used for smaller classes. Time could become a factor in larger classes. Furthermore, space could prove a limiting factor in larger classes as some room is needed to set up the game.

Supplies needed.

mini basketball hoop and mini basketball (a trash can and wadded up paper can work if you do not have access to a small hoop and ball);

means for keeping time (stopwatch, wristwatch or wall clock with a second hand);

painter’s tape or note cards to annotate shot positions on the floor in the classroom;

one bag of miniature candy bars; and

slides of equity and expectancy theory to assist in de-brief ( Appendix 1 ).

This exercise as described can be completed in a single 75-min class session. If less time is available, we recommend instructors teach only one of the theories as outlined in this article (conduct only one of the two rounds of the game), covering the other theory during another class period.

a brief overview of work motivation by the instructor (via short lecture or through soliciting input from students to gauge the level of preparation) (10 min);

the first round of the game (10 min);

de-brief and application of equity theory (10 min);

the second round of the game (10 min);

de-brief and application of expectancy theory (10 min);

small group discussion on the future application of theories (15 min); and

structured de-brief of group discussions (10 min).

Student preparation before class.

It is recommended that instructors assign students readings focused on work motivation in advance of the class. A large number of organizational behavior or management textbooks contain chapters on this topic. At a minimum, the assigned reading should cover equity and expectancy theories.

Instructor preparation and classroom setup.

Instructors should set up the classroom with supplies they obtained before beginning class. A visual example of the classroom setup for Rounds 1 and 2 of the exercise can be found in Appendix 2 . The mini-basketball hoop should be located in front of the classroom where all the students can see it. Depending on the size/shape of the classroom, the shooting positions for Rounds 1 and 2 of the exercise can be placed in any location. The shooting position for Round 1 should be a moderately difficult shot, perhaps two to three steps away from the basket. Mark the position with tape or a notecard.

Round 2 requires three different shooting positions. Each position should be marked with tape or a notecard. The first position is the “easy” shot. It should be very close to the basket (1-2 steps in front of the basket). The purpose of this first position is to create the opportunity for a shot that the average person would have lots of confidence in making (high expectancy). The second position should be further away (six to eight steps away from the basket) and potentially behind a row of desks for some added difficulty. The purpose of this second position is to create a shot of medium level difficulty where students are not completely confident (lower expectancy) that they will be able to make it. The third position should be the hardest shot that you can create while still leaving a very small possibility of the shot being made (lowest expectancy). It is recommended you make the student stand outside of a doorway so that they have to shoot a strange trajectory. If your classroom space is not big enough to support making a shot position that is far away from the basket, you can instead add difficulty by requiring the student to wear a blindfold or to shoot backwards. For the positions needed for Round 2 of the exercise, instructors should test the positions and ensure the three different locations are of varying difficulty and that the third position is an extremely difficult (almost impossible) shot to make.

Running the exercise

Introduction to motivational theories (10 min).

Given the number of motivational theories that exist in the academic world, we find it helpful to acknowledge this initially with students to highlight the overall complexity of the topic. In this introduction, instructors can briefly highlight the variety of motivational theories that exist (e.g. expectancy, equity, Maslow’s hierarchy of needs, self-determination theory, goal setting theory, Herzberg’s motivation-hygiene theory, job characteristics theory, etc.). This can be done in any number of ways – asking students to list and/or briefly describe the various theories covered in their assigned reading, etc. Teachers should tailor this introduction based on their specific situation (e.g. the content of assigned reading, length of class, etc.). After talking through the variety of theories that exist, it is important to highlight to students that these theories should be viewed more as a conceptual toolbox for them to use in different situations as opposed to viewing all of these theories as a group of non-congruent viewpoints all competing to be the truest ( Anderson, 2007 ).

After a brief review of the assigned reading(s), instructors can tell students that they are going to play a game to apply what they have learned.

Round 1 of the game (10 min)

Ask all of the students to stand up and tell them to stretch out, limber up, and get prepared for a mini-basketball competition. During this session, the instructor will provide students with an exciting and competitive experience to which they can apply the concepts of Adams’ Equity Theory.

Divide students into four even teams. Have students move around and sit with their team as a group. Explain that Team 1 will compete against Team 2 in a basketball shootout. Establish an incentive of your choice – candy often works well. Show this incentive to the students. Now call Team 1 and Team 2 up to the front of the class and instruct them that:

[…] you can take as many shots as you want at the hoop in 60 seconds, but everybody in your team needs to shoot at least once. The team that ends up with the most baskets made will win. Team 1, you will go first.

Use a stopwatch or watch with a second hand to keep time and instruct members of the opposing team to keep score.

Once Team 1 completes their turn, record their score and call Team 2 forward. Before allowing Team 2 to start their turn, move the shooting spot three paces further away from the basket (move the tape or notecard back three paces).

You will likely experience negative feedback from Team 2 after moving the basket. Common responses include, “this isn’t fair.” Pay close attention to the complaints that they use, these are often very useful to bring up during the discussion portion of the exercise. You might respond lightheartedly with “life isn’t fair” or “what, are you scared?” Allow Team 2 to complete their turn, paying close attention to their affect and comments. If done correctly, Team 2 should lose to Team 1. Congratulate Team 1 on their excellent performance and give each member of Team 1 their prize (a small candy bar works well) and have both Teams 1 and 2 return to their seats.

Now call Team 3 forward. Instruct them that will have 60 s to shoot from the same spot that Team 2 shot from. Keep time and have a member from Team 4 count the baskets. When time is up, record the score. Now call Team 4 forward. Have them shoot from the same spot Team 3 did. Start the clock. However, do not stop the team from shooting after 60 s. Let them continue to shoot for an additional 30 s – or longer – until you hear the members of Teams 1, 2 and 3 start questioning how much time Team 4 is getting to shoot. Record the number of shots made. Team 4 should beat Team 3. Congratulate team 4. Do NOT give Team 4 any candy for winning. Have Teams 3 and 4 return to their seats.

Round 1 de-brief and application of equity theory (10 min)

This is where the instructor begins to apply Adams’ equity theory to the scenario. Ask students if anyone is feeling unsatisfied or unmotivated. You should have several hands go up. If not, remind them of the negative comments you heard during the game – calling on students by name if necessary. Now start to inquire as to why people said what they did.

At this point, the instructor should put up the slide with Adams’ equity theory on it ( Appendix 1 ) and ask students to explain what happened using the equation on the slide. The class should point out several areas where “the equation does not balance.” For example, the inputs for Team 1 were less than the input for Team 2. Team 2 had a harder shot and, therefore, had to provide more inputs (work harder). Students should also point out that the outputs were not even. Team 4 beat Team 3 (just as Team 1 beat Team 2), but Team 4 did not receive the same outcome/reward. Less clear is the factor of Team 4 having more time than Team 3. Ask students how this factor impacts motivation using equity theory.

Pass out candy to all members of the class – to reduce feelings of inequity. Keep three pieces of candy for Round 2.

Round 2 of the game (10 min)

Now tell the class that you are going to ask for three volunteers. Inform the class that if they volunteer and are selected, they have a choice to make – they must choose one of three shooting/prize positions.

Shooting Position #1. Tell the students that if they choose shooting position #1, they get to shoot from the closest spot (and show them where it is). Let them know that they can take three practice shots and that for making a basket, they will receive a piece of candy.

Shooting Position #2. Tell students if they choose this option, they get to shoot from the spot of moderate difficulty and show them where it is. Let them know they get one practice shot and that their prize for making the basket is something of medium desirability – perhaps lunch paid for by the instructor at a local moderately priced restaurant of the student’s choice.

Shooting Position #3. Tell students that if they choose this option, they get to shoot from the most difficult spot and show them where it is. Tell them that they do not get any practice shots from this location. Promise an extremely desirable reward (high valence) and also something that the students may question whether you have the power to give it to them (low instrumentality). A great example is offering them the ability to get out of having to do a major course requirement such as a capstone project or thesis paper. You could also offer something like getting to park in the Dean’s parking spot for the rest of the semester. The creativity behind choosing this third reward is that you want to find the balance of a reward that is extremely high in desirability, but also something that in hindsight students should realize was probably outside of your ability to deliver on that reward (low instrumentality). By creating a reward that is somewhat unrealistic for shooting position #3, the instructor will allow for a follow-on discussion about the power of instrumentality in Vroom’s expectancy theory. If a student questions whether or not they will receive the reward by meeting the performance outcome (making the shot), then their instrumentality will be lower which may alter the position they select to shoot from.

Now that all three shooting positions have been described, pick three volunteers at random and have them come to the front of the room. Ask the first student what option she would like to choose and have her take the shot. Repeat for the second and third students (students can all shoot from the same spot if they desire). After the final volunteer chooses the shooting position and takes the shot, have students return to their seats and prepare for the de-brief.

Round 2 de-brief and application of expectancy theory (10 min).

After the volunteers have returned to their seats, the instructor can display the Vroom’s expectancy theory slide ( Appendix 1 ) to begin shaping the class conversation in terms of Vroom’s expectancy theory.

Individual behavior = the physical act of shooting the basketball;

Performance outcome = making the basketball in the hoop; and

Reward outcome = the prize received based on making the shot from the shooting position the student chose.

Next, ask the students to break down each of the three options in terms of expectancy, instrumentality and valence . The following should come out in the discussion:

Expectancy – Shooting position #1 has the highest expectancy of all three positions. Self-efficacy is increased through multiple practice shots and the close distance makes the shot seem achievable.

Instrumentality – Shooting position #1 should have a high level of instrumentality. Students know you have the candy bar and that you delivered on what you promised during round 1. Therefore, it is likely they trust and believe they will receive the reward candy bar for achieving the performance outcome of making the shot.

Valence – Shooting position #1 likely has the lowest valence of all three positions in terms of overall value. However, valence could run from low to high depending on individual preference. The candy bar may have lower valence if students do not like the particular candy bar.

Expectancy – Lower than shooting position #1 because the shot is more difficult, and the student only gets one practice shot. However, the expectancy of shooting position #2 is still greater than shooting position #3 because the shot is easier and the student still receives a practice shot which raises the student’s confidence in their ability to achieve the performance outcome of making the shot.

Instrumentality – Lower than shooting position #1, but higher than shooting position #3. There might be some trust issues related to whether the students will receive the lunch. As the student does not immediately get the reward of the free lunch by achieving the performance outcome of making the shot, the instrumentality may be low. The instrumentality should still be higher than shooting position #3 because the student should have more trust that the instructor will buy them lunch as compared to not having to write the final paper for the class.

Valence – Should be higher than position 1 since lunch is more expensive than just a candy bar. However, individual preferences again may vary depending on if the students have free time in their schedule or if they would even like to have lunch with their professor.

Expectancy – The lowest of all three positions as there is no practice shot and the difficulty of the shot is so high that students do not really believe that they will be able to make the shot.

Instrumentality – Should be the lowest of all three positions as the reward may seem so great that some students will doubt if the instructor will follow through on giving the reward, or if they even have the power to give out the reward. But this may not be rated by students as low initially.

Valence – The highest of all three positions. The reward of not having to write a final paper, or some other exclusive reward (parking in the Dean’s parking spot) should be viewed as extremely appealing to most students given the high value they place on their time in a busy college schedule.

After going through each of the shooting positions, have the non-participating students in the classroom evaluate the multiplicative factors for each shooting position and ask them if it makes sense why each student chose to shoot from where they did.

Small group discussion on the future application of theories (15 min)

After students have had a chance to run through both games as well as the de-brief for each exercise, it is now time to turn the discussion toward an application of both theories to future leadership situations. Break students back out into the teams they were on for the Adams’ equity theory portion of the class. Instruct the groups they will have 15 min to talk amongst themselves to brainstorm examples of personal experiences or potential future scenarios where they can apply Adams’ equity theory and Vroom’s expectancy theory. Examples that often come up range from peers on group projects receiving the same reward/recognition even though they contributed less, gender discrepancies in pay or promotion, poor incentive systems, etc.

Structured de-brief of group discussion (10 min)

Spend the last 10 min of this class asking each group of the teams to share an example they discussed within their small group. Ensure that you press the students to use the correct terminology when talking about their examples through the lens of either Adams’ equity theory or Vroom’s expectancy theory and ask them how they might positively impact motivation in the scenario they discussed.

Potential challenges.

Challenge : The instructor does not properly manage time for a thorough debrief of each exercise

09:30-09:40. A brief overview of work motivation theories;

09:40-09:50. The first round of the game (Adams’ equity theory);

09:50-10:00. De-brief round one exercise and apply Adams’ equity theory;

10:00-10:10. The second round of the game (Vroom’s expectancy theory);

10:10-10:20. De-brief round two exercise and apply Vroom-s expectancy theory;

10:20-10:35. Small group discussion on the future application of theories; and

10:35-10:45. Structured de-brief of group discussions.

Challenge: A student manages to make the impossible shot

Solution: In the event that a student does make the nearly impossible shot from shooting position #3 (this did happen in one instance and it turned into a viral Instagram video with over 20,000 views) then the instructor needs to be prepared to not follow through on the reward. Instead, the instructor should discuss the concept of instrumentality and how the trust between a leader and their direct reports is essential to ensuring positive motivation in the workplace. This is why it is important that the reward for shooting position #3 is somewhat unbelievable in the first place because it will allow for a great discussion on instrumentality and the belief that achieving a performance outcome will lead to a given reward. The instructor can begin by polling the students to see how many of them completely believed that the reward for shooting position #3 was realistic and attainable. Through this discussion, the instructor can highlight what happens to motivation when managers create extremely difficult goals (low expectancy) with extremely valuable rewards (high valence) to try and motivate their workers. This also provides a strong example to the students of what happens to trust when a leader fails to follow through on a promised reward and how that will impact instrumentality and thus motivation in the future.

Challenge: Students may not have real-life examples to discuss in their groups.

Solution. If group discussion is lagging, the teacher can suggest situations that students may have experienced or direct them to use the internet to find examples and to discuss those instances.

This experiential exercise has proven useful over the past 10 years in providing an introductory look at the complexity of workplace theories of motivation. In semester-end student feedback, this class has been mentioned numerous times as one of the most impactful lessons of the course. Multiple students have commented on the effectiveness of the hands-on exercise in creating a memorable point of reference that makes it easier to retain class learning concepts. In fact, the most recent end of course feedback over one-third of students cited this lesson as the most memorable of the 30-lesson course. Additionally, the in-class exercise provides a common context for students with varying experiences to engage with and allows for the introduction and application of two of the major theories of motivation. Furthermore, the fun, competitive format generates interest and excitement. Note, we have also used miniature golf instead of basketball to teach each theory – having students putt with different equipment, from different distances, and for different prizes. For a brief overview on the setup using mini-golf, please see Appendix 3 . We encourage faculty to have fun with the exercise – it is not just for the students!

Adams’ equity theory

Vroom’s expectancy theory

Setup for Round #1 – Adams’ equity theory

Setup for Round #2 – Vroom’s expectancy theory

Setup for Vroom’s expectancy theory using mini-golf

Appendix 1. Sample slides for use in de-briefing

Appendix 2. sample classroom setups for rounds 1 and 2, appendix 3. instructions for use of mini-golf instead of basketball.

If the classroom does not allow for the setup of the three different shooting positions for the basketball exercise, then it is easy to replace the basketball exercise with a mini-golf option. Below is a brief highlight of the differences in classroom setup for the golf exercise.

putter, golf ball and plastic solo cup;

painter’s tape or note cards to annotate shot positions on the floor in the classroom; and

bag of miniature candy bars.

Round 1 Exercise (Adams’ equity theory)

There are no major changes needed for this round. Simply follow the same instructions for Round 1 of the basketball exercise, except instead of basketball shots replace that with made putts into the solo cup. This will still allow for the same comparison and perceived inequities amongst the four teams that will create a rich discussion on Adams’ equity theory.

Round 2 Exercise (Vroom’s expectancy theory)

Again, there are no major changes needed for this round, other than just replacing the concept of a made basketball shot with a made putt. Below is an example of the three putting positions and how you can still create a similar scenario to the basketball exercise in terms of expectancy , instrumentality and valence for each putting position.

Putting Position #1: Create a short two-foot putt that is fairly easy to make. Allow the student to have three practice putts. This creates an option with high expectancy (an easy putt with practice shots), high instrumentality (the student believes that if they make the putt, they will receive the candy) and low valence (candy is not as valuable as lunch or getting out of writing a final paper).

Putting Position #2: Create a six-foot putt that is not straight on but instead is at a slight angle to the cup so that it is more difficult to make. Allow the student to have only one practice putt. This creates an option with a medium level of expectancy (a slightly more difficult putt), a medium level of instrumentality (the student has to trust that you will actually buy them lunch at some point in the future) and a medium level of valence (the lunch is greater than the candy bar, but most likely not as valuable as not writing the final paper).

Putting Position #3: Create the longest most difficult putt that your classroom will allow. Additionally, tell the students they will receive no practice putts and they will have to putt with the handle end of the putter. This creates an option with a very low level of expectancy (students will have a very low level of belief that they can make the putt given both the distance and the fact that they have to putt with the handle), a low level of instrumentality (again the reward should be so valuable that some students will doubt the reality of actually receiving the reward) and a very high level of valence (the reward should be extremely desirable).

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Equity theory

What symptom(s) In this case suggest that something has gone wrong? A men’ retail clothing store In Quebec called Veterans Late which Introduced new Incentive systems, which are salary with commission based on several performance measurements.

The goal of the new Incentive systems are that encouraging either store managers or employees to serve customers better in order to improve sales volume.

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Actually, this new incentive systems are not very efficient due to the allowing two problems: one is sales staffs are over “ownership”, this aggressive behavior will intimidated customers and the lack of inventory duties in result of stock shortage. Even managers reacted the problems that caused by the new incentive systems, then the managers assigned employees to inventory duty and specific areas, threaded stuff with dismissals. Somewhat these were effective, but staffs continued to complain a lot because of inequity between their contributions and payments to coworkers. 2.

What are the main causes of these symptoms?

In terms of Equity Theory, the employees of Veterans Late who hold their own beliefs about their inputs and outcomes, then compared themselves to reference other (the other coworkers in this company) and they found their input/outcome ratio is lower than some other coworkers. The perception would motivated employees to complain about their work, lower their inputs (for example, time and effort), or require higher a salary. So, the perception of inequity motivate the employees’ behavior to restore equity. 3. What action should Veterans executive take to correct these problems?

The Veterans executive can do these kinds of things to correct these problems.

Firstly, they can modify the new Incentive systems, the scale standard should measure whole team during a period Instead of a specific person, for example, If the sales volume Improve a lot In past period, the reward can distribute averagely for every employee. Secondly, the executive should emphasize team split In employees’ training, and give the employees feedback periodically.

A men’ retail clothing store in Quebec called Veterans Late which introduced new incentive systems, which are salary with commission based on several performance measurements. The goal of the new incentive systems are that encouraging either they can modify the new incentive systems, the scale standard should measure whole team during a period instead of a specific person, for example, if the sales volume improve a lot in past period, the reward can distribute averagely for every employee. Secondly, the executive should emphasize team spirit in employees’

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