The paper ' Inequity in Social Exchange' is a great example of a Management Essay. The aim of equity theory tries to expound on relational satisfaction basing on fair/unfair distributions of resources within interpersonal relationships. Equity theory is traced back to John Stacey Adams in 1962. Adams based theory on his experience in the workplace and behavioral psychology (Adams 1965). Moreover, Adam asserted that employees tend to balance between the inputs that they accomplish a task and the resultant outcomes, this, the employees weigh them against the inputs and output of other employees.
Many people value fair treatment, which forms the foundation of motivation. The motivated worker tends to ensure fairness within the relationship of the organization and co-workers. Thus, the way that employees work in the workplace is based on the balance that is created by the ratio of inputs and outputs. In this case, the inputs are the contributions that the employees bring into an organization, which range from job experience to interpersonal behavior. Thus, the aim of this paper is to examine the equity theory for its effective application. Equity theory is one of the justice theories that require that everybody should be treated equally.
Thus, the theory postulates that a person who perceives that they are over-rewarded or under-rewarded will likely to experience distress. The distress will be the foundation of trying to restore equity within the relationship or within persons in the organization. Thus, it tries to determine whether the distribution of resources between employees in an organization is fair. Measuring equity is through comparing the rations of employees’ contributions to the organization and the benefits that the employees achieve.
In fact, Guerrero et al (2007) view that equity theory acknowledges the variable individual factors usually affects individual perception and assessment of their individual relationship with the relationship of their respective partners. Spector (2008) shares the same sentiments with Adams (1965) by stating that guilt is caused by overpayment equity while underpayment inequity is causes anger. In most organizations, the salary usually is the cause of disagreement since it brings into consideration inequity and equity. This is because individual employees feel that the payment is reflected in their contributions and the quality of work that they accomplish. For example, an employee who is underpaid may feel hostile towards other employees and the entire organization.
This may result in the employee not performing as required. In fact, minimal and good variables make a person appreciate equity. When an employee is recognized by the organization or the management through acts such as thanking the employee will make the employee feel satisfied and thus will become a component to improve on the outputs (Cropanzano 2001). An employee will feel that he is treated fairly when he compares the ration of inputs to outputs that are the same as other employees around him.
Hence, it is acceptable that a senior employee gets a higher salary since the value of the input is higher compared to other less senior employees. Most employees usually base their experience with those of other employees within the organization to ascertain whether they are satisfied. Thus, for example, when an employee notices that another employee is getting better compensation in the tasks that the employee has completed and both employees had completed the same task may be a factor that brings into consideration dissatisfaction (Adams 1965).
Hence, dissatisfaction may make the employee feel that he is worthless or not an important factor in the organization. This aspect is against the ideologies of the equity theory because equity theory states that the inputs should equal the outcomes. Hence, if the two employees were equally rewarded, other employees will realize that the organization is appreciative, observant, and fair.
Adams, J. 1965. Inequity in Social Exchange. Advances in experimental Social Psychology, 62: 335-343
Borkowski, N. 2005. Organizational Behaviour in Health Care. New York: Jones & Bartlett Publishers.
Chan, K., Godby, R., Mestelma, S. & Muller, R. 1997. Equity Theory and the Voluntary Provision of Public Goods. Journal of Economic Behaviour & Organisation, 32(3): 349-364
Cropanzano, R. 2001. Justice in the Workplace: from Theory to Practice. New York: Lawrence Erlbaum Associates.
Carrell, M. & Dittrich, E. 1978. Equity Theory: The Recent Literature, Methodological Considerations, and New Directions. The Academy of Management Review, 3(2): 202-210
Culyer, A. 2001. Equity – Some Theory and Its Policy Implications, Journal of Medical Ethics, 27: 275 – 283.
Deutsch, M. 1975. Equity, Equality, and Need: What Determines which Value Will be Used as the Basis of Distributive Justice? Journal of Social Issues, 31: 137 - 149
Fallon, F. & Zgodzinski, E. 2004. Essentials of Public Health Management. New York: Jones & Bartlett Publishers.
Greenberg, J. & Baron, R. 1993. Behaviour in Organisations: Understanding and Managing the Human Side of Work, 4th Ed. New York: Allyn and Bacon Publishers.
Guerrero, A. & Afifi, C. 2007. Close Encounters: Communication in Relationships, 2nd Ed. New York: Sage Publications.
Spector, P. 2008. Industrial and Organisational Behaviour, 5th Ed. New Jersey: Wiley Publishers.
Walster, E., Traupmann, J. & Walster, G. 1978. Equity and Extramarital Sexuality. Achieves of Sexual Behaviour, 7 (2): 127 – 142