|J. Stancy Adams propounded the Equity Theory of Motivation in 1963. It is based on the cognitive motivation theory. According to this theory, people want to be treated fairly in relation to other for motivation. Input and outcome ratio will help the individual to have an idea of being in a situation of equity or inequality. Inputs are the individual's efforts, responsibility and other factors that they put into the job, whereas outcomes are the promotion, pay raise, recognition of the work done in exchange for the inputs. Thus, the equity theory states that an individual compares his input/ outcomes to that of the other working in the same position in the organization or in other organizations and tries to establish equity. In the process of comparison, if the individual perceives any sort of inequity he or she will change his or her behavior at work.|
- It cannot clearly provide the ideas, how to change the input and outcome of individual.
- The equity between the people is almost impossible as it depends upon the personal perception of employees.
- The input cannot be changed easily and the change in outcome can also become conflicting.
- The equity theory can be useful only for the company having very small number of employee.