Equity theory

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Equity theory


Acronym

N/A

Alternate name(s)

N/A

Main dependent construct(s)/factor(s)

An Individual’s distress

Main independent construct(s)/factor(s)

An individual’s perception of their input into a relationship. An individual’s perception of their output from a relationship. An individual’s perception of the input of the other participant in the relationship. An individual’s perception of the output of the other participant in the relationship.

Concise description of theory

Equity Theory focuses upon a person’s perceptions of fairness with respect to a relationship. During a social exchange, an individual assesses the ratio of what is output from the relationship to what is input in the relationship, and also the ratio of what the other person in the relationship outputs from the relationship to what is input into the relationship.

Equity Theory posits that if the person perceives that there is inequality, where either their output/input ratio is less than or greater than what they perceive as the output/input ratio of the other person in the relationship, then the person is likely to be distressed.

For example, consider two situations in which change is presented to two employees. If an employee was given a salary increase and a peer was seen as being given a larger increase in salary for the same amount of work, the first employee would evaluate this change, perceive an inequality, and be distressed. However, if the situation was such that the first employee perceived the other employee being given a larger increase in salary as well as being given more responsibility and therefore relatively more work, then the first employee may evaluate the change, conclude that there was no loss in equality status, and not resist the change.

This theory may be used for both explanation and prediction.

Diagram/schematic of theory

Equity1.JPG

[formula from Glass and Wood (1996) following Humans]

Equity2.JPG

[Equity sensitivity continuum from Huseman, Hatfield, and Miles (1987: p. 224) and attributed as an adaptation from Adams. Note: P = person and O = Comparison other.

Originating author(s)

J. Stacy Adams

Seminal articles

Adams, J.S. (1963) “Towards An Understanding of Inequality.” Journal of Abnormal and Normal Social Psychology. (67), pp. 422-436.

Adams, J.S. (1965) “Inequality in Social Exchange” in Advances in Experimental Psychology, L. Berkowitz (ed.), Academic Press, New York, NY. pp. 267-299.

Homans, G.C. (1961) Social Behavior: Its Elementary Forms. Harcourt, New York.

Walster, E. E. Berscheid and G. W. Walster. (1973). “New Directions in Equity Research.” Journal of Personality and Social Psychology. pp. 151-176.

Huseman, R., Hatfield, J., and Miles, E. “A New Perspective on Equity Theory: The Equity Sensitivity Construct. Academy of Management Review. 1987. 12(2). pp. 232-234.

Originating area

Social Sciences

Level of analysis

Individual

IS articles that use the theory

Joshi, K. (1989). The Measurement of Fairness or Equity Perceptions of Management Information Systems Users. MIS Quarterly. 13(3), pp. 229-242.

Joshi, K. (1990). “An Investigation of Equity as a Determinant of User Information Satisfaction.” Decision Sciences. 21, pp. 786-807.

Glass, R. and Wood, W. (1996) Situational determinants of software piracy: An equity theory perspective. Journal of Business Ethics. 15(11), pp. 1189-1198.

Links from this theory to other theories

N/A

External links

“Equity Theory” on the WikEd site: http://wik.ed.uiuc.edu/index.php/Equity_Theory

“Primer on Equity” by Dr. Richard W. Scholl: http://www.uri.edu/research/lrc/scholl/Notes/Equity.html

“Equity Theory” on the changingminds.org site: http://changingminds.org/explanations/theories/equity_theory.htm

Original Contributor(s)

Lars P. Linden

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