Organizational Justice: Equity Theory

Posted: October 17th, 2013

Organizational Justice: Equity Theory

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Abstract

The aim of this paper is to discuss the equity theory in organizations and employ organizational justice. Included is the relevance of the equity theory, strengths, weaknesses and the current trends concerning equity theory employed in organizations. The companies employing the use of equity theory are mostly the incorporated companies. We see they improve their productivity by implementing equity theory. Equity theory enables employees to compare their input-output ratio and that of their colleagues. It shows that employees are motivated by the existence of inequity.

Organizational Justice: Equity Theory

            Organizational justice is the determination of whether the decision-making procedures are followed or not and if they are correct and moral. It also refers to the supervisors respecting the employees, avoiding bias, being fair to all and considerate. The organizational justice is developed from the equity theory. It takes in to consideration the input-output ratio of an employee and evaluates that difference with that of a colleague. If the evaluation makes an employee believe that his or her condition is inequitable, the employee will be provoked to minimize the inequity by reducing effort or increasing productivity (Young, 1994).

Equity theory proves that individuals are motivated by the awareness of inequity (Adam 1965). This theory affirms that women and men are on a social comparison. Adam Smith’s traditional theory presumes reactions to inequity to be self-motivated. Therefore, it creates a need to minimize the misery caused by the inequity. In this case, when an individual observes inequality because his inputs are more than his outputs or vice versa, one may expect misery to follow. In 1960s, Organizational justice was done to test plans about allocation of payment and rewards to employees. From then, fairness concerns have existed in such organizations as conflict resolutions (Messick & Cook, 1983).

Equity theory does not focus on the input-output ratio only but the comparison of one employee’s ratio with that of another. Therefore, this shows why employees are affected by this situation and that of his colleagues. Every employee establishes their own opinion of equity in their work place. This comparison of the input output ratio gives a great appreciation of motivation. For example, this theory makes us understand why an employee can be motivated by his situation today but then if the working conditions are not improved it can result to his demotivation. This is happens mostly when they know of a colleague who is enjoying a great reward when he did not put in much effort. This theory also makes it clear why offering an employee a promotion or pay rise may demotivate his colleagues (Young, 1994).

The equity theory has its strengths. It is efficient, useful and applicable. This theory is supported by many researches in the past years. It also correctly predicts the employee behaviors. When employees are underpaid, they tend to be demotivated. Thirdly, this theory makes sense practically. We can see that most employees compare their inputs to outputs and to that of their colleagues. Lastly, this theory is able to fit with other theories like the expectancy theory. Example, the equity theory can be used by the employees to find out if inequity exists then use the expectancy theory to act on the existing inequity.

This theory has some major weaknesses too. It fails to provide details in some factors such that it provides a number of strategies for maintaining equity but does not state in detail the choice an individual will select. In addition, since most of the research was short term, there are no long-term knowledge reactions to inequity. The Adam’s theory lacks scientific explanation for lack of equity within cultures. Lastly, the human perception can be mistaken. When this occurs, outcomes are resulted to errors and so are inputs (Messick & Cook, 1983).

Most incorporated companies employ the use of equity theory. Supervisors and managers use the equity theory to predict employee behaviors and influence their behaviors. These companies use the equity theory to determine what employees think to be fair. This enables them improve their working conditions increasing employee motivation and finally productivity. It is achieved by conducting surveys to collect data about employees’ perception. These companies then use the data collected to make procedures and rules that will improve the perception of equity in the workplace.

References

Messick, D. M., & Cook, K. S. (1983). Equity theory: Psychological and sociological perspectives. New York, N.Y: Praeger.

Young, H. P. (1994). Equity: In theory and practice. Princeton, N.J: Princeton University Press.