Equity theory is a concept belonging to John S. Adams, a behavioural psychologist.The theory helps explain why your employees’ motivation levels can go up and down at work. The rationale for developing SET further was that many couples stay together despite the costs outweighing the rewards, so there must be some other factors that keep them together. Equity theory attempts to explain relational satisfaction in terms of perceived fairness: that is, people evaluate the extent to which there is a fair or unfair distribution of resources within their interpersonal relationships. (1964). A strength of Equity Theory is that it is supported by research findings. 1. Equity theory focuses on determining whether the distribution of resources is fair to both relational partners. Home Browse. Equity Theory can be broken down into four basic propositions (Huseman, Hatfield, & Miles, 1987). In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation fair in their eyes. fairness. As we’ve talked about many times here at BrightHR, your business needs motivated staff to operate at its full capacity. For example, Stafford and Canary (2006) have discovered that partners who perceived their relationships as fair and balanced experienced most satisfaction, thus supporting Equity Theory’s suggestion that perceived fairness is necessary for happy relationships. (2001), as a development of Social Exchange Theory. In business psychology, equity theory comes under the umbrella of organisational justice, which is concerned with employee perceptions of a company's internal and external behaviour and how these perceptions fuel or change their own attitudes and behaviour. Equity is measured by comparing the ratio of contributions (or costs) and benefits (or rewards) for each person. Equity Theory states that humans have a natural tendency to maintain equity in their social relationships. Equity is a sense of fairness in the exchange of goods, services, time, and effort. The Investment Model was put forward by Rusbult et al. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Individuals develop their perception of fairness by calculating a ratio of their inputs and outcomes and then comparing this to the ratio of others (Huseman, et. Create. Start studying Unit 13 AP Psychology. https://economictimes.indiatimes.com/definition/equity-theory Equity Theory is based on the idea that individuals are motivated by fairness. ... the theory that we explain someone's behavior by crediting either the situation or the person's disposition. Vroom, V.H. Rusbult's Investment Model investigates what these other factors might be. If you're interested in equity theory, you may want to read the following: al., 1987). Regarded as one of many theories of justice, equity theory was first developed in 1963 by John Stacey Adams. ... equity. An individual-differences interpretation of the conflicting predictions generated by equity theory and expectancy theory. Journal of Applied Psychology, 66(4), 470-481.