Adams’ Equity theory (1965): Adams’ theory states that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs (Adams, 1965). Implication for management: It is important to consider the Adams’ Equity Theory factors when striving to improve an employee’s job satisfaction, motivation level, etc. , and what can be done to promote higher levels of each.
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Positive outcomes and high levels of motivation can be expected only when employees perceive their treatment to be fair to strike a healthy balance, with outputs on one side of the scale; inputs on the other – both weighing in a way that seems reasonably equal. Criticism on Adams’ Equity Theory: If the balance lies too far in favor of the managers, some employees may work to bring balance between inputs and outputs on their own, by asking for more compensation or recognition. Others will be demotivated, and still others will seek alternative employment7.
Conclusion: The effectiveness of Knowledge Based Organization is dependent upon the motivation of its employees (Chesney, 1992; Buford, 1990; Smith, 1990). Knowing what motivates employees and incorporating this knowledge into the reward system will help identify, recruit, employ, train, and retain a productive workforce. Motivating employees requires both managers and employees working together (Buford, 1993). Employees must be willing to let managers know what motivates them, and managers must be willing to design reward systems that motivate employees. If properly designed reward systems are not implemented, however, employees will not be motivated.
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Learning and instruction. Upper Saddle River, NJ: Merril Prentice Hall. Skinner, B. F. (1969). Contingencies of Reinforcement: A Theoretical Analysis. Englewood Cliffs, NJ: Prentice-Hall. Nash S. S (June 13, 2005), “Business Booming, But Morale Couldn’t Be Worse? Vroom’s Expectancy Theory and Psychological Climate Provide Explanations”, 6(3), pages 446-450, Journal of applied psychology. 1 Those present world organizations that have skilled workers with proper training and education: http://en.wikipedia.org/wiki/Process_theory