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Equity Theory and Employee Perception

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Equity Theory is a concept developed by the Behavioral Scientist John Stacy Adams in 1963.His theory indicates that people will judge and analyze both the rewards and the outputs of effort to determine whether not they are being treated fairly within the workplace (Adams, 1965). These inputs and expenditures are subjective by nature as they are based upon the perceived rewards and efforts of others. When information is accurate employees are better able to accurately gauge the equity relationships with employers and produce more meaningful results. An example can help in solidifying this concept. Let us say for a moment that John and Sally work for the same company. John works very hard each and every day but doesn’t seem to be getting anywhere at work. When he looks at Sally he believes that she works less but has received two raises within the past few years. He also notices that Sally is very friendly with her bosses and he interprets such actions rightly or wrongly as flirtati