Using equity theory and Justice Theory as a framework, explain how a person can experience inequity because he or she is paid too much.What are the potential outcomes of this situation?
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Equity Theory proposes that a person's ...
motivation is based on what he or she considers to be fair when compared to others (Redmond, 2010). When applied to the workplace, Equity Theory focuses on an employee's work-compensation relationship or "exchange relationship" as well as that employee's attempt to minimize any sense of unfairness that might result. Equity Theory deals with social relationships and fairness/unfairness, it is also known as The Social Comparisons Theory or Inequity Theory (Gogia, 2010).
Equity Theory of motivation, developed in the early 1960’s by J. Stacey Adams, recognized that motivation can be affected through an individual's perception of fair treatment in social exchanges. When compared to other people, individuals want to be compensated fairly for their contributions (the outcomes they experience match their input(s)). A person's beliefs in regards to what is fair and what is unfair can affect their motivation, attitudes, and behaviors. Equity Theory helps explain how highly paid union workers can go on strike when no one else seems to understand why. In the same way, well paid athletes feel they are not fairly compensated compared to their peers. Equity Theory shows that one's perception is relative to their own reality.