In today’s contemporary organizations, it is generally agreed that the main key to employees work motivation or effects on work performance is linked to whether they consider that they are sufficiently rewarded for the jobs they do for an organization. Top management is consistently trying to ensure that they are able to monitor and balance their employees’ inputs into the company and the outputs they offer to their workers. This thought of actions is referred to as the Adams’ Equity Theory. The theory has been argued by Miner to help top managers understand their employees’ motivation and how they reward their efforts accordingly without misbalance in-between.
Adams’ Equity Theory explains that there should be a rational balance between employees contribution within the organization in terms of work performance, their level of skills, passion to succeed, creativeness, and good team spirit among others and what managers gives in return in terms of remuneration, status, allowances, benefit pecks within and outside the company, and opportunity for and recognition of achievements among others. Most employees tend to compare their outcomes to their inputs while making reference to people in a similar job role, colleagues in the workplace, or even to close competitors’ employees.
Bray et al enlightened that inequity is observed by a worker whenever he/she is convinced that the there is an in balance (unequal) between his/her input and output compare to others. This perception could have numerous effects such as reduce of input level on job performance, as well as uneasiness that could build up to a state where they have to look elsewhere for that equity. According to Adams, there are two main types of inequity, which are underpayment and overpayment. Underpayment inequity is when employees feel that the output they get for their performance is less compare to their input. While on the other hand, the overpayment inequity is when workers feel that they are been excessively compensated for their level of input.
Nevertheless, managers of organizations that have been able to find the balance between the inputs and outcomes of their workers, have further enjoy the benefits of strong and fruitful relationship with their employees. These are in terms of having motivated workers, achieving of organizational goals and objectives, and a healthy working environment. Furthermore, the application of this theory enables managers to build a better relationship with their staffs. Bizshifts research group pointed out that where the ratio of input and output is balance, managers are able to increase motivation and productivity within the workplace. However, an employee that is of the view that he/she is been rewarded fairly who later finds out that he/she is actually the lowest paid, this awareness will surely lead to demotivation.
Overall, it is of one view that Solalina management teams should not only understand this Adams’ Equity Theory but also ensure to apply it within their different subsidiaries. Whereby all employees are rightfully rewarded based on their inputs to enable their motivation to be high, promote job satisfaction, and boost a positive relationship between the management and employees. This will further reduce workers demotivation and fewer turnovers. Solalina management is encouraged to find the fair balance of worker inputs to the outputs they receive and likewise, employees are to be contended when they perceive this balance is fair.
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