Equity

Aaron Halliday

      Equity theory was developed by John Stacey Adams (1963, 1965). Individuals feel that they are rewarded fairly and are satisfied based on similar tasks completed by others.

       

      Adams’s model contains three crucial components:

      • inputs (the effort an individual makes);
      • outputs (intrinsic and extrinsic rewards from the organization);
      • comparison with others Brooks, I. p.97 (2009).

       

      Brooks, I. (2009). Organisational behaviour Individuals, Groups and Oganisation. 4th ed. Essex, England: Pearson Education Limited
      Below chart extracted from http://www.businessballs.com/adamsequitytheory.htm

       

      inputs equity

      dependent on comparing own ratio of input/output with ratios of ‘referent’ others

      		 outputs
      Inputs are typically: effort, loyalty, hard work, commitment, skill, ability, adaptability, flexibility, tolerance, determination, heart and soul, enthusiasm, trust in our boss and superiors, support of colleagues and subordinates, personal sacrifice, etc. People need to feel that there is a fair balance between inputs and outputs. Crucially fairness is measured by comparing one’s own balance or ratio between inputs and outputs, with the ratio enjoyed or endured by relevant (‘referent’) others. Outputs are typically all financial rewards – pay, salary, expenses, perks, benefits, pension arrangements, bonus and commission – plus intangibles – recognition, reputation, praise and thanks, interest, responsibility, stimulus, travel, training, development, sense of achievement and advancement, promotion, etc.

      Aaron Halliday

      Aaron has a passion for understanding people and helping them reach their maximum potential. He works as a consultant and executive and life coach and is the founder of Prometheus Works Inc. His work has contributed to the advancement of Fortune 500 businesses in a diverse array of sectors ranging from building materials to financial services and pharmaceuticals. His work has impacted domains of talent, leadership, strategy, culture, organizational wellness and operational effectiveness. He has conducted studies on resilience, mindfulness, trauma and overcoming adversity in and out of the workplace as well as how to effectively use use various bio data indicators and a wide range of personality traits and characteristics to predict work-related outcomes such as innovative tendency, job satisfaction, job dedication, organizational citizenship, organizational support, counterproductive work behaviors, burnout, and turnover intentions. His background in applying science and the scientific method in business contexts combined with experience applying evidence-based insights to achieve targeted objectives has honed his skills in collecting data fast, deriving insights quickly, and using these evidence-based insights to propose, develop, and implement tools and solutions useful for a wide range of business purposes including HR/People Operations, Business Development, Learning and Development, Change Management, and more.