Equity theory is a theory of employee motivation, developed by J. Stacy Adams in the 1960s, that holds employees assess fairness in the workplace by comparing the ratio of their own inputs, such as effort, skill, and time, to their own outcomes, such as pay and recognition, against the equivalent ratio for a comparison other, often a coworker in a similar role. According to the theory, employees who perceive their ratio as unfairly low relative to others experience distress and are motivated to restore equity, whether by reducing their own effort, seeking greater rewards, or changing their point of comparison. Equity theory remains widely taught in organizational behavior as one of the process theories of motivation, contrasted with content theories such as Maslow's or Herzberg's.
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