Understanding the Equity Theory: A Comprehensive Guide

Understanding and addressing equity concerns is vital for fostering healthy and thriving relationships. Interestingly, in the context of social media, and referring to the extant and existing traditional tools of communication and brands as adapted in this study, it has been concluded that more consumer satisfaction is derived from a favorable brand image (Arghashi et al., 2021). In the current paper, we exposed what we considered major flaws in the theory, which are mainly conceptual shortcomings and a need for stricter operationalization. Because a better understanding of the methodological flaws is important to future theoretical progress, we suggested some ways to address these shortcomings. Our essential take home message is, first, to focus on an operational distinction for the triptych elements of CDT, that is the inconsistency, the dissonance state (CDS) and the regulation strategies.

What Are the Key Concepts of Equity Theory?

Despite its status as the old lady of the discipline, CDT should be questioned as thoroughly as a young theory. Participants were given a booklet containing three versions of the story of A and B who are business partners, a story quite similar to the one used in study 1. The three versions of the story (variations involved the existence of a bonus or not, the amount of work, the level of pay) reflected the utility structure of three types of games, very common in game theory research literature – chicken, prisoner’s dilemma, assurance (Poundstone, 1992). The prisoner’s dilemma concerns two prisoners offered a Faustian bargain by the police to testify against each other and go free. Game theory predicts that rational pursuit of self-interest would result in both prisoners backstabbing each other (i.e., “defecting” instead of “cooperating”). Chicken, otherwise known as hawk-dove, is modeled after the teenage game of highway chicken where two drivers set their vehicles on collision course and the first one who swerves, loses.

The Role of Equity Theory in the Workplace

Dissonance can arise from many sources, including, but not limited to, logical inconsistency, cultural differences, contradictions between specific opinions and their related general stand, and a disconfirmation of a past experience to a current situation (Westmeyer, 2012). The is a case when a pair of cognitive elements does not imply anything concerning one another. Once again, it can be challenging to deduce such a relationship because two elements may be indirectly linked. Therefore, researchers have to consider or make a reference to other cognitions before deriving a conclusion (Festinger, 1962). In our opinion, we consider that more standardization could permit to examine such specific hypotheses and to investigate more precisely the effects. To achieve this goal, and reduce variation between studies, the standardization of the induction would also require moving away from tasks grounded in social background, temporal, or cultural references.

Understanding the Equity Theory: A Comprehensive Guide

First, the relations of people are built on an equity norm (i.e. the expectation that their contributions will be rewarded) (Adams, 1963). In the group context, equitable relations between members of the group are expected to benefit other members. Hence, members of the group will reward fellow members, who treat others equitably and punish those who treat others inequitably (Walster, Berscheid & Walster, 1973). Although the original works on equity did not explore individual differences in the evaluation of equity, it was pointed out that the perception of what equitable relations are varies for different people (Walster, Berscheid & Walster, 1973; Lund, Scheer & Kozlenkova, 2013). High self-esteem individuals are more likely to advocate for equity and fairness, while low self-esteem individuals may tolerate inequities or even accept unequal treatment. Understanding the interplay between self-esteem and equity perceptions is crucial for managers and organizations seeking to create an inclusive and equitable work environment.

• It implies sharply defining these features (e.g., valence, aversivity, intensity, action tendency).
• Last, in addition to reviewing these limits, we suggest new ways to improve the methodology and we conclude on the importance for the field of psychology to take advantage of these important challenges to go forwards.
• Because a better understanding of the methodological flaws is important to future theoretical progress, we suggested some ways to address these shortcomings.
• Indeed, cognitions consistent with the behavior (presumed the most resistant) are supposed to decrease the magnitude of the CDS, while inconsistent ones are supposed to increase it.
• As revealed by the responses of the customers in a study by Mahmood and Bashir (2020), brand reputation has a significant impact on brand equity in the fast food industry.
• Let’s create environments where equity is not just a theory, but a living, breathing aspect of your day-to-day work life.

For instance, the anterior cingulate cortex is consistently activated in CDT paradigms, but also in MMM paradigms (see Proulx et al., 2012) and in mortality salience paradigms (Quirin et al., 2012). Last, suggestions about the induction procedure, such as the use of implicit inconsistency exposure (Levy et al., 2017), also permit merging several procedures which are widespread in close fields (e.g., Stroop task) but that were unusual cognitive dissonance addiction for CDT. Equity Theory in Psychology is a concept that explains how people perceive and respond to fairness in social relationships. It suggests that individuals strive to maintain a balance between what they input into a relationship and what they receive in return. Equity theory, introduced by psychologist John Stacey Adams, suggests that individuals compare their efforts and rewards to those of others in similar positions.

• Aronson’s Revision of the idea of dissonance as an inconsistency between a person’s self-concept and a cognition about their behavior makes it seem likely that dissonance is really nothing more than guilt.
• In addition to investing effort in systematic and standard operationalization of these concepts, the examination of the whole model could deeply improve the theory and the understanding of human psychology.
• Indeed, at our knowledge, the existing studies examining the CDS are subject to the same methodological issues we raised previously, and the field lacks a reliable instrument to assess the CDS.
• Corporate social responsibility (CSR) has become a necessity in an emerging business trend of applications and use as demanded (Botero Pérez & Franco Acosta, 2016).
• Japanese workers perceive overpayment to be unfair, in contrast to Chinese and South Korean employees, which can be explained by the stronger materialism ideology embedded in the social system of the latter two countries (Kim, Edwards & Shapiro, 2015).

Job Satisfaction

Specifically, there is evidence that procedural and distributive justice in web purchasing induces a positive emotional state and leads to future purchase intention (Oliver, Shor & Tidd, 2004). Another body of research explored psychological responses to the unethical use of Information systems, manifested as the denial of responsibility for the misuse of technology (Harrington, 1996) or the consequences of the unethical use of technology (Cooper & Blumenfeld, 2012; Allison & Bussey, 2017). Cognitive dissonance, a psychological concept coined by Leon Festinger, plays a significant role in understanding the underlying mechanisms of Equity Theory.

• When we delve into the application of equity theory within the realm of friendships, we unravel a complex web of give-and-take dynamics.
• Rooted in decades of academic research, this theory explains how employees weigh their contributions against the rewards they receive, and how these perceptions influence their overall job satisfaction and productivity.
• Such situations do not take into consideration psychological unlimited rewards, which cannot be measured and divided (Romer, 1979).
• Likewise, other authors have described the CDS as a state of tension (Croyle and Cooper, 1983; Kruglanski and Shteynberg, 2012), an unpleasant feeling (Harmon-Jones, 2000), or a state of aversive arousal (Proulx et al., 2012).

Inconsistency: Operationalization of Both Manipulation and Measure

Also, the principles of Equity Theory were applied to predict socio-economic events (Kim, Evans & Moser, 2005; Ocampo & Vallejo, 2012). For example, scholars found a correlation between perceived inequity in a tax payment system (i.e. high tax rates) and taxpayers’ decisions to report a lower amount of income (Kim, Evans & Moser, 2005). In addition, the insight into the economic dynamics of developing countries demonstrated that despite the increase in public-sector social spending, the unequal distribution of socio-economic benefits among the society significantly impedes countries’ economic development (Ocampo & Vallejo, 2012). While Equity Theory provides valuable insights into human behavior, it does have its fair share of criticisms and limitations. The perception of fairness and equity can vary across cultures and societies, making it challenging to generalize the theory’s findings universally.

Equity and Justice in Social Behavior

Individuals either refer to a specified referent person or a generalised other to draw the comparison. The specified person can even be oneself, which means that the person refers to their own experience in the past in terms of the rewards received for their contributions. Generalised comparison assumes comparing one’s input/output ratio against the commonly accepted standards or predefined social norms (Greenberg, 1987). In addition, specified or generalised others can be external (from different social groups) or internal (people within the same social group) (Scholl, Cooper & McKenna, 1987). The example of generalised internal standards is when employees use referent bonus targets set by the company to evaluate the fairness of bonus payments (Voußem, Kramer & Schäffer, 2016).

Extract: From previous study, 2023

One limitation of Equity Theory is that it is based on the assumption that individuals are rational and self-interested, which may not always be the case. Additionally, the theory does not consider factors such as cultural differences and individual differences in perceptions of fairness. Inputs refer to the contributions a person makes to a relationship, outputs refer to the rewards received, and comparison to others refers to how individuals evaluate their contributions and rewards in comparison to others. When considering organizational psychology in the context of equity theory, it becomes evident that it may not fully capture the multifaceted dynamics of workplace interactions. The application of simplistic organizational principles to complex human relationships can lead to flawed conclusions. Studies have shown that families who strive for equity in their relationships tend to have higher levels of cohesion, trust, and satisfaction.