Equity theory is a conceptualization that focuses on the causes and consequences of people’s perceptions of equity and inequity in their relationships with others. First proposed by J. Stacy Adams in 1963 and fully developed in a chapter published 2 years later, equity theory draws on earlier social psychological concepts inspired by Fritz Heider’s balance theory (e.g., relative deprivation, cognitive dissonance, and distributive justice). Although equity theory was developed as an approach to explaining the dynamics of social exchange relationships in general, it has been in the work context that the theory’s value was most strongly established.

Components of Equity Theory

According to equity theory, people make comparisons between themselves and certain referent others with respect to two key factors—inputs and outcomes.

  • Inputs consist of those things a ...
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