What is Equity Motivation Theory
Theoretical approach developed in social psychology and also used in marketing, e.g. to explain negotiations or processes in vertical marketing, according to which people in social exchange situations, according to the principle of equity, give preference to transactions in which they have an equivalent in the short or long term Can expect consideration for their own performance.
(Equity theory): The theory developed by the American social psychologist J. S. Adams that people in social exchange situations generally prefer those transactions in which they get the equivalent of what they bring in on the principle of equity.
With regard to economic transactions, this is an approach that is far removed from any traditional view of economic behavior. The theory also assumes that low-income owners, for example, are not dissatisfied with their situation simply because their needs are all the more urgent. Rather, the feeling of subjectively perceived injustice (inequity) only arises when a person has the feeling that the results of a transaction are not those brought about by them
Performance. The dissonances between the interaction partners triggered by such unbalanced interactions trigger reduction activities.
The basic idea of the equity theory is that a person aims to receive a “return” for an “effort” they have made, which they perceive to be just (fair, equal) in a social comparison. So it's about two things:
· When a person makes a bet, they hope that it will generate income for them - in the sense of a barter transaction.
In doing so, the person expects that they will perform fairly well in comparison with others, i.e. that they will receive the same return for the same effort.
The term “commitment” (input, effort) includes every characteristic of the person that he / she considers relevant in the exchange relationship. These can not only be “expenses” in the usual sense, such as work input, time, but also characteristics such as beauty, age and the like.
“Income” (outcome) includes everything that the person perceives as relevant consideration in the exchange, such as money and advancement, but also recognition, criticism and the like.
The person relates the return to the stake and compares the resulting relationship with the return / stake ratio that they perceive in others. In a schematic representation:
The person feels equality when
The person experiences inequality if either
In this relationship, all evaluations are made from the perspective of the person. The compilation in the figure above shows which situations of equality or inequality are possible.
A distinction is made between two types of exchange relationships: In a direct exchange relationship, the person compares himself directly with the other (s). In the indirect exchange relationship, the person compares himself to another, whereby both - the "person" and the "other" - are in an exchange relationship with a third party.
All evaluations are made exclusively from the point of view of the “person” and not the “other” or an objective observer.
There must be a comparator. It remains to be seen what considerations are used to select this comparative person. For this reason, R. D. Pritchard has presented an alternative concept, according to which an “internalized comparator” can be assumed instead of a specific person: Experience and social norms develop “internal standards” as a benchmark.
The formation of a quotient between yield and input places higher demands on the measurement scale and measured values than, for example, the formation of sums or differences. In addition, yields and stakes are sums of very differently dimensioned features, which means that they have to be transformed into a common unit.
While equity theory can in principle be used for all types of rewards, it is essentially only applied to the relationship between performance and financial reward.
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