Equity Theory of Motivation

Equity Theory explains that motivation at work is shaped by an individual’s perception of fairness. People constantly compare their inputs (effort, skills, time) and outcomes (salary, recognition, opportunities) with those of others. When they sense fairness, motivation strengthens. But when they perceive inequity—whether feeling under-rewarded or over-rewarded—tension arises, prompting them to restore balance. This may occur through reducing effort, seeking changes in rewards, or even leaving the organization. The core idea is simple yet powerful: fair treatment fuels engagement, while perceived unfairness undermines performance and satisfaction. Organizations that ensure transparency, consistency, and clear communication are more successful in maintaining motivated, committed teams.