Equity Theory in Human Resource Management

Introduction
Human resource management is an approach that is used for managing the
effectiveness in an organisation. It is designed to maximize the performance and resolve all
the conflicts that arise due to discrimination or other issues (Lazaroiu, 2015). The duty of
human resource management is look at employee benefits; training and development also
take care of the organisational fairness.
Theory of human resource management in terms of its capacity to establish the
conditions for a fair and equitable workplace
The purpose of human resource is to ensure that organisational success is met by
managing human capital along with implementing various policies so that fairness is met.
Some of the policies that are designed for maintaining the effectiveness and fairness in an
organisation are discussed below (Kiruja & Mukuru, 2018).
Adams equality theory is used for motivation and it offers number of advantage in
terms of equality. This policy assures that equality is obtained by the employees and extra
benefits are equally distributed. This theory has proved to be beneficial for the mangers as
they make them realize the trends in an organisation and motivates people (Lazaroiu, 2015).
This theory is capable of contributing to both theory and practice of motivation.
The basic proposition of equality theory is to maximize the outcomes this could be
done by apportioning rewards and costing system. Unlike many theories using equality
theory is simple and the sole objective is offer justice and offer equal opportunity to all the
employees (Gemeda & Tynjälä, 2015).

Effective management of employees is a key objective of human resource
management (HRM) theories which are targeted towards addressing various issues relating to
management of human capital in organisations. Maintaining fairness and equality among
employees has become crucial for corporations to ensure that they are able to avoid
discrimination in the workplace which leads to conflict among employees and the
management (Hassan, 2013). Lack of fairness and equality also resulted in negatively
affecting the performance of employees since they find it difficult to ensure that they are
unable to perform at their highest capability in the hostile working environment. The equity
theory developed by John Stacey Adams can assist corporations in ensuring that fairness and
equality are maintained between employees which resulted in motivating employees to
improve their performance as well. This is a relevant HRM theory which is used by
companies in order to improve motivation among employees (Gemeda & Tynjälä, 2015).
This theory also complies with various principles of Maslow’s hierarchy of needs and
Herzberg Two-Factor theory. This theory focuses on subtle and variable factors which affect
employee’s assessment and perception regarding their relationship with their work and the
employer (Tseng & Kuo, 2014). As per this theory, the employees become demotivated from
their work and employer if they feel that their inputs are greater than their outputs.
Employees expect greater outcomes if they put their hard work in order to achieve common
organisational goals. In case they did not receive appropriate outcomes, then they get
demotivated from their work and the organisation. This theory provides that all employees
should receive equal treatment and rewards for similar work. Discrimination leads to
inequality among employees, and they find it difficult to work effectively in the company. In
order to apply this theory, it is important that the employer focuses on understanding the
perspective of employees regarding the disparities between the inputs and outputs. This
theory assists the management in maintaining a fair relationship between the performance and

rewards in comparison to other (Al-Zawahreh & Al-Madi, 2012). As per this theory, fairness
and equality can be maintained when an individual perceives that his/her outcomes are
greater than his/her inputs. It is referred as underpaid inequality which creates an imbalance
between the rewards and inputs of employees which leads to discrimination in the workplace.
In the case of overpaid inequality, the inputs of an employee are greater than compared to
his/her outcomes which resulted in demotivating the employees.
Employees who did not receive equal outcomes as per their inputs feel like they are
being mistreated in the workplace. Therefore, the management is required to avoid both
overpaid and underpaid inequality and focus on implementing equity in the workplace. As
per the equity theory, an employee’s inputs are equal to his/her outcomes which eliminate the
issue of discrimination in the workplace (Ryan, 2016). Employees who receive equal
treatment in the workplace are more likely to be motivated to achieve their goals in the
workplace. For example, if an employee is working hard to achieve his/her targets, then such
employee should receive appropriate reward and recognition for the same hard work. If
another employee is also working hard and not receiving equal rewards or recognition, then it
creates the issue of unfairness which resulted in demotivating the second employee (Kiruja &
Mukuru, 2018). It also resulted in negatively affecting the performance of other employees
who see this mistreatment because they started to believe that they will face similar
consequences (Morand & Merriman, 2012). Therefore, it creates a negative working
environment in the workplace. It is important to understand that only monetary rewards are
not considered as appropriate outcomes for an employee’s inputs. Employees should receive
equal recognition and appropriation from the top level management which assists them in
ensuring that they are not demotivated from the policies of the corporation (Hirano &
Kasatani, 2017).