The basic advantage here is fairness. Workers, when they perceive they are treated fairly, work harder, are more loyal and produce better products.
Economically, this means that labor, management, suppliers and customers are seen as a single economic idea. None is treated better or worse, but their different positions require different kinds of work and different, but commensurable, rewards.
It may even be a quantitative variable if the improvements of labor efficiency and productivity in a happy workplace versus an alienated one can be measured.
If workers are to be treated fairly, they must have rewards proportionate to the value they create. The outcome here is a far more efficient and pleasant place to work.
* High turnover rates due to lack of raises, wages, and benefits in the supermarket
* Increases the rate of competitiveness among employees.
* May disrupt employees’ mood in the workplace.
* Evaluation from employer(s)/employee(s) is not accurate.
1. Who discovered it?
John Stacey Adams
2. What is the theory about?
- Fair distributions of resources within interpersonal relationships.
- Fair balance between an employee’s inputs and outputs.
3. When can this theory be used in business?
This theory can be used when the manager gives a higher pay only to certain employees whether they have a higher position in the company or not. This is an example of inequity. Employees are not getting the right balance between their inputs and outputs.
4. Why should we use this approach to motivate staff?
We should use this approach to motivate staff because this theory teaches the employees not to be dependent to the extend where he/she believes reward exceeds effort.