Leadership qualities: Equity theory I. Relevant facts * Equity theory was coined by John Stacey Adams in 1963 on job motivation * It does not concentrate on the “individual self,” but includes the other employees * The “self” compares him or herself with other employees in the organization * When people feel well treated and appreciated in the job place, they get motivated to perform. * When they are not appreciated, they are demotivated and grow a feeling of disaffection * The equity theory measures the level of fairness in the workplace by comparing an employee to the others * The theory does not look at how the rewards exceed the efforts, but looks at the fairness that a person is getting in the workplace compared to his or her fellow workers * A worker compares the reward/investment ratio and how he or she enjoys being in the workplace * According to the theory, the input to work is not hours only, and the reward is not money only * Employees look at what they put into work, and what they get in return * An employee compares these with the other employees (referents) to determine the fairness * In our case, some employees feel that their counterparts are being favoured. * They feel that their contributions are not equal, and their efforts are not recognized

II. Identification of the problems 1. Morgan is failing to perform his duties properly due to lack of motivation and negative influence from co-workers 2. Julie has motivation problems based on the fact that she is a family member of the owner in the group 3. The cohesion of the work team is low due to perceives inequality between the output received by members of the in-group and out-group, based on their inputs III. Diagnosing the problems
The organization is facing problems from the employees. The employees have different