HR Glossary
Adams Equity Theory

Adams Equity Theory

Updated on:
August 22, 2022


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Table of Content

What is Adams Equity Theory?

The Adams equity theory is that assets owned by a company are a measure of its value. The theory is also sometimes called the Adams value theory.

According to Adams equity theory, a company's assets are a means of obtaining funds needed to operate the company, and in determining the value of a company, a company's assets must be valued in a way that makes sense for the type of company.

How do I Apply Adams equity theory?

If you want to apply the equity theory in your workplace, consider the following tips:

  1. Ensure a fair balance among team members.
  2. Make sure you offer comparable compensation.
  3. Know what your team values.

The Adams equity theory depends on two assumptions:

First, the assets owned by a company must be measured or considered in terms of the company's ability to use them in obtaining funds to operate the company.

Adam's equity theory is necessary because it helps to ensure that employees feel fairly treated in the workplace. When employees feel like they are being treated equitably, they are more likely to be motivated and productive. Additionally, Adam's equity theory can help to prevent conflict within an organization.