Process theories stress the differences in people's needs and focus on the cognitive processes that create these differences. What all process theories have in common is an emphasis on the role of an individual's cognitive processes in determining his or her level of motivation.
One major process theory, equity theory, assumes that one important cognitive process involves people looking around and observing what effect other people are putting into their work and what rewards follow them, and comparing this ratio with their own. For instance, if someone offered you $35,000 a year for your first job on graduation from college, you'd probably grab at the offer and report to work enthused and certainly satisfied with your pay. How would you react, however, if you found out a month or so into the job that a co-worker- another recent graduate, your age, with comparable grades from a comparable college- was getting $40,000 a year? Most likely result would be setting.
The issue now centres on relative rewards and what you believe is fair. Individuals can also compare their effort-reward ratio to one that they experienced at another point in time. Equity theorists assume that this social comparison process is driven by our concern with fairness or equity. We perceive effort and reward not in absolute but in relative terms (Adams, 1965). When people perceive others enjoying a similar ratio of inputs (effort, qualification, skill level, and seniority) to outcomes (pay, advancement, fringe benefits) to themselves, they experience equity. When people perceive a ratio of inputs to outcomes that either favours other people (underpayment) or themselves (overpayment) they experience inequity, which is assumed to be a sufficiently unpleasant experience to motivate changes in either behaviour or perceptions.
Most subsequent studies, however, have found that predictions from equity theory are...