What Is the Equity Principle of Management? | Advantages and Disadvantages

In 1916, Henri Fayol, popularly known as the father of management, introduced the world to his 14 Principles of Management. It has been more than a century since Henry Fayol popularised these principles in his book “Administration Industrielle et Générale” (or “Industrial and General Management”), but they are still quite relevant to being a great manager.

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What Is the Equity Principle of Management?

This principle states that all employees must be treated equally with justice and kindness. Henri Fayol firmly believed that all the employees within the organisation should be given equal treatment irrespective of their gender, beliefs, colour, caste, religion, position, etc.

With respect to modern times, these pillars can be further extended to include sexual preferences, gender identification, marital status, age, and much more. Everyone in the organisation deserves fairness and respect.

When you treat your employees with equal respect, it creates a positive environment and motivates them to give their best at work. When the organisation promotes an unbiased attitude towards its people, it encourages them to stay loyal and work with complete devotion.

This principle becomes more relevant as time passes. Millennials and Gen Zers give high weight to a company’s environment and seek equal opportunities for growth.

As per 2022 research, 76% of millennials felt more empowered in an inclusive workplace. Also, 75% of Gen Z women and 66% of Gen Z men said that they would choose to work for a company that fosters a diverse and equitable work culture. These statistics further prove the significance of the application of this principle.

What Is an Example of the Principle of Equity?

Let’s take the example of a firm creating a new team for a special project that would require a lot of fieldwork. For the head, they wanted to hire someone internally. Person A has been in the firm for 5 years, understands the core values of the firm, has all the relevant skills, and is known for her commendable work record. On paper, she looks like the most promising candidate for the role.

However, the upper management refuses to consider her profile since she is married and she might not be ‘allowed’ by her in-laws to relocate.

In this case, refusing Person A’s profile without a prior and fair discussion is a breach of the Principle of Equity. The Principle of Equity vouches for equal opportunities for all employees based on their skills.

What Are the Advantages of Fayol’s Principle of Equity? 

Listed below are some of the advantages of the Principle of Equity: 

  • Motivates Subordinates

A company that doesn’t discriminate against employees provides the basis for a healthy workplace culture, further encouraging the employees to give their best in their respective jobs. Once they know that their skills and work are the only parameters they’ll be evaluated on, quality work and efficient delivery will become the major focal points of their growth.

  • Encourages Initiatives from Employees

A healthy work environment calls for a highly motivated workforce where employees show enthusiasm and willingly participate in various projects that facilitate the organisational objective.

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  • Builds Team Spirit

When every individual employee is facilitated in a healthy, positive, and non-judgmental environment, they tend to reach out to others more. This inculcates belongingness and team spirit in the most natural way.

The employees focus on attaining the common organisational goals collectively as a team rather than trying to compete against each other to get more credit. When employees feel that their employer values diversity and inclusivity, they are also more likely to feel a sense of belonging, which can further increase their desire to stay with the company.

  • Better Employer Branding

Equity in the workplace can have a positive impact on employer branding. It can enhance an employer’s brand by demonstrating a commitment to inclusion and fairness.

Companies that promote equity and inclusivity are more likely to be viewed as socially responsible and attractive to potential employees, particularly those that prioritise diversity and an impartial environment. This can lead to a stronger employer brand and an increased ability to attract top talent, which can ultimately benefit the company’s bottom line.

  • Higher Employee Retention

When employees feel that they are being treated fairly, they are more likely to feel satisfied with their jobs and less likely to seek employment elsewhere. Equity can create a sense of camaraderie among employees, which can lead to increased loyalty and a desire to stay with the company. This ultimately benefits the company through increased productivity and reduced turnover costs.

What Are the Disadvantages of the Principle of Equity by Fayol?

Listed below are some of the disadvantages of the Principle of Equity:

  • Reduced Focus on Merit

 When equity is prioritised above all else, it can result in a reduced focus on merit and performance. This can lead to employees being rewarded based on factors such as demographic characteristics, rather than their skills and contributions.

  • Resentment Among Employees

If equity policies are perceived as favouring certain employees or groups, it can lead to resentment among other employees who feel that they are not being treated fairly.

  • Negative Impact on Business Performance

If equity policies result in hiring or promoting less qualified individuals in the name of diversity, it can have a negative impact on business performance and productivity.

  • Limited Hiring Pool

When companies prioritise diversity over other qualifications, it can limit the pool of candidates for certain roles, potentially resulting in a less qualified workforce.

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FAQs on Equity Principle of Management

Here are some frequently asked questions on the Equity Principle of Management:

What is equity in Fayol’s principles of management?

As per Fayol’s principles of management, ‘Equity’ advocates a workplace that is free of any form of discrimination—color, caste, gender, religion, position, etc. He believed that no worker should be favoured or punished on the basis of the employer’s or manager’s personal preferences. Everyone should be treated equally with justice and kindness.

What is the principle of equity in one sentence?

All the employees in an organisation should be treated with equal respect and kindness, irrespective of their gender, beliefs, colour, caste, religion, position, age, etc.

Is equality a principle of management?

Even though ‘equality’ and ‘equity’ are similar in meaning and often used interchangeably, their key differences cannot be ignored.

While ‘equality’ means treating everyone equally on the same scale and facilitating them with the exact same resources, ‘equity’ goes a step further and recognises that every individual has their own set of needs and situations and advocates the allocation of the resources in such a way that it provides equal opportunities to everyone. Hence, while equity is one of the fourteen principles of management, ‘equality’ is not.

Maternity and paternity leaves for pregnant couples can be one of the most befitting examples of how organisations support equity over equality by giving their employees a fair chance to take a long pause from professional life for an important personal journey and resume their career growth when things settle down.

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