Equity Theory of Motivation: Adams' Model With Examples

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Picture a bus depot the morning after the names go up for the next driver-trainer course. Three drivers got places. One who missed out has driven for the company for 14 years, helps new drivers without being asked and covers extra shifts when the roster falls over. He walks into his team leader's office and asks, "What more do I have to do around here?" The team leader was promoted from driving four months ago and has never had to explain a decision like this.

I'm an instructional designer at Coursebox, where we make AI tools for employee training, so I'll mention our product where I tested it. J. Stacy Adams' equity theory explains what that driver is weighing up and what he may do next. Below I set out the theory from Adams' own 1965 chapter, including his six ways people restore equity and what he thought of the evidence for each. Then I cover the studies and their weak spots, how the theory grew into organisational justice, three real cases where explanations and manager training were measured, and two free templates.

What is equity theory of motivation?

Equity theory of motivation is J. Stacy Adams' account of fairness at work: people compare their own perceived ratio of outcomes to inputs with other people's, and an unequal ratio, in either direction, creates tension that they act to reduce.

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Adams set the theory out in a 1963 article in the Journal of Abnormal and Social Psychology, "Towards an understanding of inequity", and gave the fuller version in his 1965 chapter "Inequity in social exchange", in volume 2 of Advances in Experimental Social Psychology. He wrote both while working at General Electric's Behavioral Research Service in Crotonville, New York. The 1965 chapter is the one to quote, because it contains the definitions, the six ways of reducing inequity and Adams' own view of the evidence. His definition reads:

"Inequity exists for Person whenever he perceives that the ratio of his outcomes to inputs and the ratio of Other's outcomes to Other's inputs are unequal." (1965, p. 280)

Person is whoever is doing the comparing, and Other is whoever they compare themselves with. Written as a formula, there is equity when Person's outcomes divided by Person's inputs equal Other's outcomes divided by Other's inputs, and inequity when the two ratios differ in either direction. Two qualifications stop the formula being misused:

• Everything in it is perceived. "The values of outcomes and inputs are, of course, as perceived by Person" (p. 280), and each term is a weighted sum of whatever Person sees as relevant (p. 281). A manager cannot calculate someone else's ratio. They can only find out what that person counts.
• Inequity runs both ways. It arises "not only when he is, so to speak, relatively underpaid, but also when he is relatively overpaid" (p. 281), and the bigger the gap between the ratios, the more inequity is felt.

What makes the comparison motivating is tension. Adams drew on Leon Festinger's theory of cognitive dissonance and stated two postulates: "the presence of inequity in Person creates tension in him", and "the tension created in Person will motivate him to eliminate or reduce it" (p. 283). So equity theory is about comparison and tension, not a list of needs. It describes the tension people feel when an exchange seems unfair and the ways they may reduce it.

The scope is wider than pay. Adams wrote that the ideas apply to "any social situation in which an exchange takes place", including exchanges "between teammates, teacher and student" (p. 276). At work, that covers pay and also promotions, recognition, rosters and access to training and development. Here are the main ideas at a glance.

One field test of the theory came from a real pay cut. It shows underpayment inequity in one employer and what an explanation did to people's reaction.

Case study: Explaining a pay cut at manufacturing plants

This was a field study that tested an equity theory prediction by name. Pay was temporarily cut by 15% in manufacturing plants, and Greenberg measured employee theft before, during and after the cut, and in groups whose pay did not change.

• What they did: The basis for the pay cut was explained to employees in different ways in different groups, so the study could compare groups given a thorough, sensitive explanation with groups that were not.
• Evidence and result: In Greenberg's 1990 paper in the Journal of Applied Psychology, groups whose pay was reduced had "significantly higher theft rates" than before or after the cut, or than groups whose pay was unchanged. Where the basis for the cut was "thoroughly and sensitively explained to employees, feelings of inequity were lessened, and the theft rate was reduced as well." I read the abstract, not the full article, so this case gives no plant-level figures.
• Limitation: It was a field study of one pay cut in existing workplaces, so differences between the plants other than the explanation cannot be ruled out. Theft was measured for groups, not individuals.
• Lesson: People restored the balance in a way the employer did not choose. The explanation lessened the sense of inequity and the theft that went with it. It did not reverse the pay cut. For a manager, the explanation is part of what people weigh, and it is worth preparing, but no explanation turns a loss into a gain.

Which sources to read

Adams developed the theory at General Electric in the early 1960s. He tested it with Rosenbaum in a 1962 experiment, set it out in 1963 and gave the full version in 1965. He built on George Homans' idea of distributive justice and on Festinger's dissonance theory, and he published as J. Stacy Adams. If you want the source rather than summaries, start with one of these:

• Adams (1965), "Inequity in social exchange". Read this one. It defines inputs, outcomes and the comparison Other, sets out the six ways of reducing inequity with the evidence for each, and ends with Adams' own caveats.
• Adams (1963), "Towards an understanding of inequity". Read it for the first statement, with its focus on wage inequity. Adams' own reference list spells the title "Toward", and the journal record says "Towards".
• Colquitt (2001), the four-factor justice measure. Read Colquitt's 2001 paper in the Journal of Applied Psychology for where the field went next. Its questionnaire items make a practical fairness checklist for any decision.

The worked example: training places at one bus depot

Here is the hypothetical example I use from here on. A metropolitan bus operator runs a depot with about 220 drivers on rotating shifts. The learner is a new depot team leader, promoted from driver four months ago and now responsible for a team of 18 drivers. Being a good driver does not mean they can explain a decision well, and nobody has trained them to.

The decision is about training places. The operator funds 3 places at this depot on the next intake of its 5-day driver-trainer course. Driver-trainers coach new drivers on the road and get a per-shift allowance when they do. 11 drivers from the team leader's area applied. The operations manager set four criteria and published them on the depot noticeboard and the intranet before applications opened:

• at least 3 years driving for the operator;
• no at-fault collisions in the past 24 months;
• a pass on an observed assessment drive with a senior driver-trainer;
• availability on the course dates.

If more than 3 applicants met all four, the assessment drive score decided. The next intake is in 6 months, and a driver can ask the operations manager to review how their assessment drive was scored.

The driver with 14 years' service met all four criteria, including a pass on the assessment drive, but his score was below the third-placed applicant's, and that applicant has 4 years' service. The team leader cannot change the decision or add a place, and may not tell anyone another applicant's score or record. They have to explain the decision to him in a one-to-one conversation within 2 working days.

The intended outcome is that the team leader can explain an allocation decision fairly: what was decided, the criteria and how they applied to him, his own assessment feedback, an acknowledgement of his years and the help he gives new drivers, what would change his chances next time, how to ask for a review, and time to listen. It is not to make him agree, and it is not to change the decision. The example suits equity theory because the training place is an outcome, seniority and the assessment drive are competing inputs, and the driver with 4 years' service is the obvious person to compare with.

Inputs, outcomes and the comparison Other, worked through the depot

Equity theory has three elements: what people put in, what they get out and whom they compare themselves with. Each one below has a short definition, then the same three labels: Adams' words, the depot, and what it means for training decisions.

1. Inputs

Inputs are whatever a person sees as their contribution to the exchange. Adams' list is broad: "his education, intelligence, experience, training, skill, seniority, age, sex, ethnic background, social status, and, of course, the effort he expends on the job" (1965, pp. 276 to 277). Training is on the list. So are things an employer may not count at all.

• In Adams' words: Inputs "are as perceived by their contributor and are not necessarily isomorphic with those perceived by the other party to the exchange" (pp. 276 to 277).
• At the depot: The driver counts his 14 years, the extra shifts and the informal mentoring of new drivers. The published criteria count 3 years as a minimum, a clean record, the assessment drive and availability. His biggest inputs, as he sees them, did not decide the outcome.
• For training decisions: Before you publish criteria, ask what applicants will think should count, and say how the criteria treat it.

2. Outcomes

Outcomes are what a person gets from the exchange, and they go well beyond pay. Adams listed "pay, rewards intrinsic to the job, satisfying supervision, seniority benefits, fringe benefits, job status and status symbols", and noted that outcomes can be negative, such as poor working conditions or monotony (p. 278).

• In Adams' words: Adams treated status as a real outcome, down to "the right of a higher-status person to park his car in a privileged location" (p. 278).
• At the depot: The outcomes in play are the course place, the allowance, the title of driver-trainer and recognition for the mentoring he already does.
• For training decisions: A place on a course is an outcome that others will compare, so treat its allocation like any other reward. Recognition is an outcome too, so give it for contributions people can see, such as mentoring new drivers.

3. The comparison Other

The comparison Other is the person or group someone compares their ratio with. Adams did not say whom people choose, and he was frank that "this will not be done here, as the task is beyond the scope of the paper" (p. 280). Other can also be yourself in another job or role, and later research added yourself at an earlier time.

• In Adams' words: "Other is usually a different individual, but may be Person in another job or in another social role" (p. 280).
• At the depot: The driver can compare himself with the newer driver who got a place, with drivers at another depot that had 5 places this intake, or with himself five years ago, when places went by seniority.
• For training decisions: Expect people to compare across sites and across years. If another site or an earlier intake used different rules, say so and explain why.

How people restore equity: Adams' six ways

When a ratio feels unequal, Adams proposed six ways people reduce the tension, each with his own heading (1965, pp. 283 to 295). They are alternatives, not stages: people do not move through them in order, and Adams did not predict which one a given person will pick. The table gives what Adams says about each.

Adams also proposed how people choose among the six. People try to protect the outcomes they value and avoid costly increases in effort. They resist changing what they believe about their own inputs and outcomes more than what they believe about Other's. And they hold on to a comparison once it has become an anchor. On quitting, he was specific: "Leaving the field will be resorted to only when the magnitude of inequity experienced is high and other means of reducing it are unavailable. Partial withdrawal, such as absenteeism, will occur more frequently and under conditions of lower inequity" (p. 296). He called these propositions "fairly crude" (p. 296), and he did not claim to know which one a given person would choose.

What the studies show, and where they are weak

Much of the early evidence came from laboratory experiments with students, and most of those tested overpayment.

• Hourly and piece-rate pay. In Adams and Rosenbaum's 1962 experiment, students hired to interview members of the public were made to feel overpaid. Paid by the hour, they produced more (11 overpaid students against 11 controls). In a second study of 36 students, those paid by the piece who felt overpaid produced less, and, in Adams' account of these experiments, worked more carefully instead.
• The proofreaders. In a later experiment that Adams describes, students told they were unqualified but paid the standard rate of 30 cents a page did fewer pages and more careful work, and some marked correct words as errors (1965, pp. 284 to 286).
• Clark's supermarkets. Adams reports a field study of checkout pairs in eight supermarkets, where a higher-status bundler working for a lower-status cashier slowed down. In the store where these mismatches were more frequent, it cost "approximately 27% more to operate" (pp. 286 to 288). That is a comparison between stores, so it shows an association, not a cause.
• Status, not pay. In Greenberg's 1988 field experiment, 198 employees in an insurance company's underwriting department drew lots for temporary offices while their own were refurbished, for 10 working days. Those in higher-status offices raised their performance and those in lower-status offices lowered it, and the size of the change went with the size of the status mismatch. The biggest overpayment effect was "not sustained" into the second week (p. 609), and Greenberg warned that more research was needed before "managers can be advised to manipulate workplace elements" (p. 612).

That last study is useful for training decisions, because the outcome people reacted to was status, not money. A place on a valued course is the same kind of outcome. That is my inference, not something the study tested.

The overpayment evidence is the weak spot. In Mowday's review chapter in Steers and Porter's Motivation and Work Behavior, "Research support for the theory appears to be strongest for predictions about underpayment inequity", and overpayment results "are often in the predicted direction but fail to reach acceptable levels of statistical significance". Many laboratory studies created overpayment by telling students they were unqualified, and when researchers changed actual pay instead, less support was found. Adams himself expected people to tolerate overpayment more easily, since some of it "can be acceptably rationalized as 'good fortune'" (1965, p. 282), and he admitted there was "no direct, reliable evidence on this point".

His overall verdict, in full: "On the whole, empirical support for the theory is gratifying, but it falls short of what is desirable. More research is required. This is particularly so because some of the support comes from data leading to the formulation of parts of the theory." (p. 297)

From equity theory to organisational justice

Is equity theory still relevant? Yes, as one part of a larger idea. Equity theory is about whether outcomes are fair, which researchers now call distributive justice. Over the next three decades, researchers added fairness of procedures and fairness of treatment, and organisational justice is the name for all of it.

• Distributive justice goes back to Homans in 1961 and to Adams.
• Procedural justice came from Thibaut and Walker's work in 1975, with its focus on having a voice, and from Leventhal's rules for fair procedures in 1980.
• Interactional justice came from Bies and Moag in 1986, defined as "the interpersonal treatment people receive as procedures are enacted", with four criteria: justification, truthfulness, respect and propriety.
• The four-way split came when Greenberg suggested in 1993 that interactional justice has two parts, interpersonal and informational, and Colquitt tested it in 2001. In two studies, one at a university and one at an automobile parts manufacturer, the four came out as distinct dimensions.

Those accounts of the earlier work come from Colquitt's 2001 measure paper, which also supplies the questionnaire items behind this table.

The four are related, but they are not the same thing. A 2001 meta-analysis by Colquitt and colleagues pulled together 183 justice studies.

In Colquitt, Conlon, Wesson, Porter and Ng's review, the dimensions were linked to outcomes such as job satisfaction, commitment, citizenship behaviour, withdrawal and performance. I read the abstract, not the effect sizes, so I can say that each dimension adds something but not how much.

The practical point is that process and treatment change how a poor outcome lands. In Skarlicki and Folger's 1997 survey of 240 manufacturing employees, "A relation between distributive justice and retaliation was found only when there was low interactional and procedural justice." It was a survey, so it shows what went together rather than what caused what. Bies put the expectation plainly in a 2001 chapter: "people expect to receive an explanation or account of decisions made that affect them, and, when they fail to receive such information, they feel unfairly treated."

For the depot, that is where the team leader has room to act. The outcome and the criteria are fixed, but the explanation, the route to a review and the respect in the conversation are still in the team leader's hands.

How to use equity theory when you make or explain a decision

Adams did not write a method for managers, so this workflow is my adaptation of his theory and the justice research, carried through the depot decision. Here it applies to scarce opportunities such as a funded training place, a promotion or a preferred shift. Certification itself must follow its required competence standard, not a scarcity ranking.

1. Name the outcome and who will compare it. Write down what is being allocated, who will apply and whom they are likely to compare themselves with. At the depot: 3 places, 11 applicants, and drivers at the other depot.
2. Decide which inputs count, and say what does not. Write the criteria, and say how they treat inputs people care about, such as seniority, experience and informal effort.
3. Publish the criteria before anyone applies. Put them where everyone sees them, and give people a chance to ask questions first.
4. Apply them the same way to everyone, and keep records. Score assessments against a standard sheet, and keep the sheet.
5. Give people a way to ask for a review. Name who reviews what. At the depot, the operations manager reviews how an assessment drive was scored.
6. Explain the outcome in person, soon. For this depot, within 2 working days, cover the decision, the criteria and how they applied to the person, their own results, an acknowledgement of their contribution, what would change next time and how to ask for a review. Then listen.
7. Hold four lines. Do not promise a future place, blame head office, compare the person with a named colleague or disclose anyone else's results.
8. Watch what happens next. Ask how the person sees the decision and follow up before the next intake. Reduced effort can have several causes; do not diagnose inequity from behaviour alone.

The depot conversation, planned

Here is the team leader's plan for the conversation with the driver, built from steps 6 and 7.

The driver may still think seniority should count for more. The conversation cannot settle that disagreement. It should explain the recorded decision and review route, while taking a specific concern about the criteria or scoring back to the operations manager rather than treating an explanation as a substitute for correction.

Can managers be trained to handle decisions fairly?

Yes, within limits. Three training studies found measurable effects on how staff felt or how fair supervisors seemed, though none measured job performance. The closest real precedent for the depot example is a short course for nursing supervisors.

Case study: Training nursing supervisors after a pay cut in US hospitals

This was a training study based on organisational justice. Four private hospitals in the US Northeast belonged to one healthcare organisation, and a change in pay policy cut nurses' pay at two of them. According to Ohio State University's account of the study, nurses moved from hourly pay with overtime to salaries, a cut of about 10% for the same hours.

• What they did: Nursing supervisors at one hospital with the pay cut and one without were trained in interactional justice. The university's news release describes two four-hour sessions on consecutive days, on treating staff "with politeness, dignity and respect" and on "providing thorough, accurate and complete explanations of key decisions".
• Evidence and result: Greenberg's 2006 paper collected self-reported insomnia from 467 nurses. Insomnia was significantly greater where pay was cut, but significantly lower among nurses whose supervisors had been trained, "both immediately after training and 6 months later".
• Limitation: There was one hospital per condition, so differences between hospitals cannot be separated from the training. Sleep was self-reported, and the training content comes from the university's news release rather than the method section. Performance and retention were not measured.
• Lesson: Where supervisors had eight hours of this training, the nurses they managed reported less insomnia, still visible six months later. With one hospital per condition, that is a strong signal, not proof, and the pay cut stayed.

A second study tested the skill directly, in a randomised design.

Case study: Training Canadian supervisors to handle discipline fairly

This was a training study based on procedural justice. Disciplinary action is an unwelcome decision that supervisors have to explain, and the researchers asked whether fairness in handling it can be taught.

• What they did: Canadian supervisors of unionised employees were randomly assigned to a training programme based on procedural justice theory (35 supervisors) or to a control group (36). Afterwards they ran simulated disciplinary meetings based on real incidents.
• Evidence and result: In Cole and Latham's 1997 paper, both unionised employees and disciplinary experts, including managers, union officials and lawyers, rated the trained supervisors higher on disciplinary fairness than the control group. The trained supervisors also reported more confidence, and that confidence helped explain the effect.
• Limitation: The meetings were role plays, not real disciplinary cases, and nothing was measured afterwards at work. I read the abstract, so I cannot report the training's content or length.
• Lesson: Fair handling of an unwelcome decision is a skill people can practise and that others can judge. Practise the conversation, then check how it goes in a real one.

A third line of work moved from supervisors to union officers. In Skarlicki and Latham's 1997 replication, training 25 union leaders in organisational justice principles increased 177 members' perceptions of their leaders' fairness, and the members' helping behaviour towards the union and each other. The original 1996 study was a quasi-experiment rather than a randomised trial.

None of these studies tested a course on allocating training places, and I found no study of that. The application to training decisions is my reasoning from Adams' inputs and outcomes and from the justice research. The studies support one design choice: in the randomised study, supervisors were judged on how they handled role-played meetings, so practising the conversation is a sensible way to build and check the skill.

What team leader course requests ask for

To see whether people brief courses on these skills, I looked at course requests typed into Coursebox in the 90 days to 7 October 2026: one per person, from English-language browsers, with no uploaded file. Of 266 prompts, 104 were course requests. Two independent AI readers each classified all 104 against written definitions, and every request either reader flagged was re-read by hand. They agreed on every fairness-related category.

About one in five requests, 18 or 19, were for staff training in a work organisation. The clearest people-leader brief was for an internal supervisors' course that named high turnover and low morale as costs of poor supervision, but its visible text did not mention the conversations behind them. The request was cut off in our export, so its later modules are unknown. None of the 104 asked learners to practise a workplace conversation in their own words.

The sample is small, and it covers requests, not finished courses. Leadership training may run elsewhere or start from uploaded files, which this sample leaves out. Still, if you want a course that teaches team leaders to explain a decision fairly, you have to write the decision, the criteria and the practice into the brief yourself.

Equity theory vs self-determination theory and other motivation theories

Equity theory is often taught alongside other motivation theories, and they answer different questions. The table is my synthesis, not a ranking. I found no study comparing them head to head.

Equity theory explains reactions to how outcomes are shared; self-determination theory explains the quality of motivation behind the work itself. The two fit together: a fair allocation removes one reason for resentment, and support for autonomy, competence and relatedness keeps people valuing the job. The ARCS model is for checking a course, not a decision. For building the team leader's skill, social cognitive theory suggests showing a good explanation and then having learners try one. Broader motivation training for managers can cover all of these. For the depot, I would use equity theory to anticipate how the driver will see the outcome, and organisational justice to plan the process and the conversation.

Criticisms and limitations of equity theory

Equity theory has lasted, and so have its problems. Seven come up in the research.

• Adams said the evidence fell short. His own verdict was that support "falls short of what is desirable", partly because some of it came from the data used to build the theory (1965, p. 297).
• Overpayment predictions are weakly supported. Support is strongest for underpayment, and many overpayment results came from telling students they were unqualified. In Greenberg's 1988 study, the biggest overpayment effect dropped in the second week.
• The theory does not say whom people compare with. Adams left it open. Goodman, as reported in Mowday's review, distinguished comparisons with other people, with your own standards and with the organisation's system, and found that a majority of 217 managers used more than one.
• Inputs and outcomes cannot be measured from outside. They are perceived and weighted by each person, so nobody can calculate another person's ratio. Adams named how people "aggregate" their inputs and outcomes as an open question (p. 297).
• People may differ in how much equity they want. Huseman, Hatfield and Miles proposed in 1987 that some people prefer a lower ratio than others (Benevolents), some an equal one (Equity Sensitives) and some a higher one (Entitleds). It was a conceptual paper, so treat the three types as a proposal, not a way to sort staff.
• Culture shapes the norms. Fischer and Smith's 2003 meta-analysis of 25 studies in 14 cultures found that power distance (how much a culture accepts unequal status and authority) and hierarchy explained differences in how people allocate rewards, and that individualism and collectivism did not. Bolino and Turnley noted in 2008 that "relatively few studies have investigated the cross-cultural applicability of the theory".
• The outcome is only part of fairness. The justice research shows that procedure, treatment and explanation also shape how fair a decision feels, which equity theory on its own leaves out.

Using equity theory with an AI course builder

On 9 October 2026 I briefed Coursebox to build a short course for new depot team leaders called "Explaining a training decision your team won't like". Coursebox is my product, so weigh my account with that in mind. The brief gave the depot facts above and asked for eight sections in a set order: a short "Before you start", why the decision feels unfair, the decision and the criteria, what a fair explanation includes with a weak and a stronger example, an open-text explanation with written feedback, three open-text replies to the driver's pushback, a real conversation with a reflection afterwards, and a wrap-up last. It ruled out points, badges and a graded test.

The first outline kept the frame. It opened with "Before You Start", built the course around the real conversation and put the wrap-up last.

The order inside it was the problem. The outline had 4 sections instead of 8, and it put "Draft the explanation" and "Answer three pushbacks" before "Build a fair explanation". Learners would have written their explanation before being shown what a fair one includes, so written feedback against the seven points would have measured them against something they had not been taught. Two quizzes had also appeared where we asked for open text.

One follow-up message fixed it. I asked for the eight sections in the brief's order, with the fair explanation before the writing task, and open text throughout. After reloading, the outline had 8 sections in the order I briefed, 10 pages, no quizzes and 5 open-text assignments. It came to about 1 hour 4 minutes against the 30 minutes I asked for, so it needs trimming.

I then generated the course and read the pages. The page comparing two explanations listed all seven points of a fair explanation and named the boundaries to hold, such as not blaming head office. The three pushback replies, "It's who you know", "14 years counts for nothing" and "I'll stop helping", were separate open-text tasks, and there were no points or badges. The builder replaced our wrap-up with its own Key Takeaways page at the end. One page drifted: the writing task asked learners to use "the driver's self-assessment feedback", which does not exist in the scenario, and to write "at least 300 words", turning a spoken one-to-one into an essay. I rewrote the task in the page editor to ask for what learners would say "the way you would say it, not as an essay", against the seven points and the three things to avoid from the brief, and checked it after reloading.

That is the limit of what I checked: the outline and the generated pages. I did not submit a test answer, so I cannot say anything about the written feedback, and I did not run the course with team leaders. The pages I checked do not establish that the allocation was fair or change this depot's criteria. Training can help managers recognise a flawed process and escalate it for correction. With the order fixed and the writing task rewritten, the course now shows team leaders what a fair explanation includes before they write their own, and asks for it in their own words.

Before you brief a course like this, it helps to check whether the decision itself was made fairly, and include an escalation route if the conversation exposes a process defect.

Putting equity theory to work

Equity theory answers a question every allocation decision raises: why do people react so strongly when someone else gets what they wanted? Because they compare what they put in and get out with what others put in and get out, and an unequal comparison creates tension they will reduce somehow. On Adams' account, cheaper reactions such as giving less are far more common than leaving. The theory is better at predicting reactions to underpayment than to overpayment, and it cannot tell you which reaction a person will choose. Use it to anticipate how a decision will be seen, and use the justice research to plan the criteria, the review route and the explanation.

Before you next allocate a training place, a promotion or a shift pattern, write down the criteria, including how they treat seniority and effort, and publish them before anyone applies.