We often talk about the internal locus of control as the ultimate competitive advantage. The idea is simple. You own your outcomes. If the project fails, you didn’t prep enough. If the business scales, it’s because you ground out the right decisions. It’s a clean, high-agency way to live that eliminates the victim mindset.
But there’s a friction point where this mindset hits a wall. That wall is Equity Theory.
Equity Theory suggests that we don’t just value our outcomes in a vacuum. We value them relative to the effort and outcomes of those around us. We’re constantly running a subconscious equation. Is the ratio of my inputs and outputs equal to the ratio of yours?
When that equation doesn’t balance, the internal locus of control starts to feel like a liability.
If you believe you’re the primary driver of your success but you see someone else getting more for less, the cognitive dissonance is jarring. You start to question the fairness of the system. This is where high performers often stumble. They spend so much energy trying to control their internal variables that they become hyper-sensitive to the perceived inequity of external rewards.
The danger isn’t the unfairness itself. It’s the shift in where you place your focus.
When you feel under-rewarded relative to a peer, your brain offers two exits. You can either reduce your input to match the perceived output or you can try to change the outcome through external complaining. Both of these moves shift your locus of control from internal to external. You’re no longer driving. You’re reacting to the passenger in the next car.
In a professional environment, fair is a moving target. If you rely on a perfectly equitable environment to maintain your drive, you’ve actually outsourced your agency. You’ve given the system the power to dictate your effort levels.
The goal shouldn’t be to find a perfectly equitable situation. The goal is to acknowledge the inequity and choose to maintain an internal locus regardless. You don’t work hard because the reward is perfectly proportional to your neighbor’s. You work hard because you’ve decided that your inputs are the only thing worth measuring.
Don’t let a perceived lack of equity turn your internal locus into an external one. The moment you start adjusting your effort based on what someone else is getting, you’ve lost the lead.
I am a Canadian insurance and investment professional and the President and Chief Executive Officer of Chazz Financial Inc. and Chazz Capital Assets. I write about leadership, markets, insurance, investing, and decision making, with a focus on how structure and incentives shape outcomes.
I hold a business degree and I am a Fellow of the Canadian Securities Institute (FCSI®), a Chartered Life Underwriter (CLU®), a Chartered Financial Planner®, a Certified Health Specialist and a Mutual Fund Investment Representative.
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