Describe and discuss equity theory and explain how a manager might apply it
in the workplace. Give specific examples to illustrate your answer.
“Equity Theory suggest that employees compare their job inputs
(that is, effort, experience, education, competence, creativity) and outcomes
(that is, salary levels, raises, recognition, challenging assignments, working
conditions) with those of others. We perceive what we get from a job situation
(the outcomes mentioned above) in relation to what we put into it (the inputs
mentioned above), and then we compare our outcome-input ratio with the
outcome-input ratio of relevant others. If we perceive our ratio to be equal to
that of the relevant others with whom we compare ourselves, a state of equity
is said to exist. We perceive our situation as fair and justice prevails” (Nancy,
Stephen, & Timothy, 2014, p.127). For example, if employees work in a
company for many years, and their salaries are not well paid. They may feel
unfair and under-rewarded. It might cause job un-satisfaction.
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- Fall '17
