According to the _ a person compares her own ratio of perceived outcomes to perceived inputs to the ratio of a comparison other.
A. reinforcement theory
B. predicted outcome value theory
C. social exchange theory
D. equity theory
E. expectancy theory
The correct answer and explanation is :
Correct Answer: D. Equity Theory
Explanation:
Equity Theory, developed by John Stacey Adams in 1963, explains how individuals assess fairness in social exchanges, particularly in the workplace. According to this theory, people determine fairness by comparing their own ratio of perceived outcomes (rewards such as salary, benefits, and recognition) to perceived inputs (effort, skills, experience, and time) with the ratio of a comparison other (a colleague, peer, or industry standard).
If an individual perceives their input-to-outcome ratio as equal to that of their comparison other, they feel a sense of fairness and are likely to remain satisfied and motivated. However, if they perceive an imbalance—either receiving less than what they believe is fair (under-rewarded inequity) or receiving more (over-rewarded inequity)—they may experience distress. This can lead to actions such as reducing effort, negotiating for better rewards, or even leaving the organization.
For example, if an employee works just as hard as a colleague but receives a lower salary, they may feel demotivated and perceive inequity. Conversely, if an employee gets paid more than their coworker for the same work, they might feel guilt or attempt to justify the difference by increasing their effort.
Equity Theory is widely applied in human resource management, organizational behavior, and interpersonal relationships. Employers use it to ensure fair compensation, recognition, and workload distribution to maintain employee motivation and satisfaction. The theory emphasizes that fairness and perceived equity are crucial in maintaining a productive and engaged workforce.
By understanding and addressing equity concerns, organizations can foster a positive work environment, enhance employee retention, and improve overall job performance.