Equity Theory
Individuals compare their job inputs and outcomes with those of others and then respond so as to eliminate any inequities.
Equity theory recognizes that individuals are concerned not only with the absolute amount of rewards for their efforts, but also with the relationship of this amount to what others receive.
Historically, equity theory focused on:
- distributive justice or the perceived fairness of the amount and allocation of rewards among individuals.
- however, equity should also consider procedural justice or the perceived fairness of the process used to determine the distribution of rewards.