The correct option is d) Outcome-input ratio According to the equity theory, individual motivation factors will affect the output and input ratio with the ratio of others output and input.

What does the equity theory explain?

Equity theory is a theory of motivation that suggests that employee motivation at work is driven largely by their sense of fairness. Employees create a mental ledger of the inputs and outcomes of their job and then use this ledger to compare the ratio of their inputs and outputs to others.

What are the basic principles of equity theory?

Equity theory is based on a principle that peoples' actions and motivations are guided by fairness and that discrepancies in this fairness in the workplace will spur them to try and redress it.

What does equity theory assume?

As in marriage and other contractual dyadic relationships, equity theory assumes that employees seek to maintain an equitable ratio between the inputs they bring to the relationship and the outcomes they receive from it (Adams, 1965).

What does the equity theory explain quizlet?

Equity Theory. Explains how people perceive fairness in an organization. This is based on a ratio of inputs and outputs. - Inputs: Energy, knowledge, hard work. - Outcomes: Salary, benefits, job satisfaction.

What is EQUITY THEORY? What does EQUITY THEORY mean? EQUITY THEORY meaning & explanation

22 related questions found

What is an example of equity in psychology?

Often discussed in relationships, this is a situation in which people receive in proportion to what they give to the relationship. Equity does not have to be identical or exact. Consider, for example, household chores (this is a stereotypical example, but we use only to illustrate the point).

What are the three components of process theory?

The process theory includes three components: the organizational plan, the service utilization plan, and specifications of their outputs (Rossi et al., 1999).

Is equity theory a content theory?

The main content theories are: Maslow's needs hierarchy, Alderfer's ERG theory, McClelland's achievement motivation and Herzberg's two-factor theory. The main process theories are: Skinner's reinforcement theory, Victor Vroom's expectancy theory, Adam's equity theory and Locke's goal setting theory (Figure 1).

What is the equity theory and how does it work?

Equity Theory is based on the idea that individuals are motivated by fairness. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation fair in their eyes.

What is social equity theory?

This article describes social equity theory (SET), which proposes that racial-ethnic achievement gaps originate from two kinds of social process, direct and signal influences, that these two kinds of processes operate across developmental contexts, and that the kind of influence and the setting in which they are ...

What is the Equity Theory discuss Equity Theory applications?

Definition: Equity theory, popularly known as Adam's equity theory, aims to strike a balance between an employee's input and output in a workplace. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management.

Why is Equity Theory important?

Equity theory explains how employees determine what is fair and how they act upon their perceptions. ... As a result, employee perceptions about fairness do matter–whether they are real or misguided. For managers it is better to effectively address these concerns than ignore them.

What are the traits of Equity Theory?

Adams' Equity Theory calls for a fair balance to be struck between an employee's inputs (hard work, skill level, acceptance, enthusiasm, and so on) and an employee's outputs (salary, benefits, intangibles such as recognition, and so on).

Why is equity theory described as a process theory?

Equity Theory. In contrast to the need-based theories we have covered so far, process-based theories view motivation as a rational process. ... Equity theory proposes that people value fair treatment, which motivates them to maintain a similar standard of fairness with their coworkers and the organization.

How do you use equity theory?

The equity theory of motivation is the idea that what an individual receives for their work has a direct effect on their motivation. When applied to the workplace, it means an individual will generally aim to create a balance between what they give to the organization compared to what they get in return.

What do you mean by equity?

Equity represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off. ... The calculation of equity is a company's total assets minus its total liabilities, and is used in several key financial ratios such as ROE.

How does equity theory explain motivation?

The Equity Theory of Motivation deals with the way people compare the value of themselves to others in similar work situations based on their inputs and outputs. ... The theory assumes that people's motivation in an organization is based on the desire to be treated equally and fairly.

What are the elements of equity?

Four components that are included in the shareholders' equity calculation are outstanding shares, additional paid-in capital, retained earnings, and treasury stock. If shareholders' equity is positive, a company has enough assets to pay its liabilities; if it's negative, a company's liabilities surpass its assets.

How does equity theory affect the performance of employees?

Equity theory can be a model for measuring how satisfied an employee is in their job. ... But, what an employee thinks of their current input-output balance can change day-to-day if they think one of their colleagues currently has a better balance between what they give and what they get back.

Which theory is content theory?

Content theory is a subset of motivational theories that try to define what motivates people. Content theories of motivation often describe a system of needs that motivate peoples' actions.

What is content theory example?

The most common examples of content theories are Maslow's hierarchy of needs, Alderfer's ERG model, Herzberg's two-factor model, and McClelland's need for achievement, affiliation, and power. Content theories argue that we direct and sustain our behaviour towards meeting unmet needs.

Which is the process theory?

A process theory is a system of ideas that explains how an entity changes and develops. ... While process theories focus on how something happens, variance theories focus on why something happens. Examples of process theories include evolution by natural selection, continental drift and the nitrogen cycle.

What is equity theory in compensation?

Equity Theory: According to this theory, there should be equity or the uniformity in the pay structure of an employee's remuneration. If the employee feels he is not being paid fairly for the amount of work he does in a day will result in lower productivity, increased turnover and high absenteeism.

What are the types of process theories?

There are four major process theories: (1) operant conditioning, (2) equity, (3) goal, and (4) expectancy.

What are the 3 theories of motivation?

Three Main Theories on Motivation are 1. Optimal-level Theory, 2. Psychoanalytic Theory 3. Humanistic Theory!