Equity theory proposes that perceptions of fairness directly affect worker motivation.

Question

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Equity theory suggests that individuals compare the rewards for their work with the rewards that others receive for similar work. If they perceive that their reward-to-effort ratio is lower than that of others, they may feel demotivated. On the other hand, if they perceive their reward-to-effort ratio as fair, they are likely to be motivated. Therefore, perceptions of fairness play a critical role in employee motivation, according to equity theory.

Equity Theory Proposes That Perceptions of Fairness Directly Affect Worker