An employee's assessment of the fairness of his or her compensation, based on the amount received, is based on equity theory.

Question

Quizplus · Accepted Answer

Equity theory proposes that employees compare their inputs (e.g. effort, skills) and outcomes (e.g. compensation, rewards) to that of others in similar positions. If they perceive themselves as receiving less than others, they may feel unfairly treated, leading to lower job satisfaction and motivation. Thus, an employee's assessment of the fairness of his or her compensation is based on equity theory.

An Employee's Assessment of the Fairness of His or Her