Jason Alaniz owns and operates a small industrial supply company. Alaniz uses a merit pay system to reward employees, but high performing employees do not feel satisfied. They complain that they do not receive enough merit pay given how well they perform. The employees' complaints illustrate which theory?

Question

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The employees' complaints illustrate the equity theory, which suggests that individuals are motivated by fairness, and if they perceive an inequity in how rewards are distributed, such as not receiving enough merit pay for their performance, they will be dissatisfied. This theory is concerned with the fairness and equity of the reward distribution process.

Jason Alaniz Owns and Operates a Small Industrial Supply Company