According to equity theory, employees compare the rewards they receive from their organization with the contributions they make toward their organization. This comparison is known as the _____.
A) receivables turnover ratio
B) outcome/input ratio
C) interest coverage ratio
D) debt/asset ratio

Question

Quizplus · Accepted Answer

Equity theory proposes that employees compare the ratio of the outcomes or rewards received from their organization (such as pay, recognition, benefits) to the inputs or contributions they make (such as effort, skills, time). This ratio is known as the outcome/input ratio, and if it is perceived as unfair compared to that of others, it can lead to feelings of under- or over-reward and affect motivation and commitment. The other options (A, C, D) refer to financial ratios that are used to assess a company's performance, liquidity, and solvency, but they are not directly related to equity theory.

According to Equity Theory, Employees Compare the Rewards They Receive