Equity theory proposes that employees are motivated when their perceived inputs equal outputs.

Question

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Equity theory suggests that employees are motivated when they feel that their inputs (such as effort, skills, and experience) are fairly recognized and compensated by their outputs (such as salary, benefits, and recognition). This means that employees should feel that they are getting as much as they are giving, in comparison to other employees or to their own expectations. If employees feel that they are over-rewarded or under-rewarded compared to others, they may experience feelings of guilt, resentment, or injustice, which can reduce their motivation and job satisfaction. Therefore, equity theory emphasizes the importance of fairness and transparency in the employment relationship, as well as the need for managers to communicate effectively with their employees and to ask for their feedback and suggestions.

Equity Theory Proposes That Employees Are Motivated When Their Perceived