In equity theory,when an employee perceives that his/her own outcome-input ratio is greater than that of a referent,underpayment inequity has occurred.

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Equity exists when a person perceives his/her own outcome-input ratio to be equal to a referent's outcome-input ratio.Under conditions of equity,if a referent receives more outcomes than you receive,the referent contributes proportionally more inputs to the organization,so his/her outcome-input ratio still equals your ratio.

In Equity Theory,when an Employee Perceives That His/her Own Outcome-Input