As per the _____ theory,relative pay is important as employees evaluate their pay-effort balance in comparison to other employees.
A) equity
B) expectancy
C) agency
D) reinforcement

Question

Quizplus · Accepted Answer

The equity theory suggests that employees evaluate their pay in relation to the pay of their peers or colleagues. If they feel that their pay is not equitable or fair in comparison to others, they may become demotivated and dissatisfied with their job. Therefore, relative pay is important to employees as they assess their pay-effort balance in comparison to others. Expectancy theory suggests that employees are motivated by the belief that their efforts will lead to better performance and outcomes. Agency theory is concerned with the relationship between principals and agents, while reinforcement theory suggests that behavior is shaped by its consequences. None of these theories directly address the importance of relative pay.

As Per the _____ Theory,relative Pay Is Important as Employees