- Workers will naturally compare their efforts or rewards to those of others in the workplace.
- The degree of equity in an organisation is based on the ratio of inputs (contributions made by the employee) to outcomes (financial and non-financial rewards).
Degrees of equity
Equity norm: workers expect an equitable remuneration for their contribution in their jobs.
Social comparison: workers determine what is fair based on comparisons of their inputs and outcomes with those of their peers.
Cognitive distortions: workers who feel undercompensated become demotivated so might withdraw any goodwill, resulting in altering their effort or outputs.
Drawbacks
- Equity is subjective.
- Some people may be more sensitive to equity.
- Neglects to include demographic, psychological, and cultural variables.
- Scale of equity can only be so useful.