Equity Theory

What is Equal Equity Theory?

 

‘Equity Theory’ states that employees try to maintain a balance between what they give to the company versus what they receive in return, and their overall satisfaction with the job is defined by this perceived balance.

 

Equity Theory was introduced in the 1960s by psychologist John Adams. He also clarified that the input doesn’t necessarily mean the work done as well as the output doesn’t always mean the remuneration of the job.

 

The inputs for the employee might mean a variety of things like their time, efforts, personal skills, loyalty, trust, etc. Similarly, the outcomes might include salary, job satisfaction, security, benefits, reputation, etc.

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