Equity theory suggests that managers should:
A) avoid transparency in pay practices.
B) strive to pay all employees equitably.
C) use pay scales as a bludgeon to keep employees in line.
D) use overpayment to increase long-run performance.

Question

Quizplus · Accepted Answer

Equity theory suggests that employees should receive fair and equitable pay for their work in comparison to their peers. Therefore, managers should strive to pay all employees equitably, rather than using pay scales as a bludgeon to control them or overpaying them to increase long-run performance. Transparency in pay practices can also be valuable in promoting a sense of trust and fairness among employees.

Equity Theory Suggests That Managers Should