Which of the following observations is true about the equity theory?
A)It suggests that managers compare the performance of employees with their potential to improve.
B)It suggests that employees' performance should be evaluated based on their developmental needs.
C)It suggests that internal equity pay comparisons focus on what employees in other organizations are paid for doing the same general job.
D)It suggests that when a person's outcome-input ratio is greater than the comparison other's ratio,underreward inequity is perceived.
E)It suggests that people evaluate the fairness of their situations by comparing them with those of other people.

Question

Quizplus · Accepted Answer

The equity theory suggests that people evaluate the fairness of their situations by comparing them with those of other people. It asserts that individuals perceive fairness based on a comparison of the ratio of their own outcomes to inputs with the ratio of others' outcomes to inputs. If the ratio is perceived to be unequal, a sense of inequity arises. Therefore, option E is the correct observation about the equity theory.

Which of the Following Observations Is True About the Equity