Saturday, November 18, 2006

Equity Theory

J Stacy Adams's Equity Theory

Equity Theory in business seeks to describe a relationship between employees motivation and their perception of being treated fairly. The theory suggests that employees seek to ascribe values to their inputs and outputs.

- How much people are willing to contribute depends on how fair they think they are being treated.

- Comparison of input-output ratio

- Rewards should be distributed on the basis of performance