Glossary   >  Equity Theory

Equity Theory

Equity theory at the workplace states that employees wish to maintain a fair ratio between their input (performance) and the received output (rewards and compensation) compared to the others. If there is a difference or if it is found that the employee’s inputs are greater than the outputs, it leads to their demotivation. Whereas, if the ratio is comparatively similar, the employee seems to be satisfied.

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