Monday, 12 January 2015

Equity theory

Equity theory

  • Individual compare their job inputs and outcomes with those of others and then respond to eliminate any inequities.
  • E.g. Suyash :
    • Campus placement : 9.8 lakh/pa
    • 12 months 10,000/per month increment
    • New manager 11 lakh/pa
  • Social comparison
  • Employee make comparison of their job inputs (i.e. effort, experience, education, competence) and outcome (i.e. salary levels, raises, recognition) relative to those of others.
  • We perceive what we get from a job situation (outcome) in relation to what we put into it (inputs)and then
  • We compare our outcome-input ratio with the outcome-input ratio of others.
  • The referent that an employee selects adds to the complexity of equity theory

  • There are four referent comparisons that an employee can use:

    • Self-inside: an employee’s experience in a different position inside his or her current organization
    • Self-outside: an employee’s experience in situation or position outside his or her current organization.
    • Others-inside: other individuals or group of individuals inside the employee’s organization
    • Others outside: another individual or group of individuals outside the employee organization
  • Employee might compare themselves of friends, neighbors, coworkers or colleagues in other organizations or compare their present job with past jobs.
  • Both men-women prefer same-sex comparisons
  • Women are typically less paid to than men are.
(Ref: Organization Behavior- S.P.Robbins) 



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