According to equity theory, when an employee perceives that his or her own outcome–
input ratio is greater than that of a referent, underpayment inequity has occurred.
FALSE
Equity exists when a person perceives his or her own outcome-input ratio to be equal to a
referent’s outcome-input ratio. Under conditions of equity, if a referent receives more
outcomes than you receive, the referent contributes proportionally more inputs to the
organization, so his/her outcome-input ratio still equals your ratio.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 09-02 Describe from the perspectives of expectancy theory and equity theory what managers should
do to have a highly motivated workforce.
Topic: Equity Theory
When people experience overpayment inequity, equity can be restored by perceiving the
referent’s inputs to be lower or the referent’s outcomes to be higher than one originally
thought.
TRUE
When people experience overpayment inequity, equity can be restored by perceiving the
referent’s inputs to be lower or the referent’s outcomes to be higher than one originally
thought.
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 09-02 Describe from the perspectives of expectancy theory and equity theory what managers should