Equity Theory How do you know if you are fairly paid compensated at work Perceived outcomes what we get from a job in relation to what we put into it In relation to a comparable other Formula Your outcomes divided by your inputs If the ratio equals one state of equity exists If the ratio is less than one state of negative inequity exists If the ratio is greater than one state of positive inequity exists Equity Theory continued Psychological states Equity Comfortable and satisfied Negative inequity Anger frustration Motivated to reduce the inequity how Positive inequity Obligation to repay Motivated to reduce the inequity how Levels of Equity Sensitivity Equity sensitives Prefer that their outcome input ratios be equal to comparison others and that the ratio is equal to 1 Benevolents Prefer that their outcome input ratios be less than comparison others and that their ratio is less than one Entitleds Prefer that their outcome input ratios exceed those of comparison others and their ratio is greater than one Survey calculation Sum 1b 2a 3b 4a 5b Less than 29 entitleds 29 32 equity sensitives above 32 benevolents Equity Theory Predictions Salary Piece rate Underpaid Overpaid Quality Quality Quantity Quantity Quality Quantity Quality Quantity Aaron Feuerstein Malden Mills How would you describe his approach to managing his company What might his critics say about his approach What might his supporters say What is his perspective on layoffs Do you think his approach is successful What specifically supports your argument Equity Theory Malden Mills How might equity theory help to explain the success Feuerstein has achieved at Malden Mills
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