Equity Theory

Equity theory has become one of the most widely accepted motivational theories and predictors of human behavior in the social sciences. It is based on a cornerstone of many international cultures—the expectation of individuals that they will be treated with “fairness” by others. According to equity theory, the accepted measure of “fairness” of treatment is the ratio of the rewards (outcomes) received over the efforts (inputs) of individuals—in comparison with other individuals in similar situations. Employees, for example, expect to be treated equitably, measured by their own rewards/efforts in comparison with the ratio of rewards/efforts of other employees, within an organization, as well as others who perform similar work in other organizations.