Equity theory provides several insights for managerial applications to everyday
ID: 3467278 • Letter: E
Question
Equity theory provides several insights for managerial applications to everyday situations in the workplace. Which of the following statements is not true in this regard?
a. People tend to take a multifaceted view of the rewards they receive from the organization b. The basis for organizational rewards should be clearly communicated to employees c. People base their experience of equity on their perceptions, not on reality d. Formal and informal organizational rewards are equally observable to individuals when formulating equity perceptions e. Employees' perceptions may differ from the manager's perceptions
Explanation / Answer
Ans. (c) People base their experience of equity on their perceptions, not on reality
Equity Theory of motivation was developed by J. Stacey Adams in the early 1960’s.Equity Theory demonstrates that one's perception is relative to their own reality. According to the Equity Theory, motivation can be affected by an individual's perception of fair treatment in social exchanges. When compared to other people, individuals want to be compensated fairly for the contributions that they have made as per their expectations and beliefs. This perception and beliefs about what is fair and what is unfair are likely to affect their motivation, attitudes, and behaviours. For example, highly paid professional college teachers can go on strike when others feel it is not proper. Similarly, highly paid actors feel they are not fairly compensated compared to their fellow actors.
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