Equity theory
- Content Team
- April 1, 2024
Applicant Tracking, Recruitment Marketing, Sourcing and Talent CRM software are powerful alone, but unstoppable when used together!
Equity theory refers to defining and measuring relational satisfaction of employees in a company.
Equity theory definition
Equity theory refers to defining and measuring relational satisfaction of employees in a company. It inspects employees’ satisfaction based on the balance between what they give to the company against what they receive.
Inputs: time, effort, loyalty, commitment, reliability, integrity, tolerance, enthusiasm, skill etc
Outputs: pay, bonus, perks,j ob security, benefits, sense of achievement, praise, reputation, responsibility etc.
Stages of equity
1. Equity tension: when the employee’s output to input ratio is lower than the employer’s ratio, so he/she feels under-rewarded and demotivated.
2. Perfect equity: when the Output-Input ratio is equal.
3. Equity tension: when the employee’s ratio is greater than the referents’ ratio so he/she feels over-rewarded.
Applicant Tracking, Recruitment Marketing, Sourcing and Talent CRM software are powerful alone, but unstoppable when used together!