HR Glossary

Equity theory

Equity theory refers to defining and measuring relational satisfaction of employees in a company.

what-is-equity-theory

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.

See TalentLyft in action

Applicant Tracking, Recruitment Marketing, Sourcing and Talent CRM software are powerful alone, but unstoppable when used together!

Related content

  • Affirmative Action

    Affirmative action is an HR policy which ensures equal employment opportunities and focuses on groups and minorities who tend to suffer from job discrimination.Affirmative action definitionAffirmative...

  • Blended workforce

    Blended workforce consists of a variety of employees on different types of contracts such as full-time staff, part-time employees, temporary employees, independent contractors and freelancers.Blended workforce...

  • Candidate

    Candidate is a job seeker who has been pre-qualified for a specific position or category of jobs and has been through the application processWhat's a candidate?A...

  • Competency Modeling

    Competency modeling is a framework for defining the skills, knowledge and behavior requirements of a job. Competency modeling definitionCompetency modeling is a framework for defining the skills,...

  • Developmental counseling

    Developmental counseling is a type of shared counseling where employers work together with employees to identify strengths and weaknesses, resolve performance-related problems and determine and create...

Explore more topics

  • Internal Recruitment

    Your organization's most valuable assets are the talents you already have. Maximize the potential of your existing workforce and learn how to use internal recruitment to build a stronger, more agile, and highly skilled team that's ready to tackle the future.

    Learn more

  • Recruitment by Industry

    Tailor your recruitment strategies to fit specific industries. Learn the unique challenges and best practices for hiring in sectors like healthcare, tech, retail, finance, and more. Discover industry-specific approaches to sourcing talent, crafting job descriptions, and optimizing your recruitment efforts for success.

    Learn more

  • Diversity Equity and Inclusion (DEI)

    Diversity, equity, and inclusion (DEI) have become key focuses in building a thriving workplace culture—and for good reason. In our DEI Hub, we provide strategies, insights, and best practices to help HR professionals, business leaders, and change-makers champion a more inclusive and equitable workforce. Join us in fostering diversity and empowering employees by exploring a wide range of DEI topics, from inclusive hiring practices to creating a workplace where all voices are heard and valued.

    Learn more

  • HR Software

    Let HR technology make your work life easier! Streamline your HR processes, from payroll and benefits to talent management and recruitment, with powerful HR software. Save time, reduce manual tasks, and focus on strategic initiatives by working smarter, not harder.

    Learn more

  • Sourcing Candidates

    Master the art of sourcing candidates with strategies that help you find and attract top talent. Learn how to leverage social media, job boards, networking, and recruitment tools to expand your talent pool. Improve your sourcing techniques to identify qualified candidates faster and build a strong, diverse pipeline for your hiring needs.

    Learn more

  • Resume Screening

    Streamline your hiring process with efficient resume screening techniques. Learn how to quickly identify top candidates by filtering through resumes for relevant skills, experience, and qualifications. Utilize tools and strategies to save time, reduce bias, and ensure you're shortlisting the best talent for the job.

    Learn more

Simple and affordable recruitment software

Schedule a Demo Start Free Trial