Explain equity theory, and discuss how managers can use this model to help motivate workers. Give an example from your own experience of an inequitable situation, and use it to illustrate how people react to such circumstances.
What will be an ideal response?
Equity theory suggests that people look at the ratio of their outcomes to inputs and compare it to the ratio between a comparable other's outcomes to inputs. They make a judgment about the fairness of the situation from this analysis.
Managers should treat employees fairly as these employees are more likely to support organizational change, more apt to cooperate in group settings, and less apt to turn to arbitration and the courts to remedy real or imagined wrongs.
The students should give examples from their own experiences about an inequitable situation. Among the actions people take here include: They will reduce their inputs, they will try to change the outputs or rewards they receive, they will distort the inequity, they will change the object of comparison, or they will leave the situation.
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