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Implementation of the equity theory in a workplace offers numerous opportunities to the employees and.
Definition equity theory in business. The theory helps explain why your employees motivation levels can go up and down at work. Equity is one of those words in property investment that is bandied about by many yet understood by relatively few. As we ve talked about many times here at brighthr your business needs motivated staff to operate at its full capacity. It is the difference between what your business is worth your assets minus what you owe on it your debts and liabilities.
In business psychology equity theory comes under the umbrella of organisational justice which is concerned with employee perceptions of a company s internal and external behaviour and how these perceptions fuel or change their own attitudes and behaviour. Concept that people derive job satisfaction and motivation by comparing their efforts inputs and income outputs with those of the other people in the same or other firms. Equity assets liabilities. Equity theory popularly known as adam s equity theory aims to strike a balance between an employee s input and output in a workplace.
In a business setting the relevant dyadic relationship is that between employee and employer. Equity theory is based in the idea that individuals are motivated by fairness and if they identify inequities in the input or output ratios of themselves and their referent group they will seek. Equity theory is a concept belonging to john s. Adams a behavioural psychologist.
In other words an employee gets de motivated by the job and his employer in case his inputs are more than the outputs. For small business owners the definition of equity is simple. The adam s equity theory posits that people maintain a fair relationship between the performance and rewards in comparison to others. If the employee is able to find his or her right balance it would lead to a more productive relationship with the management.
They believe that they have a bright future over here and they are thus eager to claim.
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