Equity sensitivity and outcome importance

Equity theory (Adams, 1963, 1965) is a common theory used to explain employee behavior. Four basic points capture the thrust of the theory. (a) Individuals evaluate their relationships with others (e.g. their employers) by assessing the ratio of the outcomes they receive in the relationship and the inputs to the relationship against the outcome/input ratio of a comparison other. (b) This comparison other may be a co-worker, a peer working for another employer, a collective other such as a composite standard based on peers or the industry averages, the employer as a whole, oneself in another social role such as a previous job, or some type of internal standard. (c) If the perceived outcome/input ratios of the individual and comparison other are perceived to be unequal, then inequity exists. (d) This inequity causes tension frustration of underreward or guilt of overreward. In simplest terms, equity theory proposes that when individuals feel inequitably rewarded, internal tension occurs and individuals will be motivated to take action to restore equity, thereby relieving the tension. Soon after its introduction by Adams, equity theory gained early support and research attention. Weick even went as far as to label it as being 'among the most useful middle-range theories of organizational behavior' (1966, p. 439). However, early equity theory research resulted in

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