Equity theory, Financial Management

Equity Theory

This theory proposes that individuals measure their out- comes/input ratio. Equity theory distinguish that inspiration is not the outcome of an absolute calculation but is a relative calculation. If they calculate that others are getting more outcomes (salary, success) for the same input (effort) they perceive in equality. When people perceive an imbalance in their out- come/input ratio, tension is build up which gives a basis for motivation as people strive for perceived equity and fairness. Based on equity theory in conditions of perceived inequity employees can be predicted to make one of various choices. They can change their inputs (decrease effort), they can change their output (increase productivity), or reframe the conditions (distorting perceptions by changing referent other). Equity theory is not restricted to finance. It has been shown that job titles as well as office space and selection for project groups may also function as outcomes for some employees in their equity equation.

Posted Date: 10/16/2012 6:14:36 AM | Location : United States







Related Discussions:- Equity theory, Assignment Help, Ask Question on Equity theory, Get Answer, Expert's Help, Equity theory Discussions

Write discussion on Equity theory
Your posts are moderated
Related Questions

Correlation Among Stock Index Returns Correlation among stock Index Returns can be defined as the extent to which the values of different types of investments move in tandem wi

Question : (a) A project must have a useful purpose. Therefore, as a project is evaluated, the team should determine the requirements of the local community and industry. These

List the arguments (variables) of which a FX call or put option model price is a function.  How does the call and put premium change with respect to a change in the arguments?

Describe the major financial problems of a firm The three questions posed above cover between them the major financial problems of a firm. Or we can say that financial manageme

Types of Treasury Bills Treasury bills are issued at various maturities, generally up to one year. Thus, they are useful in managing short-term liquidity. At present, the GOI (

I am facing some problems in my assignment of Portfolio Management. Can anybody suggest me the proper explanation for it?

CONCEPTS OF WORKING CAPITAL There are two concepts of Working Capital - Net working capital and Gross Working capital. 1. Gross Working Capital Gross Working capital re

Briefly examine the significance of identification of investment opportunities in capital budgeting process

Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee