Question

In your own words, describe inequity theory. In your opinion, what is an example of a way to correct inequity tension? Use an example.

Answer 1

Theory of inequity was presented by Adam and he described the existence of inequity when the person perceives that the ratio of his results and input or efforts applied by him is less than the ratio of the results and input or efforts applied by the other person.

This inequality can result when the person who compares the ratio is in direct exchange relationship and they both have an exchange relationship with the other person.

In order to reduce the inequity tension, it is important for the manager to offer a similar type of reward for a similar type of job.

Example- ABC organization has two individual X and Y. Both are working in the same position but there is a variation in the salary and reward =s provided to both the individual. This resulted in dissatisfaction in X who receives lower salaries and rewards then Y. In order to overcome this issue, the management decides that the employees who are working at the same job level will get the same rewards and compensation This type of equity in rewards and compensation helped X to reduce the inequity tension.