Everyone in the workplace is motivated by something. This motivation could be external in nature, such a money, and status, or internal, such as a desire to do a good job. Equity Theory is based on the idea that individuals are motivated by fairness. In simple terms, equity theory states that if an individual identifies an inequity between themselves and a peer, they will adjust the work they do to make the situation more fair. An equity theory example is, if for example, an employee learns that a peer doing exactly the same job as them is earning more money, then they may choose to do less work, thus creating fairness in their eyes. Explain the role of referent groups in equity theory. Specifically, explain inside and outside referent groups and how they help us make decisions about equity.

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The Role of Referent Groups in Equity Theory In equity theory individuals compare their own inputs such as effort skills and time and outcomes such as ... View the full answer