Equity theory, Financial Management

Assignment Help:

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.


Related Discussions:- Equity theory

Assignmebt solution, Select a company (excluding finance sector) of Bursa M...

Select a company (excluding finance sector) of Bursa Malaysia (www.bursamalaysia.com). Analyse and comment on the liquidity and profitability performance of the selected company fr

Define leverage, Q. Define leverage? Meaning of Leverage: - The diction...

Q. Define leverage? Meaning of Leverage: - The dictionary significance of the term leverage refers to 'an increased means of accomplishing some purpose'. For instance leverage

What is the optimal amount of risky assets, Consider a world with two asset...

Consider a world with two assets: a riskless asset paying a zero interest rate, and a risky asset whose return r can take values +10% or -8% with equal probability. An individual h

Estimate the average beta of investment in the t-bills, You know that Treas...

You know that Treasury bills have a beta of 0 because they are risk-free.  A portfolio of technology stocks has a beta of 3.  You plan to invest 40% of your investment capital in T

Payout policy, mini-case chapter 15:payout policy Megginson, Smart, Graham

mini-case chapter 15:payout policy Megginson, Smart, Graham

Exchange requirements-, Exchange Requirements To ensure money supply, s...

Exchange Requirements To ensure money supply, some central banks require some or all of its foreign exchange receipts (generally from exports) be exchanged for the local curren

Calculate the cost of capital of organization, The following particulars re...

The following particulars relate to ABC Ltd. at the end of 2008: (i)  Rs. 500,000 equity shares of Rs. 10 each. Present dividend per share is Rs. 15; Market price Rs. 100 per sh

Determine how you will finance your balance sheet, Project your company's i...

Project your company's income statement and assets for five years. Identify your assumptions for major categories. Determine how you will finance your balance sheet (long-term de

Funds management, who are the participants in the hedge funds industries

who are the participants in the hedge funds industries

Beta, what is the value of beta for this fund ? If the benchmark index for ...

what is the value of beta for this fund ? If the benchmark index for this mutual fund increased by 11.00% during the period covered by beta measure, what was the rate of return for

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd