Inequity

• Inequity exists when workerís outcome/input ratio is not equal to referent.

  • Underpayment inequity: ratio is less than the referent. Worker feels they are not getting the outcomes they should given inputs.
  • Overpayment inequity: ratio is higher than the referent. Worker feels they are getting more outcomes then they should given inputs.
• Restoring Equity: Inequity creates tension in workers to restore equity.

  In underpayment, workers reduce input levels to correct.
  
  Overpayment, worker can change the referent to adjust.

• If inequity persists, worker will often leave the firm.

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