Question Detail

IRP 321 Compensation Management policies Objective Question

Question

Which psychological theory of compensation is concerned with the perceptions people have about how they are treated in comparison with significant others, specifically focusing on inputs and outputs?
Options
A Expectancy Theory
B Instrumentality Theory
C Equity Theory
Correct Answer
D Edward Lawler's Model of Pay Satisfaction
Correct Answer

Option C is the correct answer.

Detailed Explanation

Page 14 describes Equity theory: 'Equity theory is concerned with the perceptions people have about how they are treated in comparison with significant others. It is concerned with inputs and outputs comparisons of significant others.'

Hint

This theory focuses on fairness and relative comparisons.

Question Info