Equity theory is the principle that when jobs are distinctly different but entail similar levels of ability, responsibility, skills, and working conditions, they are of equal value and should have the same pay scale.

True

False

True

Explanation:

The equity theory was developed by Stacy Adams in 1965. It deals with how the employees feel about their jobs and if they believe they are being paid fairly. It states that employees believe that different jobs that require similar skills, abilities, responsibilities and working conditions, should be paid the same amount. If employees believe that they are not being paid fairly, they will lose motivation and their productivity will lower to match the corresponding salary. In other words, if an employee believes he is not getting paid enough for his work, will start to work less to match the actual payment.