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What is "Equity Theory"?i need to know any effectiv eapplicationof this theory.

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mahtab58 | Student, Undergraduate | eNotes Newbie

Posted April 28, 2009 at 12:39 PM via web

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What is "Equity Theory"?

i need to know any effectiv eapplicationof this theory.

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Michelle Ossa | College Teacher | (Level 3) Educator Emeritus

Posted April 29, 2009 at 3:31 AM (Answer #1)

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When it comes to organizations, equity measures whether the services and resources within the organization are being distributed fairly among its participants, or whether a parent organization is equally giving benefit to its subsidiaries and dividing the shares equally among those who are a part of it.

For instance, Company X receives dividents from profits and they are partaken by its beneficiaries. Company Z might receive less dividents from the same profits and the beneficiaries will not be equally rewarded.

It is also an important factor with motivation and how an organization performs proportionally to how it is being rewarded.

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