The Basic Principle of Equity Theory Is That Employees Try

question 53

Multiple Choice

The basic principle of equity theory is that employees try to

• A) maintain equity between inputs and outputs compared to people in similar positions.
• B) ensure that performance standards are fair and attainable.
• C) earn as much as possible with as little work as possible.
• D) achieve the mutually agreed upon goals of management and employees.

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Definitions:

Firm Division

A segment or branch of a firm that operates under the larger corporate umbrella, focusing on specific operational tasks or market sectors.

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Autonomy

The right or condition of self-governance, or the ability of an individual or organization to make their own decisions independently.

Cost Center

A division whose parent company rewards it for reducing the cost of producing a specified output.