What Is Equity Theory and How Can It Be Used

question 4

Essay

What is equity theory and how can it be used to understand the following: a) fairness, b) relational satisfaction, c) financial resources, and d) consequences of being underbenefitted.

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Definitions:

Population Means

The average value of a particular characteristic for all the individuals within a population.

Pooled Variance

A method used to estimate the variance of two or more different samples that assume the underlying population variances are equal.

Sample Variances

A measure of variance calculated from a sample of a population, used to estimate the variance of the entire population.

Starting Salaries

The initial compensation offered to an individual when they begin a new role or job; often analyzed in studies concerning labor economics.