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:

Business Entity

An organization created by one or more individuals to engage in business activities, structured as corporations, partnerships, sole proprietorships, or other forms.

Borrowed Money

Funds that an individual or entity has received from another party under the condition that it is to be repaid, typically with interest, at a later date.

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Owners' Equity, depicting a company's financial position at a specific point in time.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.