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The Equity Theory States That Individuals Judge Fairness in Compensation

question 47

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The equity theory states that individuals judge fairness in compensation by comparing their inputs and outcomes against the inputs and outcomes of referent others.

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Definitions:

Complementary Resources

Resources or assets that, when combined, enhance the value or performance of each other within a product or service.

Book Values

The net value of a company's assets as recorded on the balance sheet, often differing from market value.

Market Values

The current price at which an asset or security can be bought or sold in the marketplace.

Incremental Cash Flows

Additional cash flow received by an organization from taking on a new project.

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