Definitions for "Equity theory"
the theory holding that people are happiest with relationships in which the rewards and costs a person experiences and the contributions he or she makes to the relationship are roughly equal to the rewards, costs, and contributions of the other person
this view of motivation focuses on the comparison processes people utilize to assess whether their rewards equate with their inputs. It encourages the consideration of what social comparisons are operating. Equity theory suggests that individuals strive towards equity, where inputs and outputs are deemed to be fair. Equity theory also explores how individuals react to conditions of over- and underpayment.
The theory that people are most satisfied in a relationship when the ratio between rewards and costs is similar for both partners.
J Stacy Adams, in his work on compensation asserted that employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others.