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ACCA Applied Knowledge · Business and Technology · Individual and group behaviour in business organisations

Ravi and Tom do the same job at the same grade. Ravi learns that Tom earns more for the same effort and output, and Ravi begins to work less hard. Which theory best explains his behaviour?

Adams' equity theory best explains it. Ravi compares his ratio of inputs to rewards with Tom's, perceives unfairness because Tom is paid more for equal effort, and restores balance by reducing his own effort.

  1. AAdams' equity theoryCorrect
  2. BMaslow's hierarchy of needs
  3. CHerzberg's two-factor theory
  4. DTaylor's scientific management

Explanation

Ravi compares his input-to-reward ratio with Tom's and perceives inequity, so he restores balance by reducing effort. This is Adams' equity theory. Herzberg would treat pay as a hygiene factor but does not model comparison with others, and Maslow and Taylor do not address perceived fairness in this way.

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