Question

Serena and Norah are colleagues in an advertising firm. Norah has the same qualifications as Serena and puts in more visible effort into her work than her colleague. However, Norah finds out that Serena earns more than her and also gets better increments. This knowledge highly demotivates Norah and her productivity reduces drastically. This scenario is reflective of the assumptions of _____.

Answer 1

Answer:

The equity theory.

Explanation:

The equity theory focuses on whether the distribution of resources, salary, whatever is being distributed, is fair to the number of people working for it (at the same level or position). In this case, Serena and Norah are colleagues. For less work, Serena earns more which, in turn, makes Norah reduce her productivity. If this advertising firm paid every employee on the same level, Serena and Norah would earn the same for the same amount of work.