While it has been established that Equity Theory provides insight into scenarios of under-compensation, the theory has generally failed to demonstrate its usefulness in understanding scenarios of overcompensation.
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Affect plays this role in equity theory such that negative affective reactions act as a mediator between perceptions and actions, as emotional reactions to justice motivate individuals to take action to restore equity.
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Considered one of the justice theories, equity theory was first developed in the 1960s by J . Stacy Adams, a fairness maintained within the relationships of their co-workers and the organization.
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These psychological contracts can be impacted by many things like mutual or conflicting morals and values between employer and employee, external forces like the nudge theory, and relative forces like the Adams equity theory.
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Other psychologists have extended the equity theory, suggesting three behavioral response patterns to situations of perceived equity or inequity ( Huseman, Hatfield, & Mile, 1987; O'Neil & Mone 1998 ).
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