You graduated from college two years ago and began working at Hampstead Electronics. You have received good performance evaluations and a raise. You just found out that your organization has hired a recent college graduate with no experience at a higher salary than you are now making. You consider this an unfair act and resolve to do something about it. Which of the following theories best describes such a situation?

Question

BlackTom AI · Accepted Answer

The scenario presents a worker who notices a newer employee earning more despite less experience and feels this is unfair, which triggers considerations about fairness in social exchanges. 
Option A: Self-determination theory. This theory focuses on intrinsic motivation and the basic psychological needs for autonomy, competence, and relatedness. While these needs can affect motivation, the core issue described here is perceived fairness in pay relative to others, not the satisfaction of autonomous motivation or basic psychological needs. So this option doesn’t best capture the described situation.
Option B: Goal-setting theory. This theory emphasizes how specific, challenging goals and feedback influence performance. Although fair pay can influence motivation toward goals, the question centers on perceived inequity rather than the mechanics of setting and pursuing goals. Therefore this option is not the best fit for describing the scenario.
Option C: Equity theory. Equity theory concerns how individuals assess fairness by comparing their input-output ratios to those of others. When a comparison reveals inequity (e.g., a newer hire earns more for similar or fewer inputs), feelings of unfairness and motivational responses like seeking change or remediation arise. This directly matches the situation described.
Option D: Maslow's Hierarchy of Needs theory. Maslow’s model arranges needs from physiological up to self-actualization, but it doesn’t specifically address relational fairness in compensation comparisons between coworkers. The scenario is better explained by a fairness/mutual-exchange lens than by a hierarchical needs perspective.
Option E: Expectancy Theory. This theory ties effort, performance, and outcome expectations to motivation, but it centers on beliefs about performance and rewards rather than perceived inequity between coworkers’ pay for similar contributions. It explains motivation to perform rather than reactions to pay inequity.
In summary, the core element in the scenario is perceived inequity between how much one earns relative to a comparable coworker, which is the central idea of equity theory. The other theories address motivation, needs, goals, or expectancy in related but not primary ways to this specific situation.

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