In the reading "Equity Theory and Research: An Overview" by Elaine Hatfield, she explains about the four propositions the equity theory is based upon. She explains that the first proposition is where individuals try to maximize their outcomes. For example, an employer may pay it's employees much less that they deserve which results in greater profits for that individual and maybe not thinking of the consequences this may bring, such as workers going on strike which then results in no production and no profit for that individual. So the employer has to be sure to know what they are doing and be careful not to tread too hard as they may step on the wrong person's foot. The next proposition explains how groups of people or the individuals in a group adapt to accepted systems which then will induce members to adhere to these systems so they can maximize their rewards not just for themselves but also for the group.
Actors' Equity Association
Sepia photograph of the "Atlas" statue in New York...
English: This logo is owned by JMI Equity.In proposition number three Hatfield talks about when individuals find themselves in inequitable relationships, they become distressed and agitated with mental conflict. The last proposition explains how these individuals try to relieve this distress and restore equity by rewarding themselves or each other in some way to make them feel better about their relationship.
In the next section Hatfield explains whether a relationship is equitable and who decides this. Hatfield believes the decision is put on the shoulders of the observers on the outside looking in on the relationship. These people look out the pros and cons of the relationship to see if both partners are putting an equal amount of time and effort into their partnership. If this is true then these observers believe the relationship can work, but their are many different observers that think differently...