Final answer:
Equity Theory suggests that motivation is fueled by the balance between employees' inputs and outcomes, compared to others. Self-efficacy and efficiency wage theory are related concepts affecting motivation and productivity, linking pay and belief in abilities to motivational levels.
Step-by-step explanation:
The theory that employees are motivated when the ratio of their perceived outcomes to inputs is at least roughly equal to that of other referent individuals is known as Equity Theory.
According to Equity Theory, employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others. This balance of input and output could be in terms of effort, compensation, recognition, and a number of other factors. Equity Theory posits that individuals who perceive themselves as either under-rewarded or over-rewarded will experience distress, which they will attempt to eliminate by altering inputs, outcomes, or perceptions of others.
Self-efficacy is also a related concept which refers to an individual's belief in their capability to complete tasks and achieve goals. The efficiency wage theory similarly touches on motivation by suggesting that higher pay can lead to higher productivity as employees recognize the value of their current job and strive to maintain it.