Final answer:
Equity Theory describes how employees compare the fairness of their work rewards about others, which can influence their job satisfaction and performance.
Step-by-step explanation:
The theory when an employee's ratio of "outcomes" to "inputs" is compared to those of some "comparison other" is known as Equity Theory. This theory suggests that individuals assess the fairness of their work rewards relative to the rewards of others by comparing their ratio of inputs, such as effort, education, and experience, to outputs, such as salary, recognition, and benefits. Equity theory posits that when employees perceive inequality, they may experience feelings of distress which can lead to attempts to restore equity either by adjusting their inputs or the outputs they receive.