Research has shown that people are more satisfied at work if they are treated fairly (compared to similar other people). This concept is often called the justice or equity theory. The concept basically states that employees are also motivated if they think or feel that everyone is treated equally or fairly. The comparison that people make can be between themselves and the organisation.
Psychologically, employees make comparisons with other people and they evaluate their outcome (how much they get from a job) such as recognition or pay with their input (contribution) such as their time, energy or skills. These comparisons are made, and if the difference between the input and outcome in comparison to others is high, then the employee is more motivated to balance this inequity or make the conditions fairer.
For example, if an employee feels that they are putting in more effort, but gaining less recognition in comparison to other people, then they have more of a motivation to restore this inequity. This might be done by exerting less effort into tasks, claiming wages, or even leaving. Knowing which strategy an individual will choose to restore this inequity is not possible, and neither is knowing which person the employee is making their comparisons too. The concept of fairness is very subjective and therefore it is very important for management to be sensitive to this issue, and there is a need to provide accurate information to employees concerning equity and fairness.