The Equity theory refers to a social exchange Theory that asserts that people seek and are most satisfied with an interpersonal relationship when their own benefits/costs ratio equals their partner's benefits/costs ratio.
The Equity theory refers to the theory which holds that people are happiest with relationships in which the rewards and costs a person experiences and the contributions he or she makes to the relationship are roughly equal to the rewards, costs, and contributions of the other person. In Industrial ad Organizational Psychology, Equity theory is defined as theory of job satisfaction stating that employees will be satisfied if their ratio of effort to reward is similar to that of other employees. This theory was developed to help formalize the idea of perceived fairness or balance in interpersonal, including close dyadic relationships. An equitable relationship is one in which both partners perceive that they are receiving relatively equal outcomes