The Application of the Equity Theory in the Compensation Management

In this competitive era, compensation should not only be the payment that the enterprise gives the staff's cost in order to obtain their service, but should be the main factor to arouse the staff's enthusiasm, initiative and creativity in order to attract and detain the talents. This article discusses the unfair reasons of the compensation management, points out the measures that the equity theory should adopt to stimulate the staff's enthusiasm, and finally draws the conclusion that it is the fundamental purpose of compensation management to let the staff to be satisfied with salary, and make them work better for the company.