Expectancy theory, equity theory, and agency theory each attempt to explain the behavior and motivation of employees and how these impact compensation decisions. HR professionals, and the companies they work for, can use this knowledge to generate policies and programs to meet the motivational needs of their workers. In this Assignment, you will examine the three theories of compensation and how these apply in practice. In addition, you will determine if the theories can be used simultaneously to drive compensation decisions.

To complete this Assignment respond to the following bullet points in a 3- to 4-page paper:

  • Explain the three theories of compensation: Reinforcement and expectancy theory, agency theory, and equity theory.
  • Describe how these theories apply in practice.
  • Could these theories be applied simultaneously or are they too diverse and must be applied individually?

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