In this formula Op divided by ip re

In this formula Op divided by ip refers to the ratio of a person's outcomes to inputs while the divided by Io refers to the outcomes to inputs ratio of others. A state of equity exists when the two ratios are essentially equal. But this state of equity can be destroyed by changing any of the four values. For example, you could feel underpaid because your outcomes were decreased ("my shift differential was eliminated) because your inputs were increased have to travel further to get to the workplace"), because the outcomes of others were increased ("Sam got a production bonus"), or because the inputs of others were decreased (Sam’s new machine is easier to operate than mine)A state of inequity exists whenever the two ratios are unequal; this inequity can be caused either ratio being greater than the other. In other words, inequity can exist because people are either overpaid or underpaid. The available research suggests that people are more easily upset by underpayment than by overpayment Therefore, people are more willing to accept overpayment in a social exchange than underpayment. Nevertheless, according to Equity Theory both conditions of inequity motivate individuals to establish a more equitable Exchange.Consequences of inequity: When a perceived state of equity exists individuals tend to feel satisfied and report that the conditions are fair. When a perceived condition of over reward exists, however, individuals tend to feel guilt and dissatisfied, and they are motivated to correct the imbalance. Likewise, when a perceived state of under reward exists, individuals tend to feel dissatisfied and angry, and again, they are motivated to do something about it. According to Equity Theory a perceived state of inequity creates tension within individuals and the tension is proportionate to the magnitude of the inequity.