Answer to Question #10828 in Finance for Sag e Raza

Question

what is interpersonal equity? what is its definition?

Answer 1

Partners’ Interpersonal Equity (PIE). This is an important elaboration on the matter of fairness—something which makes or breaks many partnerships. PIE includes an examination of what each partner plans on contributing to the business, such as money, expertise, reputation, and clients. It’s never as simple as money, though money is important. Also important are indirect compensation, time off, titles and positions, power, control and authority, and freedom to travel or the freedom not to travel. What the partners will receive from one another is definitely worth including, such as trust and cooperation, recognition, predictability, and a positive attitude. It is crucial to know what your partners value—and give them as much of what they value as possible—because a positive sense of interpersonal equity is motivating. A feeling that one’s partners are getting more out of the partnership leads to what we call partnership distress syndrome. Remember, when it comes to fairness and PIE, it’s the partners’ perceptions of what everyone is putting in and taking out that’s paramount, not necessarily the reality.