Which theory argues that the strength of our tendency to act a certain way depends on the strength of our expectation of a given outcome and its attractiveness?

Learning Outcomes

• Describe the ways in which managers can use expectancy theory to motivate employees

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• Learning Outcomes
• Practice Question
• ASMO in Japan
• Contribute!
• Advantages of the Expectancy Theory
• Limitations of the Expectancy Theory
• Implications of the Expectancy Theory
• Authorship/Referencing - About the Author(s)

Expectancy theory, initially put forward by Victor Vroom at the Yale School of Management, suggests that behavior is motivated by anticipated results or consequences. Vroom proposed that a person decides to behave in a certain way based on the expected result of the chosen behavior. For example, people will be willing to work harder if they think the extra effort will be rewarded.

In essence, individuals make choices based on estimates of how well the expected results of a given behavior are going to match up with or eventually lead to the desired results. This process begins in childhood and continues throughout a person’s life. Expectancy theory has three components: expectancy, instrumentality, and valence.

• Expectancy is the individual’s belief that effort will lead to the intended performance goals. Expectancy describes the person’s belief that “I can do this.” Usually, this belief is based on an individual’s past experience, self-confidence, and the perceived difficulty of the performance standard or goal. Factors associated with the individual’s expectancy perception are competence, goal difficulty, and control.
• Instrumentality is the belief that a person will receive a desired outcome if the performance expectation is met. Instrumentality reflects the person’s belief that, “If I accomplish this, I will get that.” The desired outcome may come in the form of a pay increase, promotion, recognition, or sense of accomplishment. Having clear policies in place—preferably spelled out in a contract—guarantees that the reward will be delivered if the agreed-upon performance is met. Instrumentality is low when the outcome is vague or uncertain, or if the outcome is the same for all possible levels of performance.
• Valence is the unique value an individual places on a particular outcome. Valence captures the fact that “I find this particular outcome desirable because I’m me.” Factors associated with the individual’s valence are needs, goals, preferences, values, sources of motivation, and the strength of an individual’s preference for a particular outcome. An outcome that one employee finds motivating and desirable—such as a bonus or pay raise—may not be motivating and desirable to another (who may, for example, prefer greater recognition or more flexible working hours).

Expectancy theory, when properly followed, can help managers understand how individuals are motivated to choose among various behavioral alternatives. To enhance the connection between performance and outcomes, managers should use systems that tie rewards very closely to performance. They can also use training to help employees improve their abilities and believe that added effort will, in fact, lead to better performance.

Practice Question

It’s important to understand that expectancy theory can run aground if managers interpret it too simplistically. Vroom’s theory entails more than just the assumption that people will work harder if they think the effort will be rewarded. The reward needs to be meaningful and take valence into account. Valence has a significant cultural as well as personal dimension, as illustrated by the following case.

ASMO in Japan

When Japanese motor company ASMO opened a plant in the U.S., it brought with it a large Japanese workforce but hired American managers to oversee operations. The managers, thinking to motivate their workers with a reward system, initiated a costly employee-of-the-month program that included free parking and other perks.

However, the program was a huge flop, and participation was disappointingly low. Why?

The program required employees to nominate their coworkers to be considered for the award. Japanese culture values modesty, teamwork, and conformity, and to be put forward or singled out for being special is considered inappropriate and even shameful. To be named Employee of the Month would be a very great embarrassment indeed—not at all the reward that management assumed. Especially as companies become more culturally diverse, the lesson is that managers need to get to know their employees and their needs—their unique valences—if they want to understand what makes them feel motivated, happy, and valued.

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The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and Herzberg.

The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual.

The Expectancy theory states that employee’s motivation is an outcome of:

1. how much an individual wants a reward (Valence),
2. the assessment that the likelihood that the effort will lead to expected performance (Expectancy) and
3. the belief that the performance will lead to reward (Instrumentality).

1. In short, Valence is the significance associated by an individual about the expected outcome. It is an expected and not the actual satisfaction that an employee expects to receive after achieving the goals.
2. Expectancy is the faith that better efforts will result in better performance. Expectancy is influenced by factors such as possession of appropriate skills for performing the job, availability of right resources, availability of crucial information and getting the required support for completing the job.
3. Instrumentality is the faith that if you perform well, then a valid outcome will be there. Instrumentality is affected by factors such as believe in the people who decide who receives what outcome, the simplicity of the process deciding who gets what outcome, and clarity of relationship between performance and outcomes.

Thus, the expectancy theory concentrates on the following three relationships:

• Effort-performance relationship: What is the likelihood that the individual’s effort be recognized in his performance appraisal?
• Performance-reward relationship: It talks about the extent to which the employee believes that getting a good performance appraisal leads to organizational rewards.
• Rewards-personal goals relationship: It is all about the attractiveness or appeal of the potential reward to the individual.

Vroom was of view that employees consciously decide whether to perform or not at the job. This decision solely depended on the employee’s motivation level which in turn depends on three factors of expectancy, valence and instrumentality.

Advantages of the Expectancy Theory

• It is based on self-interest individual who want to achieve maximum satisfaction and who wants to minimize dissatisfaction.
• This theory stresses upon the expectations and perception; what is real and actual is immaterial.
• It emphasizes on rewards or pay-offs.
• It focuses on psychological extravagance where final objective of individual is to attain maximum pleasure and least pain.

Limitations of the Expectancy Theory

• The expectancy theory seems to be idealistic because quite a few individuals perceive high degree correlation between performance and rewards.
• The application of this theory is limited as reward is not directly correlated with performance in many organizations. It is related to other parameters also such as position, effort, responsibility, education, etc.

Implications of the Expectancy Theory

• The managers can correlate the preferred outcomes to the aimed performance levels.
• The managers must ensure that the employees can achieve the aimed performance levels.
• The deserving employees must be rewarded for their exceptional performance.
• The reward system must be fair and just in an organization.
• Organizations must design interesting, dynamic and challenging jobs.
• The employee’s motivation level should be continually assessed through various techniques such as questionnaire, personal interviews, etc.

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