Expectancy Theory

Would you feel more motivated if you got paid double your salary? Would you work harder if you got the chance to get more company benefits? Motivation in the workplace has been a tricky topic for many years, as managers have tried to find innovative ways to motivate their employees to work and perform better.

This quote from Victor Vroom is an excellent summary of his most famous work on motivation. In this explanation, we will look closely at his expectation theory, so keep on reading if you want to learn more about this thesis and how it can help you motivate people in the workplace.

Motivation Expectancy Theory

As motivation and expectancy are at the core of this explanation, let's start with a definition of these terms.

People have different goals in life and, therefore, have different motivations. Expectancy theory aims to define this relationship and help managers find ways to motivate their employees to work and improve their performance.

Rotter's Expectancy Theory

Julian B. Rotter's work had an essential role in behavioral study. In 1966, he developed the concept of locus of control, which is how a person perceives an outcome as the consequence of external factors or actions.³

As such, there are two types of loci of control:

• Internal locus of control: People tend to think that an outcome results from their actions.

• External locus of control: People tend to think that an outcome results from external factors independent of their actions.

Therefore, people with an internal locus of control will generally think they have more control over their lives and that their actions define who they are and directly impact their current situation. So, for example, someone with an internal locus of control who just filed for bankruptcy because their business failed would say: "it's my fault; I wasn't ready and didn't have the knowledge nor the skill to do it."

In contrast, people with an external locus of control think that their current situation results from external factors and that they have no control over it. So, for example, someone with an external locus of control who just filed for bankruptcy because their business failed would say: "There is nothing I could do; it's the financial crisis, and nobody has money to buy anything."

Vroom’s Expectancy Theory

Victor Vroom established the expectancy theory in 1964. He stated that people will act in a certain way because they expect a specific outcome and that the intensity of their work will depend on how desirable this outcome is for them. In a nutshell, people are motivated and work harder if they believe their efforts will help them achieve a specific goal and gain the reward they want.

There are three fundamental principles to Vroom's expectancy theory:

• Expectancy: It's the individual's belief that they can reach a particular target or achieve a specific goal if they put more effort into a task.

• Instrumentality: It's the individual's expectation that they will be rewarded if they reach a particular target or achieve a specific goal.

• Valence: It's how valuable a reward is for someone.

Let's have a closer look at each component:

Expectancy

It is the first element of Vroom's expectancy theory.

Managers can implement expectancy theory in the workplace, but they must ensure that the employees believe they can achieve a specific goal if they work on a task. Furthermore, they must think that the more they work, the more chance they have to achieve their target.

Management must ensure employees have the proper knowledge, training, and resources to achieve their tasks.

Instrumentality

The second element of expectancy theory is instrumentality.

As mentioned earlier, the expectation is that the organization will reward the employee if they achieve a target. It means that the company must ensure that the employees receive what they are promised; otherwise, the employees won't trust it in the future. To be effective, it is therefore preferable that companies have established and communicated their rewards policy.

Valence

The last element of expectancy theory is the most important one. As mentioned earlier, Valence is how vital the reward is for the employee; it's how they perceive it. If the reward the employee gets is not appropriate, employees won't be motivated to work hard to get it.

For example, some employees will be interested in recognition; in contrast, others will be more interested in monetary prizes. That's why it's vital for managers to understand what employees value the most.

Outcome Expectancy Theory

This theory can be extremely valuable for managers if they apply it properly, as it can drastically improve the employee's productivity and overall Job Satisfaction.

When managers understand what truly motivates their employees and can convince them that their performance will be rewarded by what they seek, they can accomplish great things.

You can use the following formula to calculate the expectancy theory's outcome:

\[ Expectancy (E) * Instrumentality (I) * Valence (V) = Motivation force \]

Expectancy Theory Example

Let's take a look at two practical examples of this theory.

A salesperson in a garage earns a minimum salary of $3,000 a month; however, he is incentivized to sell many cars as he gets a 20% commission on the dealership's profit for every car sale. If a car costs $20,000 to the dealership, and a salesperson can sell it at $30,000, then the salesperson will earn a $2,000 commission.

In this example, the salesperson is more interested in his commission than his base salary, as he can make much more money. Therefore, he will be much more motivated and incentivized to perform.

Advantages and Disadvantages

Although this theory is well-known all around the world, it is not a perfect one. Moreover, even if there are some great advantages, there are also significant disadvantages to consider when applying it:

Table. 1 - Advantages and disadvantages of the expectancy theory

As you can see, the expectancy theory is a great tool to improve employee productivity in the workplace. However, managers must use it cautiously as it can create tension or be less effective than expected.