Expectancy theory

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Expectancy theory is about choice. It explains the processes that an individual undergoes to make choices. In organizational behavior study, expectancy theory is a motivation theory first proposed by Victor Vroom of the Yale School of Management.

Expectancy theory predicts that employees in an organization will be motivated when they believe that:

putting in more effort will yield better job performance
better job performance will lead to organizational rewards, such as an increase in salary or benefits
these predicted organizational rewards are valued by the employee in question.

Vroom's theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and minimize pain. Together with Edward Lawler and Lyman Porter, Vroom suggested that the relationship between people's behavior at work and their goals was not as simple as was first imagined by other scientists. Vroom realized that an employee's performance is based on individual factors such as personality, skills, knowledge, experience and abilities.

Victor H. Vroom introduces three variables within the expectancy theory which are valence (V), expectancy (E) and instrumentality (I). The three elements are important behind choosing one element over another because they are clearly defined : effort-performance expectancy(E>P expectancy), performance-outcome expectancy (P>O expectancy).

E>P expectancy: Our assessment of the probability our efforts will lead to the required performance level.

P>O expectancy: Our assessment of the probability our successful performance will lead to certain outcomes.

Vroom’s model is based on three concepts: ^[1]

1. Valence - Strength of an individual’s preference for a particular outcome. For the valence to be positive, the person must prefer attaining the outcome to not attaining it.
2. Instrumentality – Means of the first level outcome in obtaining the desired second level outcome; the degree to which a first level outcome will lead to the second level outcome.
3. Expectancy - Probability or strength of belief that a particular action will lead to a particular first level outcome.

Vroom says the product of these variables is the motivation.

In order to enhance the performance-outcome tie managers should use systems that tie rewards very closely to performance. In order to improve the effort-performance tie, managers should engage in training to improve their capabilities and improve their belief that added effort will in fact lead to better performance.