Expectancy theory is a motivation theory in organizational psychology which postulates that individuals can be motivated to adopt a specific behavior if they have certain expectations. This theory aims to explain the person's behavior at work and its correlation with his or her goals. Guided by self-interest, individuals adopt courses of action meant to maximize desirable outcome for their own benefit.
Expectancy theory is used to measure job satisfaction, occupational choice, the likelihood of staying in the same position and the likelihood of success. This model also helps managers realize that their employees are not naturally productive or nonproductive and enables them to establish a highly motivational working environment. According to the theory, workers' motivation can be increased via rewards and incentives. Hence, the theory is a method of maximizing satisfaction and minimizing dissatisfaction. It relies heavily on expectations and perceptions rather than measurable facts. The theory is praised for brining to the fore the role of rewards and pay-offs.
Expectancy theory was first used to explain organizational behavior by an American business school professor, Victor Vroom, in his book Work and Motivation (1964). His motivational model was distinctly different from previously developed concepts in organizational psychology. In particular, Abraham Maslow and Frederick Herzberg discussed how internal needs and resultant efforts are closely related. In his A Theory of Human Motivation (1943), Maslow elaborated on a hierarchy of needs, often portrayed in the shape of a pyramid with the most fundamental levels of needs at the bottom, and the need for self-actualization at the top. Herzberg proposed the Motivation-Hygiene Theory, also known as the Two Factor Theory (1959) of job satisfaction. According to his findings, people are influenced by two sets of factors: motivation factors, including achievement and recognition; and hygiene factors, such as pay and benefits, supervision and job security.
Unlike preceding motivation theories, Vroom's expectancy theory identified the outcome rather than needs as a major factor in motivation. Vroom found out that motivation is predetermined by individual factors – skills, knowledge, experience and abilities. The elements contributing to the employee's motivation are as follows: positive correlation between efforts and performance; performance leads to reward; the reward satisfies important needs.
Vroom built his theory on three variables: Valence, Expectancy and Instrumentality. These variables interact psychologically in line with Vroom's formula: Motivation = Valence x Expectancy (Instrumentality). Expectancy describes the relationship between efforts and performance. It stands for the belief that efforts result in the achievement of the desired goals. One's past experience, confidence, and the perceived level of difficulty of the goal, are prerequisites for expectancy.
Instrumentality concerns the relationship between performance and reward. It is the individual's belief that he or she will be rewarded in case of meeting the desired performance goal. The achievement of the goal may be rewarded by a pay raise, promotion or sense of accomplishment. However, rewards have to be used wisely, as when all performances are rewarded, instrumentality can be low. Valence is the value the person attributes to the rewards. The individual's valence is closely related to his or her values, needs, goals, preferences and sources of motivation.
Building upon Vroom's model, Lawler and Porter developed a new expectancy theory model in Managerial Attitudes and Performance (1968), discovering additional aspects of expectancy theory. Influenced by Maslow's idea of the importance of needs for motivation, they held the view that each person has a stable set of preferences over time. Lawler and Porter also categorized rewards as intrinsic and extrinsic. While intrinsic rewards are the sense of achievement, extrinsic rewards translate into bonuses and pay raises.
W.F. Maloney and J.M. McFillen (1986) carried out research into the application of the expectancy theory model as regards the motivation of construction workers. According to their definition, worker expectancy means the good match between the employee and the tasks. Worker instrumentality means the worker's awareness that any improvement in his or her performance would result in achievement of the goal.
Some criticize expectancy theory for being too simplistic while other scholars argue that few individuals see clearly the correlation between performance and rewards. Furthermore, many organizations do not establish a direct link between performance and rewards. Although Human Resource experts have welcomed the recommendations of expectancy theory, analysts criticize it for laying a strong emphasis on extrinsic awards.