Wednesday, January 9, 2013

Expectancy-Value Theory: Connecting Expectations to Rewards

As employees scramble over each other in an attempt to achieve the next promotion, or trinket of acknowledgement, it is important to understand precisely how their expectations lead to motivation. Expectancy-Value Theory is one way of looking at how employees value the behavioral options available to them.  In this theory, management should tie behavior and reward closely together if there is an expectation that employees will be motivated and productive.  Management has an ethical opportunity to ensure proper returns on investments and progressive use of human capital in order to fulfill their function.

The concepts of valence and expectancy make up the bulk of the Expectancy-Value Theory.  In general, employees believe that when they put forth a specific amount of effort there should be an appropriate reward that is offered. If the expected energy and the value of the reward are not in alignment it will be difficult for management to solicit certain types of motivated behavior.

Valence and expectancies make up the bulk of Vroom's Value-Expectancy Theory and are further defined as the following: 

1.) Valence: The desired outcome of working at a particular level.

2.) Expectancies: The subjective expectation that such action will lead to a particular reward.

Vroom defines valence as, "the affective orientation toward particular outcomes" (1964, pp. 15). Those positive outcomes an employee desires to achieve are called positively valent while those things which an employee desires to avoid are negatively valent. It does not matter much what the true worth of these positive or negative factors are but only that they have a subjective perceptual value to employees.

It is not enough for a person to think in terms of the value of objectives but also the likelihood of achieving those objectives. For example, if an employee believes there is a high likelihood of achieve a particular objective after a defined amount of effort is put forth motivation is more likely. If this association of effort and reward is lower, motivation is less likely. Such expectancies are often denoted in numbers and range from .00 (low) to 1.0 (high).

In general, employees continually scan their environment in an effort to judge the value combinations of potential valences and expectancies. Alternatives come and go and employees do not always maintain orderings throughout their time of employment (Behling & Starke, 1973). The ordering of valences and expectancies can be seen as Sum (EijVj).  Someone who prefers a specific expectancy and valence combination is said to prefer Sum(EijVj)1 over Sum(EijVj)2  This would mean they prefer a particular course of action based upon the value of expectancy and the likelihood of its valence. 

We might be able to break this into an appropriate example. An employee has an option to put effort towards 1.) obtain a raise; or 2.) obtain a promotion without a raise. Option 1 could be denoted as Sum(EijVj)1 and option 2 can be denoted as Sum(EijVj)2. The employee makes the decision that the particular value combination of option 1 is worth more than option 2. The employee is most likely to put his effort toward the higher income.

Researchers can often use these short denotations to help them categorize and keep track of certain options over others. It is such understandings and choices, from the perspective of the employee, that often leads to an approach in workplace behavior based upon the value ordering of these particular choices.  As employees move through these choices they will often ignore or forget older orderings as they become less available.

. . . most decisions are made in sequential fashion. Thus, having chosen y over X and then, z over y, one is typically committed to z and may not even compare it with x, which has already been eliminated. Furthermore, in many choice situations the eliminated alternative is no longer available, so there is no way of finding out whether our preferences are transitive or not. These considerations suggest that in actual decisions, as well as in laboratory experiments, people are likely to overlook their own intransitivities. Transitivity, however, is one of the basic and the most compelling principles of rational behavior (Tversky, 47, p. 45).

Unfortunately, many employees cannot formalize these values in their minds and this can cause confusion. At times it is beneficial for managers to ensure that the actions that lead to rewards are clearly defined for employees in order to help them make these values more solidified. This is one of the reasons why workplace expectations and the rewards should be transparent and clear for employees in order to build develop appropriate behavioral options.

Furthermore, understanding what employees value in terms of potential outcomes within the workplace will lead to a greater understanding of the motivational potentials of employee behavior. It should be kept in mind that management should ensure that the performance expectations are solidified through formal corporate literature, management behavior, and compensation structures. When there is confusion between the expectancies and their potential outcomes this lowers the total likelihood that certain behaviors will be exhibited. Poor performance is a direct result of poor management communication.

Behling, O. & Starke, F. (1973). The postulates of expectancy theory. Academy of Management Journal, 16 (3).

Tversky. A. (1969) Intransitivity of Preferences. Psychological Review, 76, pp.31-48.

Vroom, V. H. (1964). Work and Motivation. New York: Wiiey.

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