Expectancy Theory of Motivation
One process model of motivation, expectancy theory, will be discussed and applied in the context of compensation because it is the most useful (or practical) in understanding the relationship between compensation, rewards, and motivation. This discussion has been part of the book up to the 6th edition, but removed because some reviewers considered it as a repetition of material covered in OB courses. We offer it here as a supplement to show how Expectancy Theory applies specifically to the HR field.
The Expectancy Theory Model of Motivation
The expectancy theory model of motivation is probably the most practical and powerful tool for human resource managers to demonstrate to other managers the importance of all human resource functions in creating a motivating environment.1 If the expectancy theory model is operationalized and followed in an organization, there is a strong probability that its employees will be highly motivated. The theory even allows managers to use numbers to determine the strength of the motivation of their employees, although this is rarely done. The expectancy model discussed here was developed by Porter and Lawler (1973).
At the heart of the model are three components, as shown in Figure 1: the effort-performance probability (EP), the performance-outcome probability (PO), and the value of an outcome (V). Expectancy suggests that an employee’s productivity ultimately depends on his or her answers to three questions:
1. Given your abilities, experiences, self-confidence, and your understanding of your supervisor’s expectations, on a scale of zero to one, what is the probability—your gut feeling—that your effort will result in a superior performance? (Can I do it?)
2. On a scale from zero to one, how sure are you that when you do a good job your boss will reward you? (What is in it for me?)
3. Of what value is the outcome to you? (How much do I want it?)
The complete model is shown in Figure 2. Effort-performance probability (EP) is the likelihood that an employee’s effort results in high performance. If the employee is not prepared, has not understood the explanations regarding expectations, and has low self-confidence, his or her estimation of the probability to perform well will be low (e.g., .1 or .2). A more experienced employee may feel a probability of .5 or .6 in succeeding, and a highly skilled, experienced, self-confident employee will be quite optimistic in succeeding, say .8 or .9, or will be absolutely sure: 1.0.
Performance-outcome probability (PO) is the likelihood—as perceived by the employee—that a high performance will be rewarded. The linkage between performance and outcome (rewards) has to be made clear to the employee. This is the responsibility of the manager.
The value of an outcome or reward (V) is more difficult to measure. It would be easy if only money were involved—for example, bonuses or pay raises—but many outcomes are intangibles, such as praise, recognition, and intrinsic rewards, or have value beyond money, such as promotion, more vacation time, or a dinner with the boss. The value of an outcome is determined on a scale from –1 to +1 and is based on the personal preferences of each employee. A younger employee, for example, may value money (.9), may not care as much about a pension plan (.2), and may dislike a transfer to headquarters (-.6) (the minus sign is a reminder that job outcomes can be negative, that is, be demotivators). An older employee may have quite different preferences: .4 for money, .8 for a pension plan, and .7 for a transfer.
Of more practical importance to managers are the three other components of the expectancy model: ability, role clarity, and equity (boxes A, B, and C in Figure 2). Ability refers to the personal characteristics the employee brings to the job. It also symbolizes one of the most crucial decisions a manager must make: hiring the right person...
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