The objective of this report is to outline the background to Victor H. Vrooms Expectancy Theory of Motivation, one of the most renowned theories published in relation to employee motivation and organisational behaviour. The report will also account for the application of this theory in an organisational setting. From here, a critical analysis of Vroom's theory will be conducted, in which credible academic sources will be used to form our analysis.
Vroom's expectancy theory was originally developed by Victor H. Vroom, a Canadian psychologist, in 1964. Vroom's expectancy theory consisted of two related models-the valence model and the force model. "The valence model attempts to capture the perceived attractiveness, or valence, of an outcome by aggregating the attractiveness of all associated resultant outcomes." (Geiger, 1996) "The force model of expectancy theory attempts to capture motivational force to act by associating the expectancy of resultant outcomes and their individual valences." (Geiger, 1996) These two models gave Vroom the opening to build his expectancy theory to the level that it is today most commonly known.
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Vroom's expectancy theory explains motivation in terms of four main concepts: force, valence, expectancy, and instrumentality. "Force refers to the compulsion of an individual to behave in a given way" (Arnold, 1998), "valence the preference for consequent reward" (Arnold, 1998), "expectancy the perceived likelihood that the behaviour will result in the intended outcome" (Arnold, 1998) and "instrumentality the perception that the intended outcome will lead to the consequent reward." (Arnold, 1998) Force is seen as the sum of the products of multiple valences, instrumentalities and expectancies involved in a course of action. It is reasoned that the motivation to behave in a particular way is determined by an individual's expectation that behaviour will lead to a particular outcome, multiplied by the preference or valence that person has for that outcome. This can be shown in the following mathematical equation: Motivation (M) = Instrumentality (I) x Expectancy (E) x Valence (V) (Liccione, 2007) it is assumed that the level of motivation an individual demonstrates, results from his or her conscious decision-making process: a rational assessment of the likely result of their behaviour. The theory also considers the value that each individual places on the estimated outcome. The basic theory recognises that individuals differ: that we are all unlikely to value the same outcome equally.
Vroom's expectancy theory differs from the content theories of Maslow (1943), Alderfer (1969), Herzberg (1959), and McClelland (1961). The fundamental difference is that Vroom's expectancy theory does not provide specific propositions on what motivates an organisation's members. Instead, Vroom's theory provides a process of cognitive variables that reflects individual differences in work motivation. From a management perspective, the expectancy theory has some important implications for motivating employees. It identifies several important things that can be done to motivate employees by varying the person's effort-to-performance expectancy, performance-to-reward expectancy, and reward valences. (Lunenburg, 2011). Vroom laid the conceptual foundation for expectancy in work-motivation theory. (Eden, 1988). "If a worker sees high productivity as a path leading to the attainment of one or more of his (or her) personal goals, he (or she) will tend to be a high producer." (Victor H. Vroom)
Vroom - Examination of the theory in practice
The idea that people will change their level of performance/effort put into their work if they feel that they will be rewarded accordingly can be applied to many different organisational situations. The theory states that employee effort will lead to performance and performance will lead to rewards. (Isaac, et al., 2001)
Intel is an example of an organisation that could be considered to follow the concept of Vroom's theory in that they seek to treat their employees in a positive and encouraging way, and therefore manage positive outcomes.
Intel is an international company that began in 1968 creating memory based products. By 1971 they introduced the first microprocessor. Figures show that in 2010 they employed 82,500 people worldwide and are one of the world's most admired employers. Intel has a strong focus on their employees. It can be argued that they have applied Vroom's expectancy through developing a program that's used to attract, retain and reward the people creating the company's long-term growth and profitability.
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Intel believes that to get results from employees they have to give their staff the necessary tools to perform. As the theory states there is a distinct correlation between effort and performance, if an employee believes that their efforts won't be rewarded then they are less likely to perform. (Kermally, 2005) According to the theory it's important to understand the level of the employee's ability, Intel acknowledges this and also that employees operate in a dynamic and fast changing environment. For those reasons, they developed an internal Intel university which provides a comprehensive development curriculum including new employee orientation and training programmes for current employees seeking to move up the ladder and benefit from a job promotion. The university offers employees the opportunity to up-skill throughout their time with the company, whether they want to develop their management skills, improve on IT skills or learning specific information about the company. The University online database contains the latest academic resources from leadership to technology.
Intel establishes the relationship between personal well-being and performance by providing staff the opportunity to attend personal development seminars. It is clear that employees will perform better when they feel better. Intel, like Vroom, sees the starting point of motivating employees begins with what they expect to get from their job. How does Intel encourage employee performance? According to Intel they see themselves as providing, 'excellent coverage and preventive care, proactive programs, and a range of fitness resources help keep our employees healthy and happy.' (Intel Inc., 2012) Intel takes the job satisfaction of their employees as a high priority, they have realised that there is a distinct link between job satisfaction and performance. They have integrated an employee discount program which offers employees discounts from participating hotels and restaurants. An on-site fully equipped gym also features in the Intel offices that employees can avail of whenever they wish to.
Intel acknowledges the efforts of their employees through the reward schemes they have set in place to give employees incentive to take advantage of the training available to reach performance goals within the workplace. According to Vrooms theory the level of performance a person applies to their work will equal desired outcomes, pay rewards, the opportunity for promotion or company perks. (Intel Inc., 2012) Intel have taken on board that rewarding employee behaviour helps to motivate employees therefore they developed their pay, stock and benefits scheme. Annual bonuses are paid out based on the employees "bonus target", which are specific amounts calculated from the individual's performance. (Intel Inc., 2012) The workforce is paid out an annual "multiplier bonus" which is determined by the overall success and achievement of the company as a whole throughout the year. The incentive of commission is an on-going motivator for certain employees. Employees are set a specific target to reach, once that target is satisfied the individual reaches a portion of the overall target due to their successful level of performance.
Intel offers their employees the opportunity to buy shares in the company at a lower price than market value. (Intel Inc., 2012) Similar to the bonus scheme this incentivises employees to work and perform better as the better the company as a whole do, the more shares they sell, and ultimately the employee will get a higher return on their shares. The profits the employee is helping the company achieve are returning to the employees own pocket.
The different motivational elements that Intel adopts from intrinsic factors, bonuses, to extrinsic factors, job satisfaction, they all have different values to the employee. Intel have noted that it's important to determine at the beginning of the employees career what it is in particular that the individual perceives as a suitable reward. Rewarding performance will influence performance level if the reward is effective in motivating the individual in the first place. Intel has created different links between performance and rewards for different employees depending on the skills they bring to the job and the level of their ability in achieving the task.
As it is key for the success of the business, Intel has linked the right motivational reward to the right employees to be able to maximise their profits. Employees will perform better when they feel they are receiving something in return for their efforts. (Isaac, et al., 2001) People will always put a value on money. The two aspects that Intel has adopted, bonuses and shares, satisfy employee's value for money.
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Intel's application of Vrooms theory in the workplace has a direct link to the success of the company over the years. Employees have become satisfied in their work environment and in the tasks they are asked to perform due to the motivation for managers and the incentive of rewards applied to the performance they achieve. Employee performance and the use of rewards within the company have led to increased profits throughout the years and an increase in the quality and standard of the work being produced.
Critical Analysis of Vroom's Expectancy Theory
Victor Vroom wrote the original expectancy theory in 1964. He identified three important expectations that individuals bring to the workplace;
That effort will lead to performance, performance will lead to a further outcome, and that each outcome is perceived to have a certain value (valence). (Morley, 2004)
An effective and simple description of how the theory works can be found in (Mullins, 2010)
"The theory is founded on the idea that people prefer certain outcomes from their behaviour over others. They anticipate feelings of satisfaction should the preferred outcome be achieved.
Much research has been done on this motivation theory and many have criticised it or attempted to improve on it. Many questions have been put forward about vroom's theory in practice. Edward E. conducted a study that put vroom's theory to the test;
"Job attitude and behaviour data were collected over the period of a year for 69 managers in a retail sales organization. Expectancy attitudes were found to be significantly related to some measures of effort and performance. However, weighting expectancy attitudes by valence measures did not increase the ability of expectancy attitudes to predict behaviour" (Edward, 1973) Edward E. is here challenging how Vroom uses valence in his expectancy theory.
Porter and Lawler (1968) extended the original expectancy theory. They also believe abilities and traits have a direct effect on performance rather than just effort on its own. Things such as natural intelligence, skills, knowledge training and personalities affect a person's ability to perform a task. For example a naturally intelligent person would require less effort than some other people in certain tasks. From Porter and Lawler's studies, initially their main focus was on pay. They believed that those who valued pay as a reward and tied it to their efforts put more effort into their work. Later they used further outcomes such as promotion and opportunities to use skills and abilities. (Miner, 2007).
They argue against Vroom's idea that, Motivation = effort performance expectancy x performance outcome expectancy x valence (Morley, 2004) by suggesting their model recognises that job satisfaction is more dependent upon performance, than performance is upon satisfaction. (Mullins, 2010)
In addition, Porter and Lawler draw an explicit difference between intrinsic and extrinsic rewards, (Morley, 2004)
Vroom said that "people value the potential rewards associated with an activity". Porter and Lawler did not think that this was enough. They felt that their idea offered more.
Porter and Lawler said that people "must also believe that they are capable of carrying out that activity successfully or that the rewards that they are being promised are actually going to materialise on completion of the task" (Morley, 2004)
This is a strong argument that Porter and Lawler put forward. Their work explaining this difference to Vroom's theory is worth analysis.
In Vroom's theory, perceived effort-reward probability is not stated. Porter and Lawler argue that without this, workers will not perform the tasks adequately as;
They do not believe in themselves that they can successfully complete the task and they do not believe that the rewards they have been promised will be received.
Porter and Lawler explained this further, when perceived effort-reward probability is low, the individual does not have confidence in their ability to carry out the tasks or they are not confident for some reason that the rewards for carrying out the tasks will be available once the required tasks are complete. ". (Morley, 2004)
They argue here that Vroom's theory is flawed because it does not state this fact, and without it we cannot conclude in what way the workers will act.
While, when the perceived effort-reward probability is high, then the individual has confidence in their ability to carry out the tasks and that the rewards will be available once the task has been completed. (Morley, 2004)
Unlike The Expectancy Theory of Vroom, the Goal-Setting Theory of Locke suggests that, it is not the outcomes and rewards of task performance that causes a person to put in effort, but rather the goal itself (Sullivan, 2010). For example, if a person is given a deadline to work towards, it will encourage them to put in effort to reach that deadline/goal. The difficulty of the goal and the persons commitment combined together, will determine the effort put in.
People who have difficult goals will perform better than those with easier goals because, in order to achieve the difficult goals, more effort will be required. In short, Locke believes that it is not the expected outcomes that cause good performance, it is actually the goals set by managers or individuals that cause them to work hard and perform well.
Vroom believes the performance of an individual is their job effort multiplied by ability. However, in 1970 Arvey and Dunnet argued that rather than a multiplicative relationship, an additive one between ability and expectancy is a better predictor of performance. Findings appeared to be inconsistent with the variable ability, so they decided to omit it and predict it from the motivational component of expectancy theory without using an ability measure. This provides far more consistent results. The effect of omitted ability should be borne in mind as more accurate findings on job experience are obtained (Chiang, 2006).
From the following report it is clear that Vrooms Expectancy Model although created back in 1964, stills features in today's society. It is a very popular process theory of motivation and is world famous and used by many multinational companies across the globe, just like Intel, which is described in great detail above. No theory however, is one hundred per cent perfect. Every theory will always be criticised by other theorists and even improved in some cases. Vroom has many critics of his original expectancy model and many theorists have attempted to expand it over the years, which are mentioned in the above critical analysis. Vrooms Theory has played an important role in management practice in the past, today in the 21st century and will also continue to do so in the future.