Expectancy theory was developed by Victor H Vroom. It is based on the notion that human behaviour depends on people’s expectations concerning their ability to perform tasks and to receive desired rewards.
The expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of the outcome to the individual. It includes three variables which Vroom refers to as:
1. Valance:
Valance means the strength of an individual’s preference for a particular outcome. A valance of zero occurs when the individual is indifferent towards the outcome. The valance is negative when the individual prefers not attaining the outcome rather than attaining it.
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2. Instrumentality:
Instrumentality refers to the relationship between performance and reward. It refers to a degree to which a first level outcome (e.g. superior performance) will lead to a desired second level outcome (e.g. promotion).
If people perceive that their performance is adequately rewarded, the perceived instrumentality will be positive. On the other hand, if they perceive that performance does not make any difference to their rewards, the instrumentality will be low.
3. Expectancy:
People have expectancies about the likelihood that an action or effort on their part will lead to the intended performance.
Workers will be motivated by the belief that their performance will ultimately lead to higher pay for them. Expectancy is the probability that a particular action will lead to a particular first level outcome.
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To conclude, Vroom emphasises the importance of individual perceptions and assessments of organisational behaviour.
The key to “expectancy” theory is the “understanding of an individual’s goals”-and the linkage between “effort” and “performance”, between “performance” and “rewards” and between “rewards” and “individual-goal satisfaction”.
It is a contingency model, which recognises that there is universal method of motivating people.