Expectancy theory of performance management system

Performance management has been identified as a system that creates context for continuous monitoring and measuring activities of individual employees in a firm. Similarly it also measures the performance of the entire organization so that organisational goals are met in an effective manner (Lebas 1995). Expectancy theory is an essential theory that underlines the concept of performance management (Fletcher & Williams 1996; Steers et al. 2004).

Key elements of expectancy theory

Expectancy theory of performance management was proposed by Victor Vroom in 1965. According to him, individuals behave in a specific manner because they get motivated by the desirable outcome of such behaviour. Performance of an individual should always be aligned with organisational expectations regarding achievement of identified goals in future (Salaman et al. 2005). The motivation that influences individuals to behave in a particular manner over other forms of behaviour is their expectancy. This expectancy is regarding the effect of the selected behaviour (Oliver 1974 ; Salaman et al. 2005).

Expectancy is determined by individual belief that performance of a specific type of behaviour will certainly help the individual in attaining desired performance goals. Thus, this property helps individuals in determining if they have the required skill sets for accomplishing a work accurately. However, when performance goals are beyond the achievement, the corresponding motivation also declines.

Instrumentality is connected with the process of rewarding for desired performance outcome. Thus, individuals are motivated to perform works that would provide greater rewards after successful accomplishment. However, when the instrumentality or reward for a number of organisational performances is same, motivation to perform different kinds of work declines.

Valence is the significance of the reward individuals get for exhibiting desired performances. Thus, individuals evaluate the rewards given to them for performance based on various aspects. This includes differential needs, values, goals and sources of motivation. On the basis of valence the motivations to accomplish different tasks also vary (Burgoon 1993; Kroth 2007). Thus, while deciding to perform in a particular way, individuals give importance to the variable that has the greatest motivational force.

Expectancey theory

Application of expectancy theory

Expectancy theory is applied practically in almost all types of organisations. This is primarily used in all aspects of employment relationship with the main focus on monitoring employee performance (Eisenberger et al. 1990). Implementation of expectancy theory is seen in organisational processes such as recruitment and selection of employees for a particular job. Similarly, it is also used in order to analyse the outcome of organisation training and assessment of employee performance as per organisational goals (Hillman & Dalziel 2003; Noe 1986; Rynes et al. 1980).

On the other hand this theory is also applied to identify the variables that motivate individual employees in the organisation. Specifically, in case of recruitment and selection of employees, this theory helps in determining the motivators that influence people to join an organisation based on needs, goals and past experiences.

In case of assessment of organisational performance, this theory works towards interpreting the specific behaviour that the employees exhibit based on their individual expectancy calculations. Here it needs mentioning that expectancy theory also postulates that different people want different things from their organisation. This range from good salary to job security to scopes for professional enrichment.

Consequently, this theory helps to map behavioural outcome in respect of organisational training. In other words this theory helps in identifying specific determiners behind a particular behavioural outcome of individual trainees (Lunenburg 2011).

Advantages of expectancy theory and the corresponding organisational impact

Expectancy theory is advantageous over other theories in a number of ways. For example, it helps in identifying self interested individuals in an organisation who are willing to perform at their best. These employees can achieve maximum job satisfaction if the right motivator is provided to them. Thus, the theory helps in interpreting individual psychologies. This in turn helps in recognising the individual motivators that influence people to make choices based on their specific expectations (Kanfer 1990; Ramlall 2004).

Moreover, this theory centres upon expectations of people and perceptions of the organisation about their corresponding organisational behaviour. Therefore, it helps in making individual employees aware about organisational behaviour and consequent expectations from the organisation. On the other hand, organisations are able to identify actual performance of their employees using this theory. So, this theory helps them in retaining employees who can add value to their firm by recognising their respective intrinsic and extrinsic motivators (Ramlall 2004 ; Samuel & Chipunza 2009).

Limitation of expectancy theory

Expectancy theory is often criticised for being too idealistic. The attributes for performance measurement in expectancy theory is motivation, employee effort, value of rewards, etc. However, these variables are quite difficult to measure. Hence, managers often need to incorporate additional performance measurement theories along with expectancy theory in order to measure and monitor individual performances (Parijat & Bagga 2014).

Moreover, as the model makes a hypothetical assumption that people are too rational and logical in calculating these variables. However, in reality the theory fails to provide specific solution to specific motivational problems. Secondly, involvement of a number of variables makes the theory complicated in nature. This not only makes it difficult to test the variables of employee motivation but also pose difficulty in implementing them in many situations (Parijat & Bagga 2014). Similarly, the implication of the multiplier effects of more than one motivator on employee performance cannot be accurately calculated Shermerhorn et al. (2002).

According to Robbins and Judge (2013), expectancy theory is more suitable than other theories like goal-setting theory in organisations which have proper infrastructure. In this case the infrastructure refers to the proper mechanism to measure the employee efforts, outcome and rewards. However, this theory might not prove as effective in other organisations where such an infrastructure is absent.


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Apara Bhattacharya
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