E

Expectancy Theory in Organizations (1964) theory posits that people will be motivated
to the degree that they believe that (1) effort will
Anna A. Filipova yield acceptable performance (expectancy),
Department of Public Administration, University (2) performance will be rewarded (force/instru-
of Wisconsin Oshkosh, Oshkosh, WI, USA mentality), and (3) the value of the rewards is
highly positive (valence). The interactive combi-
nation of all three influences motivation. The
Synonyms stronger the valence or value of the reward and
the stronger the expectancy that a person’s efforts
Ideal bureaucracy of organizational theory; will be successful and result in the reward, the
Instrumentality theory; Participative manage- stronger the motivational force to engage in that
ment; Path-goal theory behavior. Within the field of public administra-
tion, expectancy theory has been used as theoret-
ical framework for understanding topics, such as
Definitions motivation in public and private sector organiza-
tions, pay-for-performance and performance
People will be motivated to the degree that they appraisal, contracted provider motivation, free
believe that effort will yield acceptable perfor- rider problems, risk culture, and mission valence.
mance (expectancy), the performance will be
rewarded (force/instrumentality), and the value
of the rewards is highly positive (valence) Theoretical Perspectives
(Vroom 1964).
A person’s motivation is a function of effort-to- Vroom’s Theory of Work and Motivation
performance expectancies, performance-to- Vroom’s (1964) expectancy theory starts with the
outcome expectances, and perceived attractive- assumption that, at any given point in time, a
ness of outcome (Lawler 1981). person has preferences or “valence” among out-
comes or states of nature. As a basis for
establishing the valence of a specific outcome,
Introduction Vroom (1964, p. 17) sets forth the following prop-
osition: “The valence of an outcome to a person is
Expectancy theories gained popularity in the a monotonically increasing function of the alge-
1960s, 1970s, and 1980s (Vroom 1964; Porter braic sum of the products of the valences of all
and Lawler 1968; Lawler 1981). Victor Vroom’s other outcomes and his conceptions of its
# Springer International Publishing AG 2016
A. Farazmand (ed.), Global Encyclopedia of Public Administration, Public Policy, and Governance,
DOI 10.1007/978-3-319-31816-5_3002-1
2 Expectancy Theory in Organizations

instrumentality for the attainment of these other successfully the task is carried out” p. 23). “Abil-
outcomes.” Vroom specifically applies this first ities and traits” of a person and “role perceptions”
proposition to the topics of occupational choice (“the way in which the individual defines his job”
(calculation of the valence of an occupation), job p. 25) also have multiplicative relationships to
satisfaction (calculation of the valence of a job “effort” in determining “performance
held), and job performance (calculation of the (accomplishment)” (“a person’s accomplishment
valence of effective performance in a job held) on tasks that comprise the job” p. 28) (Porter and
(Miner 2002). Lawler 1968). Porter and Lawler also posit that to
Another central variable in the theory is the extent that performance does result in
“expectancy,” defined “. . .as a momentary belief “rewards” (“desirable states of affairs that a per-
concerning the likelihood that a particular act will son receives from either his own thinking or the
be followed by a particular outcome” (Vroom action of others” p. 29) and those “rewards” are
1964, p. 17). According to Vroom (1964), differ- perceived as “equitable rewards” (“the amount of
ences exist between the concepts of expectancy rewards that a person feels is fair, given his per-
and instrumentality. Expectancy is perceived as an formance on tasks he has been asked to undertake
action-outcome association, taking values from by the organization” p. 30) it would result in
0 (no probability that an act will be followed by “satisfaction” (“the extent to which rewards actu-
an outcome) to 1 (indicating certainty that this ally received meet or exceed the perceived equi-
would happen). In contrast, “instrumentality” is table level of rewards” p. 31). When “satisfaction”
an outcome-outcome association. It can take is experienced after receiving a reward, it tends to
values ranging from
1 (the second outcome influence future “value of the reward.” The nature
can be attained without the first outcome) to +1 of this effect varies with the reward.
(the first outcome is necessary and sufficient con- The authors conducted the most extensive
dition for the attainment of the second outcome). empirical study, using a sample of managers.
Expectances combine with total valence to Two changes were introduced in the model. The
yield a person’s motivation. Vroom (1964) uses first defined rewards as “extrinsic rewards”
the term “force” to describe this combination. (administered by the organization) and “intrinsic
“The force on a person to perform an act is a rewards” (administered by the individual himself)
monotonically increasing function of the alge- (p. 163). The second one linked “performance” to
braic sum of the products of the valences of all “perceived equitable rewards” (p. 164). The
outcomes and the strength of his experiences that results showed an inferential, but indirect, support
the act will be followed by the attainment of these for the causal relationships in the model. Specifi-
outcomes” (p. 18). People are expected to choose cally, (1) determinants of pay were more closely
rationally among action alternatives to maximize related to effort than to performance, (2) the rela-
force in a positive direction. tionship between determinants of pay and perfor-
mance was moderated by importance attached to
Porter and Lawler Theoretical Model pay, (3) the positive relationship between role
Porter and Lawler’s (1968) theoretical model perceptions and performance was greater for man-
holds that the variables “value of reward” (“how agers rated high on effort than those rated low in
attractive or desirable a potential outcome of an effort, and (4) the relationship between perfor-
individual’s behavior in the work situation” p. 18) mance and satisfaction with pay held only for
and “effort-reward probability” (“an individual’s managers for whom performance was related
perceptions of whether different rewards are directly to their actual pay (pp. 165–166).
based on differential amount of effort on his or
her part in the work situation” p. 21) when multi- Lawler’s Expectancy Theory Model
plied together are said to produce a third variable of Behavior
“effort” (“the energy expended to perform some Lawler’s (1981 pp. 21, 231 and 234) expectancy
task but does not necessarily correlate with how theory model posits that “a person’s motivation is
Expectancy Theory in Organizations 3

a function of: (a) effort-to-performance expectan- Motivation and Occupational Choice

cies; (b) performance-to-outcome expectances; in Public and Private Sector
and (c) perceived attractiveness of outcome.” In Organizations
this model, “effort-to-performance expectancy”
(E!P) refers to “. . .the person’s subjective prob- Motivation in Public and Private Sector
ability about the likelihood that he or she can Organizations in the United States
perform at a given level, or that effort on his or Public-private differences in work effort may exist
her part will lead to successful performance... because the two sectors differ in the rewards they
A person’s E!P probabilities are also strongly offer or the workers they attract. Private busi-
influenced by each situation and by previous nesses may be better structured to link external
experience in that and similar situations” motivators to individual productivity, but govern-
(p. 230). “Performance-to-outcome expectancy” ment work may be intrinsically more satisfying
(P!O) and valence (V) refers to “. . .a combina- (Frank and Lewis 2004). Jurkiewicz et al. (1998)
tion of a number of beliefs about what the out- challenged the perspective that public sector
comes of successful performance will be and the employees were more motivated by job security
value or attractiveness of these outcomes to the and stability, teamwork, and worthwhile service
individual. . .the more likely a person feels that to society, while eschewing monetary rewards,
performance will lead to valent outcomes, the prestige, the desire for challenge, and autonomy
more likely he or she will be to try to perform at as compared to private sector employees. The
the required level” (p. 232). Each outcome has its authors found that, in fact, monetary rewards and
own valence. Some outcomes are valent because need for security and stability were of much
they have direct value or attractiveness, others greater concern to public employees. However,
have valence because they lead to the attainment there were no significant differences between the
of other “second level” outcomes. Each outcome employees in the two sectors when it came to
may be intrinsic (e.g., feelings of accomplish- teamwork. The findings support the view that
ment, personal worth, etc.) or extrinsic, i.e., pos- environmental, societal, and economic pressures
itive or negative outcomes obtained from influenced the two sectors equally.
environment (e.g., supervisors, co-workers, the Using 1989 and 1998 data from the General
organization’s reward system, or other sources). Social Survey, Frank and Lewis (2004) found that
Motivation then is expressed as follows: M = private sector employees valued high income and
[E!P] X  [(P!O)(V)] (p. 231). The model advancement opportunities more—and interest-
further suggests that “. . .as a result of obtaining ing work, helping others, and being useful to
of outcomes and perceptions of the relative value society less—than public sector employees gen-
of the outcomes obtained, the individual has a erally. In both sectors, “an interesting job that
positive or negative affective response (a level of allows one to help others and a strong desire for
satisfaction or dissatisfaction) (p. 235). Further, job security appeared to increase the probability
“that events which occur influence future behav- that one will put in extra effort” (p. 46). The
ior by altering the E!P, P!O, and V perceptions. absence of sectoral differences in the motivational
This process is represented by the feedback loops effects of high pay and advancement opportuni-
running from actual behavior back to motivation” ties suggested either that “(a) the link between
(p. 215). performance and reward is not appreciably stron-
ger in the private than in the public sector,
(b) these extrinsic motivators have little impact
on work effort in either sector, or (c) these vari-
ables are measured too crudely in this study to
capture the size of their effects.” (p. 47). The
researchers conclude that higher pay and pay for
4 Expectancy Theory in Organizations

performance should have similar effects in the performance appraisal system, (c) pay increases
public as in the private sector. are based on measures of past performance, and
(d) the pay raise is built into base pay or is
Motivation in Public and Private Sector Global received as a one-time bonus” (Heneman and
Organizations Young 1991, p. 36). Due to the merit pay system’s
Georgellis et al. (2010) investigated whether shortcomings, in 1984, Congress created the Per-
intrinsic motivation affects the sorting of formance Management and Recognition System
employees between the private and the public (PMRS) (Pearce and Perry 1983). The PMRS had
sectors, paying particular attention to whether three components: “the annual comparability
extrinsic rewards crowd out intrinsic motivation. adjustment, based on private sector rates; the
Using the British Household Panel Survey longi- merit increase; and performance awards, which
tudinal data, the authors found that higher satis- are one-time awards not added to base pay”
faction with the nature of the work itself, the (Eisenberg and Ingraham 1993, p. 119). The leg-
proxy for intrinsic motivation, increased individ- islation prohibited the use of quotas to determine
uals’ propensity to make the transition from the the proportion of managers at each level, but
private into the public sector. In contrast, higher managers who received Fully Successful or
satisfaction with extrinsic job characteristics did higher ratings annually were to receive a merit
not raise the probability of such transition. The increase (Eisenberg and Ingraham 1993).
results suggest that individuals are attracted to the Several studies have investigated expectancy
public sector by the intrinsic rather than the extrin- theory within the specific context of PFP systems
sic rewards that the sector offers. Further, that with the goal of verifying its assumptions. For
extrinsic rewards in the public sector crowd out example, Pearce and Perry (1983) hypothesized
intrinsic motivation, in that, higher earnings and that the merit pay initiative of CSRA was expected
satisfaction with the extrinsic job characteristics to result in higher performance among federal
reduce individuals’ propensity to accept employ- managers than under the previous compensation
ment in the public sector. However, such evidence system. They analyzed data from employees in
was only found in the higher education sector and five federal agencies. The results indicated that
the National Health Service. Whether lower the performance appraisal system did not effec-
extrinsic rewards could increase the quality of tively measure performance, and therefore did not
job matches in the public sector, thus improving serve the purpose of the merit pay program to link
performance without the need for incentives was pay to performance. Other implementation con-
questioned. tingencies, such as the pay cap on managerial
salaries, uncertainties associated with the presi-
dential transition, and an eleventh-hour change
Pay-for-Performance and Performance in the merit formula had also contributed to the
Appraisal in Public Organizations ineffectiveness of merit pay. Although merit pay
was desirable in principle, its effectiveness might
Pay-for-Performance and Performance be severely constrained or negated within the
Appraisal in the US Public Organizations federal sector.
Beginning with the federal Civil Service Reform Perry et al. (1989)) analyzed the effectiveness
Act of 1978, academic and managerial attention of the PMRS using a sample of managers from the
have focused on pay-for-performance (PFP) com- US General Services Administration. The results
pensation as a method of increasing public indicated that PMRS had some positive effects on
employee productivity (Condrey and Kellough performance in 1986 but that they were substan-
1993). Merit pay, a dominant type of PFP pro- tially reduced in 1987. Specifically, the ability of
gram, had the following features: “(a) the focus is financial rewards to predict performance was sig-
on the individual performance, (b) performance is nificantly poorer in 1987 than in 1986. Among the
measured subjectively, such as through a factors contributing to this decline were
Expectancy Theory in Organizations 5

“. . .organizational learning, design factors associ- Kellough and Nigro (2002) conducted a study
ated with limits imposed by salary ranges, and on the effects of performance-related pay on the
declining validity of performance appraisals” motivation of the civil servants of the State of
(p. 35). They concluded that PMRS has not Georgia. A substantial majority of the respondents
achieved its ultimate objective, i.e., improving disagreed that the PFP system was a good way to
performance in the federal sector. motivate state employees; that their pay was based
Heneman and Young (1991) evaluated the on how well they did their job (and there was no
effects of a Merit Award Program on the motiva- significant difference between supervisors and
tion of 120 managers of schools in an American nonsupervisors); that their work was appraised
district. Results showed that the new merit pay fairly to exert the necessary level of effort; and
program did not motivate managers. This could be that state funding was made available to reward
explained, first, by the low expectancy percep- good performers with good pay increases. In addi-
tions of the administrators due to the vagueness tion, an often-cited concern about PFP system in
of the merit award criteria, supervisors’ expansive Georgia was its heavy reliance on monetary
span of control, supervisors lacking skills in eval- incentives rather than on other sources of motiva-
uating performance, and lack of initial communi- tion. These results demonstrate that the link
cation about the new program. Second, between performance-related pay and work moti-
instrumentality perceptions also were low due to vation was mostly negative and that favoritism
poor communication of the availability of awards, had undermined PFP in the agencies.
perceptions of the political nature of the awards
distribution, and the equity in the distribution. Pay-for-Performance and Performance
Third, valence perceptions also were low because Appraisal in Other Nations
an increment to base salary was more desirable Eisenberg and Ingraham (1993) evaluated the rel-
than winning a merit award, the size of the award ative effectiveness of several kinds of PFP plans
was perceived to be too small, and the valence of in several nations, including, Canada, Australia,
the merit award (whether won or not) was lowered Sweden, the Netherlands, and New Zealand.
because of its implications for the occurrence of Although they found substantial variation in the
other outcomes, such as embarrassment and social intent, design, and level of financial support in the
ostracism. PFP plans across nations, the commitment to PFP
Streib and Nigro (1995) explored the use of remained strong. The authors (1993, p. 127) sug-
PFP in local governments by presenting findings gest that the PFP system can work if the following
from a national survey of personnel directors in is present: “. . .an appraisal process that is per-
municipalities and counties. Most respondents ceived to be fair, a clear link between appraisal
viewed PFP as a useful tool, even though it was and pay, a level and combination of rewards that is
only used in minority of local governments. valued by public employees, and enough money
About half of managers perceived improvements to provide the necessary incentives on a predict-
in managerial control and a stronger relationship able basis. In addition, there must be a willingness
between rewards and performance. However, the on the part of all officials in the program (and in
majority expressed uncertainty when it comes to the political arena) to understand the intricacy and
satisfaction and group productivity. Uncertainty complexity of these systems and to give them a
was lowest for individual and organizational pro- grace period before judgments are made.”
ductivity. Some problems associated with PFP Marsden and Richardson (1994) studied the
included discriminating among performance effects of performance-related pay on the work
levels, equitable distribution of performance motivation, using a sample of 2423 civil servants
rewards, union resistance, employee distrust, con- of the Inland Revenue. The researchers found that
flicts between raters and rates, a lack of employee a majority of the Revenue staff supported the
confidence in evaluation techniques, and exces- principle of performance-related pay, and they
sive demands on supervisor’s time. believed that they were capable to perform at the
6 Expectancy Theory in Organizations

desired level of performance. However, almost Overcoming the Free-Rider Problems

half believed that even if their performance were
good enough, it was doubtful that a performance Powers and Thompson (1994) suggest that the
pay award would be given. This belief reduced production of public services does not depend
staff motivation to change their behavior. In addi- only on the behavior of public officials. Time,
tion, only few felt that the financial reward would effort, and skills contributed by citizens are often
influence them to change their behavior. Because critical to the provision, production, and delivery
two of expectancy theory’s three conditions were of public services. The researchers examined how
not met, the authors concluded that the Revenue’s to design and organize the delivery of public
system of performance pay failed to motivate services to promote the kinds of coproduction
staff. It was not the amount of money involved, needed to make public efforts effective and pro-
but whether money was allocated fairly among ductive. Based on expectancy models, the study
staff. emphasizes the importance of providing citizens
with an understanding of what is expected of them
if they are to contribute to service production and
Contracted Provider Motivation delivery, the capacity to meet those expectations,
and an incentive to do so. The authors also suggest
Lambright (2010) examined how well expectancy that human resource management practices
theory explains contracted provider motivation to should provide incentives to public employees to
properly use service-monitoring tools. Three con- encourage citizens to contribute their attention
ditions were suggested for a contracted provider and efforts to the production and delivery of social
to be motivated: “(a) the contracted provider services. This may be an appropriate strategy for
believes that if it tries to use a tool properly, it community activities, such as cleaning streets,
will be able to use the tool properly; (b) the removing snow, renovating and maintaining pub-
contracted provider believes contract rewards lic buildings and parks, and so on. Voluntary par-
and/or penalties are based on whether the govern- ticipation in community-approved activities is
ment thinks it is properly using the tool; and often intrinsically satisfying to many, especially
(c) the contracted provider values receiving these when it leads to visible, positive consequences
rewards and/or avoiding these penalties.” (p. 380). (p. 190).
The second type is the rewards and penalties that a
contracted provider could receive based on
whether the tool showed the provider satisfied Risk Culture
the government’s performance criteria. For
contracted providers to be motivated because of Bozeman and Kingsley (1998) suggest that the
the second type of rewards and penalties, three concept of risk culture pertains to managers’ per-
conditions must be met: “(a) The contracted pro- ceptions that their co-workers and superiors take
vider believes that proper use of the tool will risks and promote risk-taking. Based on expec-
demonstrate its satisfaction of the performance tancy theory, the authors hypothesized that man-
criteria established by the tool, (b) the contracted agers would perceive lesser risk-taking when
provider believes that contract rewards and pen- there was a low expectation that good perfor-
alties will be based on satisfaction of the perfor- mance will be rewarded. Four variables were
mance criteria, and (c) the contracted provider used to assess the link between rewards and total
values receiving these rewards and/or avoiding risk: promotion by quality of work, pay based on
these penalties” (p. 381). The author found that longevity by rule, promotion based on perfor-
the expectancy theory did not appear to consis- mance by rule, and rule making promotion of
tently explain contracted provider motivation and good manager hard. The most significant variable
that it might explain these phenomena under con- was promotion based on performance by rule.
ditions of uncertainty. Managers who agreed that rules encouraged
Expectancy Theory in Organizations 7

promotion based on performance were more mission. When an individual is motivated by the
likely to perceive the organizations as having mission, they will put extra efforts and perform in
risk-oriented cultures. Similarly, managers who ways that are perceived to be related to
perceived rules as “1) dictating links between accomplishing the mission. This pattern of moti-
pay and longevity, and 2) increasing the difficulty vation differs from public service motivation.
for good managers moving up faster than poor While the latter focuses on “altruistic service”
ones, were less likely to perceive their organiza- that benefits a community or a larger population,
tion as having a risk-oriented culture” (p. 115). mission motivation focuses specifically on the
The implications are that “if would-be risk-takers agency mission (p. 25).
can, as part of their risk calculations, have some
confidence that the fruits of their risk (at least the
ones that succeed) will translate into reward, pro- Criticism of Expectancy Theory
motion or some form of recognition, then the risk
taker is better informed, more likely to be acting The early research on expectancy theory was far
on the basis of perceived self-interest and, gener- from conclusive in that the theory often emerged
ally, is making a better decision” (p. 117). as invalid in a specific context, and, even when
validity was established, the correlations tended to
be low (Miner 2002). Pinder (1984, pp. 146-147)
Mission Valence identified several typical mistakes made by
researchers interested in expectancy theory. First,
Rainy and Steinbauer (1999) developed a theory the low validity, reliability of valence, instrumen-
to explain the effectiveness of government orga- tality, and expectancy measures had caused under-
nizations. The theory includes the following com- estimates of the validity of the theory. Second,
ponents: supportive behaviors from external researchers used mostly cross-sectional research
stakeholders; agency autonomy in refining and designs, in spite of the fact that theory spoke of
implementing its mission; high “mission valence” changes, at one point in time, of V, I, and
(an attractive mission); a strong, mission-oriented E perceptions being predictive of changes of effort
culture; and certain leadership behaviors. These at some subsequent point in time. Third, some
factors enhance motivation – task motivation, studies used incorrect mathematical procedures
mission motivation, and public service for testing the interaction effects between effort
motivation – that can be differentiated but that and ability. Fourth, multiplication in the formula
must be linked together in effective government assumed that valence, instrumentality, and expec-
agencies. tancy beliefs were independent of one another;
The concept of mission valence, in particular, however, this might not be the case. Fifth, the
draws on the concept of valence from expectancy theory assumes that people are rational, and peo-
theory of work motivation. The mission has ple have limited cognitive capacities. Finally,
higher valence when it has higher levels of the some studies used supervisory performance as
following dimensions: “difficult but feasible, rea- the criterion against which predictions of
sonably clear and understandable, worthy/worth- employee force was compared. Now, studies are
while/legitimate, interesting/exciting, important/ designed in ways that yield not only significant
influential, and distinctive” (p. 3). The more results but also correlations well above those that
“engaging, attractive, and worthwhile” the mis- were typical in early research (Miner 2002).
sion is to people, the more the agency will be able Lawler (1981, p. 23) also notes that “. . . Tying
to attract people to join the agency, earn their rewards to performance requires a good measure
commitment, and motivate them to perform well of performance, the ability to identify which
(p. 16). The authors (1999) suggest that mission rewards are important to particular individuals,
motivation will further depend on employees’ and the ability to control the amount of rewards
views of the relationship between work and the an individual receives. None of these things are
8 Expectancy Theory in Organizations

easy to accomplish in most settings – a fact that when the merit pay system is administered fairly
has led some to conclude that it is not worth trying and accurately. Through careful design and imple-
to relate pay rewards to performance.” mentation of merit-based plans, government
A few scholars have also criticized expectancy might enhance managers’ positive attitudes
theory for failing to distinguish between condi- toward the system and their motivation (Brundey
tions of certainty and uncertainty (Lambright and Condrey 1993).
2010). It is unclear what the theory would predict
when any of its conditions defining effort, instru-
mentality, and valence are not met. For example, Cross-References
on all levels of government in the United States,
PFP systems have been chronically underfunded ▶ Equity Theory of Organizations
by legislative bodies (Kellough and Nigro 2002). ▶ Motivation Theories of Organization
As a result of the uncertainty of reward availabil- ▶ Organizational Justice
ity or the small size of rewards, the motivational ▶ Performance Management and Culture
impact may be diminished. ▶ Risk and Organizations.

Conclusion References

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