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Expectancy Theory, initially put forward by Victor Vroom at the Yale School of Management, suggests that behavior is motivated by the anticipated result or consequences expected. The concept of choice is central to this theory, as there are a variety of behaviors that an individual could potentially choose. To anticipate what choice will be made , identify what consequences would be expected as an outcome, and select the motivation which will result in the optimal outcome.
The Building Blocks
Expectancy Theory boils down to a few simple variables, which in conjunction produce the projected outcome based upon the motivational inputs. This is described as three relationships using four inputs:
Expectancy: effort → performance (E→P)
Instrumentality: performance → outcome (P→O)
Valence: V(R) outcome → reward
What you'll notice is a full equation, where each variable leads to the next:
Moving from effort to performance requires three things. First is self-efficacy, or the belief that one can accomplish the goal. Second is the appropriate goal difficulty. Third is the perception of control, the concept that accomplishing the objectives is within one's influence.
To move from performance to outcome, the individual must trust that the delivery of a given output will result in the desired reward. An example of this could be a commission on a sale. Established policies in place, preferably via a contract, will guarantee the reward will be delivered based upon an agreed upon performance.
This is simply the valuation of a given reward from the individual being motivated. This can be intrinsically positive or negative, which is to say the pursuit of OR avoidance of an outcome. This is why it is called a valence. Based upon the values, desires, and objectives of an individual, the individual will have a certain valued reaction to the reward. If one reward has a more extreme valence than another, it will consequently result in a higher level of motivation.
Expectancy Theory combines these three concepts into the conclusion that these three interactions will ultimately create a desired motivational response.