Expectancy Theory

Expectancy theory was developed by Victor Vroom of Yale School of Management. Expectancy theory is related to the expectation that employees have from their employees. The expectancy theory of motivation has three components and relationships. The first component is the effect-performance relationship; where an employee works in order to give a good performance. The second component is the performance-reward relationship; where the employees perceive that by giving a high level of performance they will be rewarded. The third component of the theory is reward-personal goal relationship; where the employee is rewarded for the good work by the employer.

The effect performance relationship is primarily concerned with the implementing job rotation, job enlargement and job enrichment. These three methods are highly important because an employee needs newer things in his routine job and therefore it is highly important to constantly make these changes in order to increase the efficiency of his performance. Job rotation is primarily concerned with giving an employee another job usually at the same skill level. Job enlargement focuses on giving an employee increased amount of work with greater authority and responsibility to perform the tasks assigned. The last one, job enrichment is primarily concerned with giving an employee increased freedom in planning and execution the tasks assigned. This is the case when he is considered to have enough knowledge and ability that he can perform the task independently and does not require any such supervision.

Performance reward relationship is based on the fact that an employee must be involved in the decision making process of an organization. The three things which are involved in participative reward relationship are participative management, representative participation and quality circle. Participative management refers to the sharing of the decision making process by both employees and their supervisors. Representative participation refers to giving a representation to the employees on the board. Quality circle refers to the meetings of various employee groups and management to discuss the quality problems, recommend the solutions of the problems and to take appropriate corrective measures.

Reward personal goal relationship refers to the reward system that the organization sets up in order to recognize the efforts of the employees. There are two reward programs which are commonly used one is the variable pay program where as the other one being a skill based pay program. In the variable pay program the payment is based on the number of products made, merit based pay, employee share option scheme etc. In the skill based pay the remuneration to the employee is based on the number of skills that he has and the tasks that can be performed by him. This is one of the best way to encourage the employees to increase their set of skills so that they would be rewarded by the organization.