The Expectancy Theory

The Expectancy Theory

This is not a leadership theory, but I covered it here because the path-goal theory was based on it. The Expectancy theory was designed to explain why there is not a very high relationship between the offer of incentives in a workplace and an increase in the effort put forth by the workers there. Expectancy theory explains the many places where the connection may be broken.

 

a.       The nature of the incentive. What is offered must be valued by the person for whom it is supposed to have incentive value. For example, workers may be told that if they work hard and perform well they will be promoted to a supervisory position. Some individuals in the work group may place high personal value on such a promotion. Others however, may not want the added responsibilities. So, the first principle of expectancy theory is that the incentive or reward must be valued by the individual or it will not result in greater work effort.

b.      Self-confidence. The worker must believe that if he or she puts forth increased effort, this will result in the level of performance specified as necessary to earn the incentive. Many workers are not sure that if they work even harder, they can perform at the specified level.

c.       Level of uncertainty about the reward. Many incentives are offered on a vague or uncertain basis. Workers may be told that if their performance is up to certain standards they will become eligible for promotion, for raises in pay or bonuses. There are usually not enough promotions so that everyone who is performing well can be promoted. Often workers do not have faith that effort and performance level is the primary determinant of who gets promoted. Raises and bonuses are dependent to some degree on how well the company is doing economically, and not just on how well employees are performing. As a result, the uncertainty about actually receiving the reward may cause some workers to feel that purring forth extra effort is not justified by the probability of receiving the reward.

 

The bottom line is that a person is likely to put forth extra effort as the result of an offered incentive only if that person values the reward highly and has a high degree of expectation that such increased effort will result in actually result in receiving the reward. Path-goal theory is designed to help leaders understand the various things that may prevent a worker from believing the goal can be reached. The leader's behavior is designed to help workers believe they can perform well and that performance will yield many valued rewards.