expectancy theory

(noun)

A framework that holds that people decide to act in a certain way because they are motivated to select a specific behavior over other behaviors based on the expected result.

Related Terms

Examples of expectancy theory in the following topics:

  • Expectancy Theory

    • Expectancy theory is about the mental processes involved in making choices.
    • In organizational behavior, expectancy theory embraces Victor Vroom's definition of motivation.
    • Vroom introduces three variables within his expectancy theory: valence (V), expectancy (E), and instrumentality (I).
    • These three components of expectancy theory (expectancy, instrumentality, and valence) fit together in this fashion:
    • Analyze Vroom's expectancy theory to assess the accuracy and effectiveness of motivating based upon expectancy, instrumentality, and valence

  • Relationship Between Expectations and Inflation

    • There are two theories of expectations (adaptive or rational) that predict how people will react to inflation.
    • To fully appreciate theories of expectations, it is helpful to review the difference between real and nominal concepts.
    • The theory of adaptive expectations states that individuals will form future expectations based on past events.
    • Accordingly, because of the adaptive expectations theory, workers will expect the 2% inflation rate to continue, so they will incorporate this expected increase into future labor bargaining agreements.
    • However, under rational expectations theory, workers are intelligent and fully aware of past and present economic variables and change their expectations accordingly.

  • The Psychology of Employee Satisfaction

    • The expectancy theory of motivation proposes that people believe there is a relationship between effort, performance, and outcome.
    • The outcome in expectancy theory is often a reward given for the desired behavior.
    • An example of expectancy theory in the workplace would be a manager offering a car as a bonus (the reward) to the salesperson who makes the year's greatest number of sales (the effort).
    • People with a high need for affiliation expect a more personalized relationship with others at work.
    • However, extrinsic reward systems also play a role in employee satisfaction, as suggested by expectancy theory.

  • Expectancy Theory

    • Expectancy Theory postulates that an individual's motivation can be derived through identifying an appropriate expectation.
    • 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.
    • Understand the three relationships and four variables that result in Expectancy Theory

  • Perspectives on Motivation

    • Theories of motivation are of course rooted in psychology.
    • Cognition-oriented theories generally revolve around expectations and deriving equitable compensation for a given effort or outcome.
    • There are two main cognition-oriented theories: equity theory and expectancy theory.
    • Equity Theory is based on the basic concept of exchange.
    • Essentially, Expectation Theory and Equity Theory demonstrate the value of rewarding an employee's investment of time and effort with appropriate compensation.

  • Role Theory

    • Role theory posits that human behavior is guided by expectations held both by the individual and by other people.
    • These role expectations would not be expected of a professional soccer player.
    • Another limitation of role theory is that it does not and cannot explain how role expectations came to be what they are.
    • Role theory has no explanation for why it is expected of male soldiers to cut their hair short, but it could predict with a high degree of accuracy that if someone is a male soldier they will have short hair.
    • Additionally, role theory does not explain when and how role expectations change.

  • Expected Dividends, No Growth

    • A no-growth company would be expected to return high dividends under traditional finance theory.
    • The amount is also often calculated based on expected free cash flows, which means cash remaining after all business expenses, and capital investment needs have been met.
    • If there are no favorable investment opportunities–projects where return exceed the hurdle rate–finance theory suggests that management will return excess cash to shareholders as dividends.
    • For example, shareholders of a "growth stock," expect that the company will, almost by definition, retain earnings so as to fund growth internally.
    • Describe how a company should make a dividend decision when it expect no growth

  • Expected Value and Standard Error

    • In probability theory, the expected value (or expectation, mathematical expectation, EV, mean, or first moment) of a random variable is the weighted average of all possible values that this random variable can take on.
    • The value may not be expected in the ordinary sense—the "expected value" itself may be unlikely or even impossible (such as having 2.5 children), as is also the case with the sample mean.
    • If we were to selected one number from the box, the expected value would be:
    • The new expected value of the sum of the numbers can be calculated by the number of draws multiplied by the expected value of the box: $25\cdot 2.2 = 55$.
    • This means that if this experiment were to be repeated many times, we could expect the sum of 25 numbers chosen to be within 5.8 of the expected value of 55, either higher or lower.

  • Expected Values of Discrete Random Variables

    • In probability theory, the expected value (or expectation, mathematical expectation, EV, mean, or first moment) of a random variable is the weighted average of all possible values that this random variable can take on.
    • The expected value may be intuitively understood by the law of large numbers: the expected value, when it exists, is almost surely the limit of the sample mean as sample size grows to infinity.
    • The value may not be expected in the ordinary sense—the "expected value" itself may be unlikely or even impossible (such as having 2.5 children), as is also the case with the sample mean.
    • This is intuitive: the expected value of a random variable is the average of all values it can take; thus the expected value is what one expects to happen on average.
    • The intuition, however, remains the same: the expected value of $X$ is what one expects to happen on average.

  • Herzberg's Two-Factor Theory

    • Managers must realize that not providing the appropriate and expected extrinsic motivators will sow dissatisfaction and unmotivated behavior among employees.
    • The key factor that differentiates Two-Factor Theory is the idea of expectation.
    • This is because of expectation.
    • Extrinsic motivators (e.g., salary, benefits) are expected and so will not increase motivation when they are in place, but they will cause dissatisfaction when they are missing.
    • Analyze Frederick Herzberg's perspective on motivating employees through his Two-Factor Theory (also known as Motivation-Hygiene Theory)