The Expectancy Theory demonstrates the Effort Performance Relationship. It states that the employee’s motivation is an outcome of how much that employee wants a reward.
It tells the likelihood that the individual’s effort be recognized in his performance appraisal.
A reward is the importance associated by an individual about the expected outcome. It is only an expected importance but not the actual importance which the employee expects after his performance.
An employee expects because Expectation brings out better results, which can be only achieved through better performance.
The expectation of an employee can be influenced by many factors which includes the skills and competencies that the employee possesses for performing the current task, whether correct resources are available or not and whether the employee is getting support from the superiors for completing the job.
Rewards is the faith that if the employee performs well, then an appropriate outcome will be there. It is also affected by certain factors like whether the employee believes in his superiors who will decide on the reward, process of selecting who receives the reward and the clarity of relationship between reward and outcome.
• It depends on individual whether he/she wants to achieve maximum satisfaction with the work that he/she does
• It emphasizes on rewards or pay-offs
• It stresses upon the expectations and perceptions of the employee
• It seems to be idealistic as many employees perceive high correlation between performance and rewards
• In many organizations rewards is not directly related to performance but to position, effort, responsibility, education etc, so the application of this theory is limited
• The managers can correlate the preferred outcomes of employees to the aimed performance levels
• The aimed performance level must be achievable
• The deserving employees must be rewarded for the performance
• The reward system must be equitable
• Motivation level of the employees should be continually assessed by conducting various tests like psychometric test, questionnaires etc
The above figure shows the relationship between effort, performance and reward