Page 549 - Encyclopedia of Business and Finance

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Motivation

EXPECTANCY THEORY • Leave the job: Individuals might do this rather than
Victor Vroom (1932– ) developed the expectancy theory, experience what they perceive to be continued
which suggests expectancy is the perceived probability inequity
that a certain effort or performance will result in the When administering compensation and incentive
achievement of a particular goal. Perceived probability is programs, managers must be careful to ensure that the
important. Individuals’ expectations about their ability to
rewards are equitable; if programs are not perceived as
accomplish something will affect their success in accom- equitable, then they will not contribute to employee moti-
plishing it. vation.
The desirability of outcomes is important, too. The
value of or preference for a particular outcome is called REINFORCEMENT THEORY
valence. To determine valence, people will ask themselves
Reinforcement theory is based on the relationship
whether or not they can accomplish a goal, how impor-
between behavior and its consequences. In the workplace,
tant is the goal to them (in the immediate as well as the reinforcement can be applied to change or modify on-the-
long term), and what course of action will provide the job behavior through incentives and rewards and, to some
greatest reward. An individual’s expectation of actually extent, punishments.
achieving the outcome is crucial to success, and many fac-
B. F. Skinner (1904–1990), a professor at Harvard
tors influence this. University, was a highly controversial behavioral psychol-
The expectancy theory can be applied through incen- ogist known for his work in operant conditioning and
tive systems that identify desired outcomes and give all behavior modification. His reinforcement theory takes
workers the same opportunities to achieve rewards, such into consideration both motivation and the environment,
as stock ownership, promotions, or other recognition for focusing on stimulus and response relationships. Through
achievement. his research, Skinner noted that a stimulus will initiate
behavior; thus, the stimulus is an antecedent to behavior.
The behavior will generate a result; therefore, results are
EQUITY THEORY
consequences of behavior.
The equity theory focuses on individuals’ perceptions of
According to Thomas McCoy:
how fairly they are treated in comparison to others. It was
developed by J. Stacy Adams (1925– ), who found that The quality of the results will be directly related to
equity exists when people consider their compensation the quality and timeliness of the antecedent. The
equal to the compensation of others who perform similar more specific the antecedent is and the closer in
time it is to the behavior, the greater will be its
work, which is an external standard. People judge equity
effect on the behavior. . . . The consequences pro-
by comparing inputs (such as education, experience,
vide feedback to the individual. (1992, p. 34)
effort, and ability) to outputs (such as pay, recognition,
benefits, and promotion). It can also relate to internal Therefore, the individual more easily associates the
standards when people compare how hard they are work- behavior with the stimulus.
ing with what they are getting in return. The four types of reinforcement are:
If people perceive a discrepancy between the inputs
1. Positive reinforcement: The application of a pleasant
and outputs, then they are unhappy. When the ratio is out and rewarding consequence following a desired
of balance, inequity occurs. And inequitable pay can cre- behavior, such as giving praise. When a behavior is
ate an impossible situation when implementing salary and
positively reinforced, the individual is more likely to
incentive systems. According to Richard L. Daft (2003),
repeat the behavior. People tend to have an intrinsic
individuals will work to reduce perceived inequity by
(internal) need for positive reinforcement. Other
doing the following:
examples of positive reinforcers are recognition of
accomplishments, promotion, and salary increases.
• Change inputs: Examples include increasing or
reducing effort 2. Negative reinforcement: The removal of an unpleas-
ant consequence following a desired behavior. This
• Change outcomes: Such as requesting a salary increase
reinforcement is also called avoidance. An example
or improved working conditions
of negative reinforcement is when workers return
• Distort perceptions: This occurs when individuals promptly from a lunch break to avoid being repri-
cannot change their inputs or outcomes; one exam- manded by their supervisor or when a manager no
ple is artificially increasing the importance of awards longer reminds workers about a weekly deadline

526 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION