Expectancy theory asserts that: ‘people will do what they can do when they want to do it.’ Victor Vroom developed expectancy theory. According to it, work motivations depends on the relationships between the following three factors:

• Expectancy (also called the effort-performance expectancy) — a person’s belief that working hard will result in a desired level of task performance being achieved.
• Instrumentality (also called the performance-outcome expectancy) — a person’s belief that successful task performance will be followed by rewards and other potential outcomes.
• Valence — the value a person assigns to possible rewards and other work-related outcomes.

The relationship between motivation and these factors (expectancy, instrumentality and valence) can be expressed as an equation:
M = E × I × V
where M = motivation, E = expectancy, I = instrumentality, and V = valence.

The multiplier effect implies that for motivation to be high, expectancy, instrumentality, and valence must be high. Conversely, if expectancy is low (the person feels he or she can’t perform), instrumentality is low (the person is not confident performance will be rewarded), and/or valence is low (the reward is not valued), motivation will be low.

Basically, the theory suggests managers can motivate employees by ensuring that E, I and V are maximised and V is positive.

To maximise expectancy, managers should:

select workers with ability

train workers to use ability

support work efforts

clarify performance goals.

To maximise expectancy, managers should:

clarify psychological contracts

communicate performance-outcome possibilities

demonstrate what rewards are contingent on performance.

To maximise valence in a positive direction, managers should:

Identify individual needs

Adjust rewards to match these needs.