Expectancy & Goal Setting Theory

“The application of both goal setting and expectancy theory principles help to enhance employee performance”. To what extent do you agree with this statement?

Process theories are theories of motivation that emphasizes on how we make choices with respect to goals. Content theories concern with ‘what’ motivates people while process theories concern with ‘how’ motivation occurs. Major process theories include expectancy theory, goal setting theory and equity theory. I agree to the notion that application of goal setting and expectancy theory will improve employee performance to a certain extent. In this essay, the application of goal setting and expectancy theories in real life and the possible limitations of the theories will be discussed.

“Goal setting theory is a process theory of motivation which argues that work motivation is influenced by goal difficulty, goal specificity, and knowledge of results.” (Locke, 1968) According to goal setting theory, challenging goals can result in higher performance as compared to monotonous goals as most of the jobs can be dull, hence by accomplishing challenging goals will lead to sense of fulfilment from the employee. Besides, specific goals will stimulate higher level of performance than vague goals such as ‘do your best’. Feedback on past performance is also crucial as employees will appreciate the manger’s interest in their success and always know what is expected of them. Thus, it is common for an organization to apply goal setting theory as in most cases it will bring about positive results.

An experiment was conducted with a company involved in loading of logging trucks (Latham and Locke, 1979). It was observed that although the drivers’ wages were paid by piece-rate system, they were still opted for underloading the trucks, on average at 58 to 63 percent of capacity. This was due to if the trucks were underloaded, the company will gain less revenue, however if the trucks were overloaded, the driver could be fined by the Highway Department and could eventually lose his job. The continual loss of profit led the company to assign goal of 94 percent of the truck’s legal net weight to the driver. Subsequently, the loads exceeded 90 percent of the truck’s capacity constantly throughout the next seven years.

However, it is important for an organization to not set overstretched goals for its employees. Although the goal will encourage higher performance, an employee may choose to adopt unethical methods to attain it. For instance, during the 1990s, (Harvard Business Review, 2012) the company Sears gave a sales quota of $147 per hour to its auto repair personnel. To attain such ambitious targets, the staff performed needless repairs and overcharged for work. Besides, another limitation of goal setting theory is when employees over-focus on achieving the goal, might overlook other vital aspects of the business. This can be illustrated by the employees of Ford that aimed to build a car under $2000 by 1970, (Harvard Business School, 2009) neglected the safety testing, resulted in an explosion that caused the dead of 53 people. Thus, despite the fact that goal setting theory is widely accepted and adopted by most companies, the managers should evaluate the consequences that might bring about when incorrectly implemented.

Next, we will discuss about the effectiveness of expectancy theory. Vroom (1964) defined expectancy as “a process theory which argues that individual motivation depends on the valence of outcomes, the expectancy that effort will lead to good performance, and the instrumentality of performance in producing valued outcomes.” It assumes the employee performance will improve if an organization is able to maximize the employees’ force (F) of motivation to work hard, which is the product of multiplication of valence (V), instrumentality (I) and expectancy (E).

To test the validity of the theory, Chiang and Jang (2008) conducted an experiment to determine what makes hotel employees motivated towards their jobs. The employees were asked to complete a questionnaire consist of 26 items with scale from 1 (lowest) to 7 (highest). The result, most employees believe the effort they put in have positive linkage with their performance with mean of 5.67, however the instrumentality only has a mean of 4.89 as a number of them do not feel appreciated by the manager although performing well. Hence, they believe if good performance will lead to promised reward from the manager, it will definitely enhance their motivation and performance. In another organization, Apple Inc, also took an initiative to improve employees’ performance. As reported by Bloomberg (2012), as of July 2012, Apple Inc. introduced up to 25 percent pay increment on each Apple store worker due to good performance. This resulted in high instrumentality as employees believe good performance will lead to desired outcome. Besides, Tim Cook also commended some employees at public events to make them feel more valued. (upenn.edu, 2012). High instrumentality alongside with high valence have increased the motivation of employees and subsequently encourage even higher performance.

However, a major limitation of the theory is that if good performance will lead to negative effect for the individual, an individual might prefer to stay average, as explained in groupthink theory. Janis (1982) defined groupthink as “a mode of thinking people engage in when they are deeply involved in a cohesive in-group, when the members striving for unanimity override their motivation to realistically appraise alternative courses of action.” Hence when this phenomenon occurs, regardless of how attractive the rewards are, one will not choose to outperform other colleagues to prevent resentment from team members.

To summarize, when an organization that adopts goal setting theory is able to set challenging and specific goals with appropriate feedbacks, employees will be motivated to accomplish a target. Besides, the application of expectancy theory allows companies to understand the significance of demonstrating appreciation towards their employees’ effort. I agree the effectiveness of adopting both theories to enhance employee performance to a certain extent as they do contain some limitations. Hence, to maximize positive results, an organization should always try to evaluate and minimize any potential negative consequences when applying the theories.

References
Chiang, C.F and Jang, S.C. (2008). An expectancy theory model for hotel employee motivation. International Journal of Hospitality Management. 27 (2), 313-322.

Janis, I. L. (1982). Groupthink (2nd ed.). Boston: Houghton Mifflin.

James D. Rose. (2011). Diverse Perspectives on the Groupthink Theory – A Literary Review. Emerging Leadership Journeys. 4 (1), p37-57.

Locke, E.A. (1968). Towards a theory of task performance and incentives. Organizational Behaviour and Human Performance. 3 (2), pg89-157.

Locke, E.A. and Latham, G.P. (Autumn 1979). Goal Setting – A Motivational Technique That Works. OrganizationalDynamics. 8 (2), pg68-80.

Markovitz, D. (2012). The Folly of Stretch Goals. Available: https://hbr.org/2012/04/the-folly-of-stretch-goals/. Last accessed 7th Nov 2014.

Silverthorne, E. (2009). When Goal Setting Goes Bad. Available: http://hbswk.hbs.edu/item/5969.html. Last accessed 6th Nov 2014.

Giles. T. (2012). Apple’s Retail Workers Are Said to Get Pay Increases. Available: http://www.bloomberg.com/news/2012-06-21/apple-retail-store-workers-said-to-receive-wage-increases.html. Last accessed 4th Nov 2014.

uPenn. (2012). iPerks: Apple, Like Others, Takes Steps to Woo Employees. Available: http://knowledge.wharton.upenn.edu/article/iperks-apple-like-others-takes-steps-to-woo-employees/. Last accessed 5th Nov 2014.

Vroom, V.H. (1964). Work and Motivation, New York: John Wiley.