The Limitations of Intrinsic Motivation in Expectancy Theory: A Case of Peso Bank’s Employee Reward Program

QUESTION

The president of Peso Bank tries to motivate employees by giving them $1,000 every time the president
notices them providing excellent customer service. The problem is that the president is never in the branch
offices. According to the ____ component of expectancy theory, this plan will not motivate employees.

ANSWER

The Limitations of Intrinsic Motivation in Expectancy Theory: A Case of Peso Bank’s Employee Reward Program

Introduction

Expectancy theory is a widely recognized motivational framework that seeks to explain how individuals make decisions regarding their effort and performance based on the anticipated outcomes. This theory posits that an individual’s motivation is influenced by three components: expectancy, instrumentality, and valence. In the case of Peso Bank, the president’s attempt to motivate employees through a reward program based on excellent customer service may fall short in stimulating their motivation due to a specific component of expectancy theory.

 Overview of Expectancy Theory

Expectancy theory, developed by Victor Vroom in the 1960s, suggests that individuals are motivated to act in a particular way when they believe their efforts will lead to desirable outcomes. The theory comprises three components:

Expectancy: The belief that a specific level of effort will lead to a certain level of performance.

 Instrumentality: The perception that performance will be rewarded with specific outcomes or rewards.

 Valence: The value an individual places on the rewards or outcomes offered in exchange for their performance.

 Problem with Peso Bank’s Reward Program

The key issue with Peso Bank’s employee reward program lies in the instrumentality component of expectancy theory. While the president’s intentions are commendable, the lack of direct observation or interaction with employees at branch offices negatively impacts the instrumentality component. Since the president is never present to witness excellent customer service personally, employees may doubt whether their efforts will be recognized and rewarded.

Implications of Intrinsic Motivation

Intrinsic motivation plays a vital role in the success of expectancy theory-based reward programs. When employees are intrinsically motivated, they are driven by internal factors, such as a sense of achievement, personal growth, and the joy of performing well. In such cases, the presence of an external reward may not significantly impact their motivation to excel.

The Importance of Feedback and Recognition

For Peso Bank’s reward program to be effective, it is essential to address the instrumentality component by incorporating timely feedback and recognition. The president can enhance motivation by introducing mechanisms for branch managers or supervisors to report instances of excellent customer service. Providing employees with regular feedback on their performance and acknowledging their achievements in a public forum can increase the perceived instrumentality of the reward program.

Establishing Trust and Transparency

To foster a culture of motivation and productivity, Peso Bank’s leadership should focus on building trust and transparency within the organization. Ensuring that employees understand the criteria for receiving rewards and how their contributions are evaluated can enhance the overall effectiveness of the program.

Conclusion

Expectancy theory is a powerful framework that can guide organizations in developing motivational strategies for their employees. In the case of Peso Bank, the president’s attempt to motivate employees through a reward program for excellent customer service may be hindered by the lack of direct observation. By focusing on intrinsic motivation, providing timely feedback, and fostering trust and transparency, Peso Bank can create a more effective and motivating reward program that encourages outstanding performance and fosters a positive work environment.