Using the Expectancy Theory and Total Rewards to Drive Productivity

Conceptual image of benefits on a computer screen

Victor Vroom popularized his expectancy theory in the 1960s, but it’s just as applicable to workplace performance now as it was then.

Now more than ever, employers are applying the expectancy theory to total rewards initiatives to organically drive motivation and thus increase productivity. Below, we’ll explore how you can apply the principle to your total rewards program.

Expectancy Theory 101

If you’re unfamiliar with the basics of Vroom’s expectancy theory, here’s a brief overview, courtesy of Management Study Guide: An employee’s motivation is dictated by how much he/she wants a specific reward (also known as valence), how likely it is that effort will lead to the expected performance (expectancy), and the employee’s belief that his/her performance will lead to the reward (instrumentality).

To put it in the most basic terms, the belief is that employees will perform better when they are working towards a desired reward.

How To Apply The Expectancy Theory and Total Rewards

Tailoring your total rewards program to offer associates the benefits they truly want most is the ticket to successfully applying the expectancy theory. But, what if you don’t know what your employees want most?

In 2010, World At Work completed a study to gauge the impact of five rewards (compensation, benefits, work/life balance, recognition, and development/career opportunities) on employee attraction, motivation, and retention. While development opportunities significantly impacted attraction, the most important rewards used to drive intrinsic motivation were satisfaction with work/life balance and performance recognition.

Of course, every organization is different – while some employees may prefer greater work/life flexibility, your associates might consider benefits such as health care and 401(k) options most important.

Communicating Total Rewards

One way to determine which rewards motivate your employees the most is to enhance your total rewards communication. You can start by providing easy access to total rewards statements through a software solution, then follow up by asking employees which benefits they rank as most valuable.

Keep in mind that rewards can be both intrinsic and extrinsic. While extrinsic rewards (pay raises, bonuses, benefits, etc.) can be motivating, intrinsic offerings (connecting to a purpose, making progress, receiving positive feedback) are often perceived as having more of a lasting positive impact on day-to-day motivation, according to Ivey Business Journal.

Perfecting your rewards strategy to align with the expectancy theory may require some tweaking, but you can make the task much easier with the help of total reward statement software. Not only will it streamline the total rewards process for HR, but it will also make updates and benefits-related information easier for employees to access and understand.

HRsoft is a leading provider of strategic talent management software that improves manager effectiveness and business results. Our full suite of cloud-based HR software solutions includes applicant tracking software, compensation planning software, total rewards software, stay interview software, performance management software, and content management software. For more information on our Total Rewards solution, click here.