Expectancy Theory Predictions of Effort, Performance and Satisfaction: An Exploratory Study of Rewards at a Team-Based Greenfield Company

Date of Submission

2007

Document Type

Dissertation

Degree Name

Doctor of Science in Management Systems (Sc.D.)

Department

Management

Advisor

Tara J. L'Heureux-Barrett

Committee Member

Allen L. Sack

Committee Member

Wentworth D. Boynton

LC Subject Headings

Astra Merck, Teams in the workplace, Performance awards, Employee motivation

Call No. at the Univ. of New Haven Library

AS 36 N290 Mgmt. Syst. 2007 no. 6

Abstract

In today’s business environment, organizations are addressing numerous competitive challenges through the use of teams. As teams play an increasingly important role in American companies, realizing their advantages is paramount. Motivating team members through the allocation of rewards is one approach to gain the expected benefits of team-based work and is the primary focus of the present study. Astra Merck offered an ideal setting to study rewards for team-based work as the company was a greenfield environment, one in which teams were the foundation of the culture and had been since the creation of the company. Also, a wide variety of rewards were available at Astra Merck that included monetary and non-monetary types of rewards as well as rewards at the individual and team levels. The present study investigated how different rewards related to important organizational outcomes such as effort, performance and satisfaction.

Vroom’s (1964) Expectancy Theory or Valence-Instrumentality-Expectancy theory (VIE) provided the framework from which to examine the motivating potential of various reward types and levels. According the VIE theory, employees rationally evaluate the amount of effort they will expend on tasks that they believe they can successfully perform, and that will lead to beneficial and attainable rewards. The usefulness or utility of a reward is based on the extent to which the reward is valued and the likelihood of receiving the reward when performing well.

Two hundred seventy six employees participated in the present study by completing a questionnaire that centered on the motivating potential of a pool of available rewards. Research questions drawn from VIE theory guided the investigation of the relationship between characteristics of rewards and common outcome variables in organizations.

First, the present study provided a descriptive summary of reward perceptions by ranking the valence (benefit), instrumentality (attainability) and incentive values (utility of a reward) of reward levels and types. This study also examined employee preferences for a particular combination or mix of reward levels. Also explored was the extent to which employee preferences for a mix of individual, team, and organizational level rewards was similar to the actual mix made available to them. The validity of VIE theory was tested by correlating derived effort (motivational force) of rewards as computed by the VIE formula, with independent measures of effort and performance. That is, derived effort, calculated via a formula derived from VIE theory (Vroom, 1964; Porter and Lawler, 1968), was correlated with stated (self-reported) effort in a team as well as stated performance as measured by milestone attainment and milestone timeliness. The primary focus of the present study was on the relationship among the perceived benefit and attainability of different rewards on important outcome variables such as effort expended on the job, performance, reward satisfaction, and job satisfaction. These outcome measures were regressed on the various reward types and levels. Reward types included monetary and non-monetary rewards, whereas reward levels comprised individual and team-based rewards. Further, gender was examined for possible differences in incentive values of rewards between men and women.

The VIE Theory model of work performance was generally supported by the data from the present study. Effort as derived from the VIE formula was significantly related to self-reported effort and performance, thus indicating support for the validity of the model. Also, results indicated significant relationships among incentive values of reward types and levels, and effort and performance measures. Significant relationships were evident among reward characteristics and other outcome variables including individual recognition, team recognition, overall job satisfaction, and reward system satisfaction. Certain rewards were shown to be more motivating for specific outcomes. In general, monetary rewards best predicted effort and performance whereas non-monetary rewards were better predictors of job and reward satisfaction. Another finding was that women perceived non-monetary team-based rewards to be more motivating than do men, but preferred non-monetary individual-based rewards more so than men. This study also identified a ratio of desirable reward levels, which may be useful for those companies that desire to motivate employees who work in teams. Theoretical and practical implications of the findings are discussed, as well as directions for future research on rewarding teams.

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