In 1964 Victor Vroom developed his Expectancy Theory to explain observations on the motivations behind decision making. It has become one of the most dominate motivational theories in use today, and can be used to explain common workplace strategies such as performance reviews and financial incentive schemes.

Vroom believed that employees were more likely to be highly motivated when they perceived a link between effort, performance and rewards. Sounds fair enough.

He proposed that the link between motivation, effort, performance, and reward could be explained via the following formula:

M = E x I x V

where M = motivation, E = Expectancy, I = Instrumentality, V = Valence. Continue reading →