This category, labeled “cognitive theories of motivation,” presents two theories that view workers as

rational beings who cognitively assess personal costs and benefits before taking action: equity
theory and expectancy theory.

Applying I/O Psychology:

Job Enrichment in a Manufacturing and a Service Organization

In 1971, a decision was made to implement a job enrichment program in a Volvo automobile
assembly plant in Kalmar, Sweden, that was suffering from extremely high levels of absenteeism and
turnover. First, the traditional assembly-line workers were separated into teams with 15 to 25
members. In keeping with the general principles of job enrichment, each team was made
responsible for an entire auto component or function (for example, upholstery, transmission
assembly, or electrical system wiring). Each team was given the freedom to assign members to work
tasks, to set their own output rates, to order supplies, and to inspect their own work, all of which
had previously been performed by supervisors. To encourage team spirit, each group was given
carpeted break rooms, and job rotation (rotating workers periodically from one task to another) was
encouraged to alleviate boredom. The results of the program indicated a significant decline in both
absenteeism and turnover along with improved product quality, although there was a slight decline
in productivity, and the costs of implementing the program were great. It was also discovered that
some workers did not adapt well to the enriched jobs and preferred the more traditional assembly
line (Goldman, 1976). However, management proclaimed the program a success and implemented
the strategy in several other plants (Gyllenhammer, 1977; Walton, 1972).

In another job enrichment program, a large U.S. financial institution decided to introduce job
enrichment into their credit and collections department, which serviced the company’s credit card
account activity, collected on overdue accounts, and dealt with any credit-related difficulties
experienced by cardholders, such as changes of address, lost cards, and credit inquiries. In the
existing situation, each type of work was handled by a specialist, so that an inquiry on a single
account might be handled by several workers. This often led to confusion and to frustration on the
part of cardholders, who felt as if they were being passed from worker to worker for even simple
service requests. On the employee side, jobs were repetitive and monotonous, which led to high
rates of absenteeism and turnover.

The job enrichment program involved dividing the department into two distinct operating units,
each composed of a number of two-member teams. One unit dealt solely with actions on current
accounts and the other unit only with past due accounts. Rather than assigning work based on the
type of task that needed to be performed, each team was now given complete responsibility for
certain accounts. This restructuring increased the level of responsibility required of each worker and
reduced the routine nature of the jobs. Also, workers were able to receive feedback about their
work because they dealt with an action on an account from start to finish. Nine months after the
implementation of the job enrichment program, productivity had increased without any increase in
staff, collection of past due accounts was more efficient, absenteeism was down 33%, and the 9-
month turnover rate was zero (Yorks, 1979).

Equity Theory of Motivation

Equity theory states that workers are motivated by a desire to be treated equitably or fairly. If
workers perceive that they are receiving fair treatment, their motivation to work will be maintained,
and steady performance can be expected. If, on the other hand, they feel that there is inequitable
treatment, their motivation will be channeled into some strategy that will try to reduce the inequity.
Equity Theory a theory that workers are motivated to reduce perceived inequities between work
inputs 213 and outcomes.

Inputs elements that a worker invests in a job, such as experience and effort

Outcomes those things that a worker expects to receive from a job, such as pay and recognition.

Equity theory, first proposed by J. Stacey Adams (1965), has become quite popular. According to this
theory, the worker brings inputs to the job, such as experience, education and qualifications, energy,
and effort, and expects to receive certain outcomes, such as pay, fringe benefits, recognition, and
interesting and challenging work, each in equivalent proportions. To determine whether the
situation is equitable, workers make some social comparisons between their own input–outcome
ratio and those of comparison others, who can be coworkers, people with a similar job or
occupation, or the workers’ own experiences. It must be stressed that equity theory is based on
workers’ perceptions of equity/inequity. In certain instances, workers may perceive that an inequity
exists when there is not one, but equity theory’s predictions are still valid because they operate on
worker perceptions.

Comparison Others persons used as a basis for comparison in making judgments of equity/inequity

According to equity theory, lack of motivation is caused by two types of perceived inequity.
Underpayment inequity results when workers feel they are receiving fewer outcomes from the job
in ratio to inputs. Imagine that you have been working at a particular job for over a year. A new
employee has just been hired to do the same type of job. This person is about your age and has
about the same background and level of education. However, your new coworker has much less
work experience than you. Now imagine that you find out that this new employee is making $2.50
per hour more than you are. Equity theory predicts that you would experience underpayment
inequity and would be motivated to try to balance the situation by doing one of the following:

 Underpayment Inequity worker’s perception that inputs are greater than outcomes
 Increasing outcomes—You could confront your boss and ask for a raise or find some other
way to get greater outcomes from your job, perhaps even through padding your expense
account or taking home office supplies. (see Greenberg, 1990)
 Decreasing inputs—You might decide that you need to limit your work production or quality
of work commensurate with your “poor” pay.
 Changing the comparison other—If you find out that the new employee is actually the
boss’s daughter, she is clearly not a similar comparison other. (Werner & Ones, 2000)
 Leaving the situation—You might decide that the situation is so inequitable that you are no
longer motivated to work there. (Van Yperen, Hagedoorn, & Geurts, 1996)

Stop & Review

Define Herzberg’s concepts of motivators and hygienes and give examples of each.

Now imagine that you are on the receiving end of that extra $2.50 per hour. In other words,
compared to 214 your comparison others, you are receiving greater outcomes from your
average-level inputs. This is referred to as overpayment inequity, which also creates an
imbalance. In this case, equity theory predicts that you might try doing one of the following:

Overpayment Inequity worker’s perception that outcomes are greater than inputs

❚ Increasing inputs—You might work harder to try to even up the input–outcome ratio.
❚ Decreasing outcomes—You might ask for a cut in pay, although this is extremely unlikely.

❚ Changing comparison others—An overpaid worker might change comparison others to

persons of higher work status and ability. For example, “Obviously my boss sees my potential. I
am paid more because she is grooming me for a management position.”

❚ Distorting the situation—A distortion of the perception of inputs or outcomes might occur. For
example, “My work is of higher quality and therefore deserves more pay than the work of
others.”

It is this last outcome, the possibility of psychological distortions of the situation, that weakens
the predictive power of this cognitive theory of motivation. Equity theory has difficulty
predicting behavior when people act nonrationally, as they sometimes do.

Although most of the research on equity theory has used pay as the primary outcome of a job,
other factors may constitute outcomes. For example, one study found that workers would raise
their inputs in response to receiving a high-status job title (Greenberg & Ornstein, 1983). In
other words, the prestige associated with the title served as compensation, even though there
was no raise in pay. There was one catch, however; the workers had to perceive the higher job
title as having been earned. An unearned promotion led to feelings of overpayment inequity.
Another study looked at Finnish workers who felt inequity because they were putting too much
effort and energy into their work compared to the norm. The greater the felt inequity, the more
likely these workers reported being emotionally exhausted and stressed (Taris, Kalimo, &
Schaufeli, 2002).

Although equity theory has been well researched, the majority of these studies have been
conducted in laboratory settings (Greenberg, 1982; Mowday, 1979; although see Bretz &
Thomas, 1992; Carrell, 1978; Martin & Peterson, 1987). As you might imagine, there is greater
support for equity theory predictions in the underpayment inequity than in the overpayment
inequity condition (Campbell & Pritchard, 1976; Pritchard, Dunnette, & Jorgenson, 1972).

Research has also examined the role of individual differences as moderators of equity. In
particular, this research has focused on the construct of equity sensitivity. It has been suggested
that individuals vary in their concern over the equity of input–outcome ratios. In other words,
some people are quite sensitive to equity ratios and prefer balance, whereas others may be less
concerned with equitable relationships, and still other individuals may prefer to have either an
outcome advantage or an input advantage, preferring to be overcompensated or
undercompensated for their work (Huseman, Hatfield, & Miles, 1987; Sauley & Bedeian, 2000;
see Table 8.3). Obviously, if only certain individuals are motivated by equity, it will limit the
theory’s ability to predict which employees are influenced through equity.

Stop & Review

According to the MPS, which job characteristics are most important in motivating workers?

It has been suggested that cultural differences may affect equity theory (Bolino & Turnley, 2008).
For example, there may be cultural differences in how people evaluate inputs and outcomes and
in whom they choose as comparison others.

Despite the voluminous research, no particular applications have been developed directly from
the equity theory. As Miner (1983, p. 48) stated, “The theory has tremendous potential insofar
 as applications are concerned, but these have not been realized, even though the theory itself
has stood the test of research well.”

Equity Sensitivity: Three Types of Individuals

Benevolents—These individuals are “givers.” They are altruistic and are relatively content with
receiving lower outcomes for their inputs.

Entitleds—These individuals are “takers.” They are concerned with receiving high outcomes,
regardless of their levels of inputs.

Equity Sensitives—These individuals adhere to notions of equity. They become distressed when
feeling underpayment inequity and feel guilt when overrewarded.

Individual differences in equity sensitivity can be measured via self-report instruments (Huseman et
al., 1987; Sauley & Bedeian, 2000). Only the motivation of individuals in the third category, the
equity sensitives, should adhere to the predictions made by the equity theory of motivation.

Expectancy (VIE) Theory of Motivation

One of the most popular motivation theories is expectancy theory, which is also known as VIE
theory, referring to three of the theory’s core components: valence, instrumentality, and
expectancy. Expectancy theory is most often associated with Vroom (1964), although there were
some later refinements and modifications of the theory (Graen, 1969; Porter & Lawler, 1968). Like
equity theory, expectancy theory assumes that workers are rational, decision-making persons whose
behavior will be guided by an analysis of the potential costs and benefits of a particular course of
action. Also like equity theory, expectancy theory focuses on the particular outcomes associated
with a job, which refer not only to pay, but also to any number of factors, positive or negative, that
are the potential results of work behavior. For example, positive outcomes include benefits,
recognition, and job satisfaction, and negative outcomes include reprimands, demotions, and firings.

Expectancy Theory a cognitive theory of motivation that states that workers weigh expected costs
and benefits of particular courses before they are motivated to take action

Valence the desirability of an outcome to an individual

Instrumentality the perceived relationship between the performance of a particular behavior and
the likelihood of receiving a particular outcome

Expectancy the perceived relationship between the individual’s effort and performance of a
behavior

As mentioned, the three core components of expectancy theory are valence, which refers to the
desirability (or undesirability) of a particular outcome to an individual; instrumentality, which is the
perceived relationship between the performance of a particular behavior and the likelihood that a
certain outcome will result—in other words, the link between one outcome (the worker’s behavior)
and another outcome (obtaining recognition or a pay raise, for example); and expectancy, which is
the perceived relationship between the individual’s effort and performance of the behavior. Both
the expectancy and the instrumentality components are represented as probabilities (for example,
“If I expend X amount of effort, I will probably complete Y amount of work”—the expectancy
component; “If I complete Y amount of work, I will likely get promoted”— the instrumentality
component). Expectancy theory states that the motivation to perform a particular behavior depends
on a number of factors: whether the outcome of the behavior is desirable (valence); whether the
individual has the ability, skills, or energy to get the job done (expectancy); and whether the
performance of the behavior will indeed lead to the expected outcome (instrumentality). In research
and applications of expectancy theory, each of the components is measured and a complex
predictive formula is derived.

Consider as an example the use of expectancy theory in studying how students might be motivated,
or not motivated, to perform exceptionally well in college courses. For this student, the particular
outcome will be 216 acceptance into a prestigious graduate (PhD) program in I/O psychology. First,
consider the valence of the outcome. Although it may be a very desirable outcome for some
(positively valent), it is not for others (negative or neutral valence). Therefore, only those students
who view being admitted to a graduate program as desirable are going to be motivated to do well in
school to achieve this particular outcome. (Note: This does not mean that there are not other
reasons for doing well in school, nor that good grades are the only requirements for admission to
graduate school.) For those who desire the graduate career, the next component to consider is
expectancy. Given what you know about your own abilities, study habits, and effort, what is the
probability that you will actually be able to achieve the required grades? Here you might consider
your willingness to sacrifice some of your social life to study more, as well as considering your past
academic performance. Should you say, “Yes, I have the ‘right stuff’ to get the job done,” it is likely
that you will be highly motivated. For those individuals unwilling to expend the time and energy
required, motivation will be much less. Finally, what about instrumentality? It is well known that
there are many more qualified applicants to graduate programs than there are openings. Therefore,
the probability of actually achieving the desired outcome, even if you perform at the required level,
is less than certain. It is here that motivation might also potentially break down. Some people might
believe that the odds are so poor that working overtime to get good grades is simply not worth it.
Others might figure that the odds are not so bad, and thus the force of their motivation, in
expectancy theory terms, will remain strong.

At work, expectancy theory might be applied using promotions, the performance of special work
projects, or avoidance of a supervisor’s displeasure as potential outcomes. For example, if an
employee’s goal is to avoid her supervisor’s criticism (which is negatively valent), she might consider
the expectancy (“Can I perform the job flawlessly to avoid my supervisor’s displeasure?”) and the
instrumentality (“Even if I do an error-free job, will my supervisor still voice some displeasure?”) of
that goal before being motivated even to try to avoid having the boss become displeased. If the
supervisor is someone who never believes that an employee’s performance is good enough, it is
unlikely that the employee will exhibit much motivation to avoid her or his displeasure because it is
perceived as inevitable.

Expectancy theory illustrates the notion that motivation is a complex phenomenon affected by a
number of variables. This theory looks at factors such as individual goals, the links between effort
and performance (expectancy), the links between performance and outcomes (instrumentality), and
how outcomes serve to satisfy individual goals (valence). It is one of the most complicated yet
thorough models of work motivation. The theory has generated a considerable amount of research,
with evidence both supporting (Matsui, Kagawa, Nagamatsu, & Ohtsuka, 1977; Muchinsky, 1977a)
and criticizing certain aspects of the theory (Pinder, 1984; Stahl & Harrell, 1981; Van Eerde & Thierry,
1996). In addition, researchers have noted problems in the measurement of the VIE components of
valence, instrumentality, and expectancy in several studies (Schmidt, 1973; Schwab, Olian-Gottlieb,
& Heneman, 1979; Wanous, Keon, & Latack, 1983). Expectancy theory continues to be a popular
cognitive model for understanding work motivation. Although there is no single agreed-upon
strategy for its application, it does lead to many practical suggestions for guiding managers/leaders
in their attempts to motivate workers (e.g., Isaac, Zerbe, & Pitt, 2001), including the following:

❚ Managers should try to define work outcomes—potential rewards and costs associated with
performance—clearly to all workers.

❚ The relationships between performance and rewards should also be made clear. Workers need to
know that if they achieve certain goals, rewards are sure to follow.

❚ Any performance-related goal should be within the reach of the employee involved.

In sum, both expectancy theory and equity theory are based on cognitive models of motivation. They
assume that individuals are constantly aware of important elements in their work environment and
that motivation is determined by a conscious processing of the information received. The problem is
that some people may simply be more rational than others in their usual approaches to work. The
effectiveness of these cognitive models of motivation is also weakened by the fact that in some
situations, individuals, regardless of their usual rational approach, may behave in a nonrational
manner (for example, when workers become so upset that they impulsively quit their job without
considering the implications). Moreover, there is some evidence that even when people are using
rational means to evaluate a particular situation, individuals vary in the ways that they process
information (see Zedeck, 1977).