[INAUDIBLE] makes us understand where needs come from and where mode of hierarchies come from. What is not quite clear is how that actually influences day-to-day behavior. You might have a very high achievement motivation, but that doesn't mean that you necessarily launch yourself head first into every single opportunity, every single challenge that presents itself to you. So this is exactly where expectancy theory comes in. It explains how people differentiate between situation where they should exert effort, and where they shouldn't. And it provides some great guidance for leaders to think about how to design objectives and tasks in appealing and motivating way for their followers. The theory's developed by Victor Vroom, and he designed it, you guessed it, in the 1960's, the period where everyone was developing motivation theories. And the basic proposition is based on his dissertation work that was quite simple. He basically argued that people prefer some outcomes over others and for preferred outcomes they have a positive, emotional association. This is actually not unlike McClelland's Theory, if you think about it. Now this is what Vroom called valence, so how you feel about a particular outcome. And positive valence would mean you would rather have an outcome than not have it. And a negative valence would me you would rather not have an outcome. So this is the basic idea of valence. Now particular outcomes can have a positive or negative valence, in and of themselves or they could be instrumental to achieve other outcomes. Second degree outcomes, if you will. So I could expect a high bonus at the end of the year, and that could be inherently motivating to me to perform, because big pile of money. Or it could be instrumental to another goal, and that is that I can finally buy the sports car that I always wanted. So this idea of a second degree, this projected second degree consequence we could carry further to a third degree, fourth degree, so on and so forth. If I can buy a sports car, I can impress the ladies. If I can impress the ladies, then you can get the idea. But we keep it simple. According to Vroom's theory, you should multiply a particular first degree outcome's instrumentality for a second degree outcome with the valence of that second degree outcome and if you sum up all those products, you get your total valence. And total valence could be positive or negative. If you have no positive associations at all with the particular outcome you have zero valence, zero motivation. You might have some positive associations, but they might be cancelled, they might be overshadowed by negative balances, and that would also mean zero motivation in the end. So for example, you might offer me a very high paying job for a private military company in a war zone. And the positive valance of that paycheck, of that big money would be overshadowed completely by me constantly fearing for my life everyday on the job and being separated from my family. So this logic, this calculation of valence for particular performance and the outcomes that are associated with that performance, you can apply to any number of situations. Not just choice of jobs, but also prioritization of tasks, work life balance, you name it. All right, so that's the first part of the theory. Second part of the theory is expectancy, and this is people's perception of how likely it is that they will even be able to achieve the goal, or the performance expectation, that is associated with the desired or dreaded outcome. And one way for people to assess that likelihood is to ask themselves, can I actually exert the effort that is required to reach that goal, to reach that performance expectation. And they can look to their perceived abilities into their situation constraints both of which could facilitate or impede the effort that they would have to make. You could offer me a million dollar prize of I can run a triathlon for three hours. I would think about that for two seconds and come to the conclusion that it's not gonna happen. First of all, perceived abilities. I think are the world's slowest swimmers, so I would need half a week to finish the swimming portion alone. And situational constraints, maybe I'm in a situation where I've just completed eating an entire schwarzwalder kirschtorte, and that would clearly impede my abilities. So those two factors together determine how people perceive expectancy, and if they think that expectancy is zero, then again, motivation is zero. Even if the valence of the outcome is very high, as it was in this particular case. So that is the model. Simple, right? We can use it as a starting point for identifying some common issues that leaders encounter as they try to motivate others. And we'll start with the expectancy problems. This is where people ask themselves, can I do it? And the most common issue there is that in many cases, people are not exactly clear what performance expectations they have to fulfill, what goals are actually being set for them. Sometimes the goals are not very clear. Reach a million dollars in sales and get a bonus, that's very clear. But try to stimulate innovation in your team, that's a lot more ambiguous, right, because you don't know, even if you exert the effort, if you try to stimulate, whether that actually happens, right? So this cause of ambiguity can really cause the motivational effect of that goal, of that target, to diminish. And this is why people have advocated for these SMART goals. So this is specific and measure goals, you know how far you're progressing towards achieving a target. It should be ambitious but achievable to be relevant to the person that's pursuing it and should be time so it has a clear deadline. Big question of course, what exactly is ambitious but achievable and what is relevant, right? So that clearly is very much determined by the cultural context of the people that you are trying to motivate. There was this fascinating study a couple of years back of Israeli and Chinese students that were studying in Singapore. And what they found out is that the high power distance environment of the Chinese students actually meant that for them, very ambitious, maybe overly ambitious goals had actually a demotivating effect and made them perform worse. But for the low power distance Israelis, they really thrive from having being said very, very high, very ambitious goals, and ultimately they perform better. So there is a cultural difference there with how people basically assess whether something is still ambitious but not too ambitious, that they stretch but they don't stretch too far and then break their back. So this is the cultural context. Now the SMART goals can help take up some of the expectancy problems. The other part of it is related to these perceived abilities that we talked about earlier. So people might have a certain notion of whether or not they can achieve a particular said goal. So I was working with this manager a couple years back who had a very ambitious goal of reducing by 50% the lead times in all the production facility in his company and people were really taken aback by this and thought, how can you even say such an unrealistic target. There were about ready to set their expectancy at zero, because they didn't think they could do it. But he helped them, he showed them that it was possible. He demonstrated that he had achieved this 50 percent reduction with some facilities already, with the same kind of tools, same kind of resources, that people had in those other facilities. And that helped them through this analogical reasoning, through pointing out that others were able to do the same thing that they were being asked that helped them to revise their image of self efficacy, their perception of their own abilities. And that helped them basically to revise their expectancy calculation, if you will, and boosted their motivation to pursue those goals. So next to the expectancy problems, we have valence problems. So those are the areas where people ask themselves what does it buy me if I reach a particular performance goal or particular performance expectation. What is the outcome that I get form that? And the most frequent issue here is that people often perceive that there is a disconnect between the performance and the behaviors that their leaders encourage them to pursue. And the outcomes that ultimately are given by the organization, the rewards that are ultimately given by the organization. So leaders might encourage a long term orientation but the organization ultimately rewards fulfilling your short term budgetary goals and sales targets. Leaders might encourage team orientation in being a team player, but the organization ultimately evaluates your performance still based on individual criteria. When there is this disconnect, this is what people call the folly of rewarding A while hoping for B. There is clearly a negative consequence in valence. The second problem that can occur, especially into a cultural context, is that not all outcomes are equally valued or positively valanced to all followers. That's the basis of the theory, right? That different people have different preferences for different types of outcomes. If a particular outcome is not positively valanced to some of the followers, what can you do, right? That would mean that they are motivated less. This is where leaders can step in and help translate particular outcomes to make them more relevant more resonant with their followers. So for example, the target could be, the performance target could be cost reduction in a production environment and he outcome would be a bonus at the end of the year. And that for some context might not be very positive valence or not positively valence enough to instill a strong motivation. So what the leaders could do is to point out other outcomes of reaching that performance target. For example, the opportunity to demonstrate the skill and efficiency of the team that has worked on those cost reductions, to basically enhance the status of the group. So basically what we have here is a reframing of what it means to achieve that particular performance goal, that performance expectation that is more in line with the norms and beheld beliefs of the group, right? So to make it culturally more and more resonant. The most important balance related problem though is that with regards to proportionality of rewards. People ask themselves if I perform better, do I get more rewards? And this is a question of equity. Depending on what I put into the job, this connects right back to the effort that you exert. What do we get out of it? And this input to output ratio, so input would be your effort, your experience, your charming personality, output would be salary, bonus, public recognition, career opportunities. That ratio, input to output, is ultimately what is the basis for our assessment of fair treatment, of equitable treatment. And studies have shown that production line workers that get paid by piece rate and they feel that they're being underpaid, actually reduce their input. They reduce the quality that they put in to their work in order to even out the formula again. Now the question is, how do we determine whether that ratio between input and output is fair or not? It can be based on past experience or it can be based on social comparisons. So I can compare my input to output ratio with that of somebody working next to me. If we are both working exactly the same, but the person next to me is earning more than I'm earning, or is getting more public recognition for what they do than I do, then I feel unfairly treated. And this is something that even monkeys do. So there was this wonderful experiment where two monkeys were placed in adjacent cages, both were being given a simple lever task, if they pull the lever, they get a snack. One monkey gets the nut, the other monkey gets a grape, and funny enough, the monkey that gets the nut sees the other monkey getting the grape and they are starting to refuse the tree. They're actually not eating the nut. They're disdaining that nut because they feel inequitably treated. They stop even pulling the lever, they go on strike if you will because they feel they are getting unequal pay to the other monkey. So clearly this is something that's programmed into our heads biologically. But there's also a cultural dimension to that. In many Western countries, Western cultures, we have this idea of proportional rewards, or even exponential rewards to the better performer. Just have to watch Alec Baldwin's famous speech in Glengarry Glen Ross to get this idea that the best performer gets exponentially more rewards than the second best performer, right? So this is not the only norm though, right> In some countries there is a very different understanding of what is considered fair. So what we might judge as objectively inequitable is actually the norm in many Middle-Eastern countries, where even different levels of performance still are perceived to deserve the same level of reward. In East Germany that was actually the case, even a step further that the feeling was that those that actually are stronger that can perform better, they are expected to support the weaker and the less performers. So, this orientation, that particular norm of inequitable rewards has been pointed out by critics as a potential breeding ground for free riding, for demotivation and for ultimately for lacking productivity growth in communist countries. Sometimes these cultural rules for farers and equity can be quite particular. Study of Chinese and US businesses found for example, that in Chinese businesses both the financial and the non financial rewards, so socio-emotional rewards like recognition and status, that those should be given and this is the expectation for employees, those should be given proportionally to the performance of the employees. So if you do better you should get more money and you should get more socio-emotional rewards. If you do worse, you should get less of both. But in US business, there is a distinction. If you do better, you should get more money, but you should still get the same emotional reward, the same socioemotional rewards, as everyone else. And this is what people call the humanist orientation, so they do not doubly punish, if you will, both financially and socio-economically if you're a worse performer. So, that's the idea of standards of failures. And those are deeply held notions, deeply held norms. If you violate them, can really cause friction and demotivation. So we've seen a number of expectancies and a number of valence problems, and we've seen a number of ways they can be tackled, but there's still this darn multiplication problem. You do good in expectancy, but bad in valence, still motivation in zero, you're screwed. If you do good on valence, but bad on expectancy, motivation zero, you're screwed again. So how do you work around that? People have actually found in recent studies that we attempt to compensate, for example, for discrepancy in expectancy. And the way that we do that is essentially through problem solving. If we feel that our situational or personal abilities are not enough to actually reach your performance targets, we exert more of an effort to solve the problem and this is something that leaders can encourage. They can give their followers room to problem solve. They can encourage them to develop abilities to find their way around what they perceive as the discrepancy in their own abilities. And the same thing applies actually for valence, right.? So when people perceive that there's a valence discrepancy, that the negative valence outcomes may be more strong than the positively valanced outcomes. In some cases, they're actually trying to work around that and cognitively held values. The reason through rational for why you want to pursue a particular performance goal, why you want to exert the effort there can actually overpower more intrinsically held believes, and again this is something that leaders can encourage. They can provide the rationale for people to reason their way through why a particular performance target is worthwhile pursuing if those, the rationals, those explicit motives are actually resonate with the culture. So, what do we make of all of this? We've seen that motives and motivations can be influenced by the years. They can be influenced by giving training courses. This can boost the self perceived abilities of followers. This can be achieved through role modeling by the leader, therefore giving more positive valence to particular outcomes. It can be achieved through setting smart goals, but all of these interventions have to be resonant with the cultural environment that followers are embedded in. If strongly held norms and beliefs, for example about fairness and equity, are violated, chances are that motivation attempts drastically fall in their effectiveness and they might even backfire.