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Expectancy theory is a well-known theory of workplace motivation.  Victor Vroom, considered an expert concerning psychological analysis of behavior in organizations, developed Expectancy Theory as a way of defining the central problem of motivation in the workplace (British Library, n.d.).  Today, Expectancy Theory plays a central role in how companies determine what will motivate their employees to be effective and enthusiastic about their work.  The following document will further define expectancy theory and use the theory to explain how Yahoo!’s new CEO, Marissa Mayer, was able to turn the motivation of an entire company around by changing policies.

Expectancy Theory

 Expectancy theory is defined as “a cognitive approach to motivation, emphasizing the importance of thoughts, judgements, and perceptions” (PSUWC, 2015, para. 3). The Business Dictionary (n.d.), defines  expectancy theory as a “motivational theory based on cognitive psychology. I t proposes that people are motivated by their conscious expectations of what will happen if they do certain things, and are more productive when they believe their expectations will be realized” (para. 1).  It is important to note that one of the main assumptions made by expectancy theory is that individuals are rational beings. In this case, before performing tasks an individual will think about what is involved, what they need to do to be rewarded, and how much those rewards are worth. They will then determine whether or not to complete the task (PSUWC, 2015, para. 3). This theory was meant to take into account differences in motivation levels within an individual from task to task, therefore most studies have of Expectancy Theory have been conducted  using within-subject designs rather  than between-subject designs (PSUWC, 2015, para. 10). Expectancy theory studies the source of motivation through the functions of valence, instrumentality, and expectancy. This is called the VIE theory.

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 Vroom’s definition of expectancy is, “a momentary belief concerning the likelihood that a particular act will be followed by a particular outcome” (British Library, n.d.).  In other words, a person is willing to work harder, be more motivated, if they know what they are trying to accomplish can be achieved.  In short, expectancy is the link between effort and performance. Expectancy can be influenced by many factors, including ability, interest, past history, and the constraints of the situation (PSUWC, 2015, para. 3). Lets look at an example. Penny has just completed her freshman year of college. She is in the business program studying finance and has accepted an internship in the finance department of a small company. After a long and stressful summer, she realizes that she has been putting in quite a bit of effort to learn the basics of the finance department, but is still the intern who is struggling the most in the program. Penny returns to school for her sophomore year, and decides to switch her focus to human resources. Her internship in human resources the following summer is fulfilling and enjoyable, and she sees a clear connection between the amount of effort that she puts in, and her performance, which leads to increased motivation.


 Instrumentality can be referred to as an outcome-outcome association (Eerde & Thierry, 1996).  Instrumentality is the link between expectancy and valence in that the modification in behavior leads to an outcome that allows the person to achieve the desired goal (outcome-outcome).  That is to say because the person worked harder, s/he became more motivated (outcome 1) and was ultimately promoted (outcome 2), which was the desired goal.  Furthermore, since the principles of this theory are cognitive in nature, the beliefs that a person has are merely contingencies.  Belief in these contingencies is all that is needed, not the occurrence of such contingencies.


 Valence is the link between what an individual does, and what they receive (PSUWC, 2015, para. 5). The valence of the outcome must be preferred by the person, if it is not, then motivation is minimized.  The valence, or the value of the outcome, is determined by the person’s motives and their perceived reward. If a millionaire was offered $100, they would probably not be motivated as that is not of much value to them. However, a lower or middle income person would greatly value that money and would be more likely to be motivated by that incentive (PSUWC, 2015, para. 5). Valence can be both positive and negative. For example, an employee  can be afraid of being transferred, this is negative valence, however, once he or she is transferred, she may like her new boss, workplace, and employees better and be thankful for the transfer. That transfer is now a positive valence. (PSUWC, 2015, para. 5)  We will see examples of both positive and negative valence in the Yahoo! case study.

Case Illustration

 Yahoo! (Yahoo)  was founded in 1994 and is one of the world’s largest start-up companies (Yahoo, 2015).  They are best known for their internet search engine, although they have also created other products.  The company was very successful in the 1990s, went public on the stock exchange in 1996, began buying other companies to expand, and by 2000 their bubble burst and the company began selling off acquired companies between 2000 and 2010 (Rao, 2011).  In 2012 Marissa Mayer was hired as Chief Executive Officer of Yahoo.  Employees described Yahoo when Mayer was hired as, “employees were aimless and morale was low, and a bloated bureaucracy had taken Yahoo out of competition with its more nimble rivals” (Miller,, 2013, para. 6).  Management, under Project Alpha,  was looking to sell pieces of Yahoo to other companies, close data centers, and lay off thousands of employees and contractors (Carlson, 2015).  The morale issues were thought to be due to the excessive amount of managers brought on for projects, which slowed product development.   Mayer began changing policies, removing the work from home policy, introduced free food in the cafeterias, changed employees cell phones to iPhones and Androids, and created a Friday meeting in which all employees could participate with questions to be answered by Yahoo’s management (Miller & Perlroth, 2013).  Surveys showed that although not all policy changes were popular, the employees felt optimistic about the company’s future (Miller & Perlroth, 2013).

 Expectancy Theory and Yahoo’s New Policies

 Yahoo’s CEO, Marissa Mayer, felt the policy that allowed employees to work remotely, although promoted flexibility, was doing little to help build Yahoo.  As a result, Mayer removed the policy and encouraged the employees to work more in the office (Miller & Perlroth, 2013).  The employees who had worked remotely had no real direction or given set goals in which to accomplish.  By having the employees in the office and interacting with other employees and management, goals became clearer and morale boosted.

 Mayer found that the board and managers, under Project Alpha, were looking to reduce the company rather than looking at the production of employees, ridding the company of poor performers and keeping the high performers.  Mayer quickly diminished parts of Project Alpha and had management recruit high-performers back into the company.  She fought layoffs, even small ones. When employees are assuming they will be laid off it significantly decreases their instrumentality and valence. If it seems that even if they produce valuable work, they will still most likely be laid off,  they are much less motivated.  Instead, she chose to set goals to measure employee performance (Carleson, 2015). Google, another company known for their search engine and other products, used a system called Objectives and Key Results (OKRs) to “measure the effectiveness of its employees, divisions, and the company overall” (Carleson, 2015). The OKR system allowed employees to “come up with a list of quantifiable goals every quarter.”  The list could then be used by management to sign-off on and approve goals, and be seen by the entire company.  The goals are reviewed by the employee and management quarterly and the employee is given a score to to determine their bonus, chance for a raise, transfer, or promotion.  Seeing Google’s success and high morale, Mayer chose to  introduce OKRs to Yahoo as well (Carlson, 2015).

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 Expectancy Theory and Google’s Success

 Marissa Mayer has been able to revamp Yahoo and give her employees a much needed morale boost, which lead to increased motivation. Google has been successful in this regard from the start. Their company philosophy is “to create the happiest, most productive workplace in the world” (Marc, 2014).  One of the main ways they accomplish this goal is by giving employees incredible perks in addition to standard employment benefits. Google provides employees with the standard benefits of insurance, 401k plans, and tuition reimbursement. But, in addition, they provide employees with financial support for adopting a child, free lunch and dinner prepared by a gourmet chef, and on site car washing, oil change services, dry cleaning and much more. Democracy is also a big focus at Google. Employees are encouraged to voice their opinions at open forums every friday, and through frequent company wide surveys. They have an incredibly flexible set up, allowing employees to spend 20% of their work week doing whatever they find enjoyable. They make sure that employees are working on fulfilling projects, and are free to approach their work in whatever way they would like.  

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In conclusion, it appears that Marissa Mayer’s “all hands on deck” approach for workers to report to work and abolish all work-at-home arrangements is a prime example of Expectancy Theory.  Expectancy “is a belief about the future”(PSUWC, 2015, Para. 3).  Ms. Mayer’s perceptions and beliefs of Yahoo’s future reflect that of growth and success.  Instrumentality in our case study is the execution of Ms. Mayer’s policy changes, they were the external motivator for employees to return and produce more at work. Valence is a measure of one’s efforts at work and their satisfaction level of what has been invested into work.  As Yahoo employees continue to work in the office they become more and more invested in the company and their co-workers.  Thus, working towards the greater goal of changing their company.  Our case study reflects this by stating,  “A recent internal employee survey found that 95 percent of employees were optimistic about the company’s future, a 32 percent bump from the previous survey” (Miller & Perlroth, 2013).  Furthermore, Ms. Mayer’s policy changes appear to have increased worker connectivity, worker production, and worker morale. Google has shown that they have had a firm grasp on employee motivation from the start. Their employees are able to see high level of valence in their work, as they are given freedom to choose their own projects and how they want to approach these tasks. Instrumentality is high, because of the of the incredible amount and variety of reward system that are in place at Google. Expectancy is also high because of how relaxed and free the work environment has been shown to be. When employees are allowed to work on their preference of tasks, it is much easier for them to see the connection between their effort and performance.



British Library (n.d.) Victory H. Vroom. Retrieved from

Carlson, N. (2015). The Day Marissa Mayer’s Honeymoon at Yahoo Ended. Business Insider.  Retrieved from

Eerde, W. V. & Thierry, H. (1996). Vroom's expectancy models and work-related criteria: A meta-analysis. Journal of Applied Psychology, 81(5), 575.

Expectancy Theory (2015) In Business Dictionary online.  Retrieved from

Marc. (2014). The Google way of motivating employees. Entrepreneurial Insights.  Retrieved from

Miller, C.C. and Perlroth, N. (2013). Yahoo Says New Policy is Meant to Raise Morale. The New York Times.  Retrieve from

Pennsylvania State University World Campus (PSUWC) (2015). Lesson 4: Expectancy Theory: Is there a link between my effort and what I really Want? PSYCH484: Work Attitudes and Motivation. Retrieved from

Rao, Leena (2011). The Rise and Fall of Yahoo:  The Infographic. Tech Crunch. Retrieved from

Yahoo (2015). About Us:  Who We Are. Retrieved from

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