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The Expectancy-Valence Model of Motivation Revisited :

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The Expectancy-Valence Model of Motivation Revisited

Τουριστική επιστημονική επιθεώρηση The Expectancy-Valence Model of Motivation Revisited : A Case Study from the UK Hotel Industry
George Kominis (University of Glasgow)*
Clive R. Emmanuel (University of Glasgow)**
Περίληψη Η παρούσα μελέτη εξετάζει στο πλαίσιο ενός case study την μορφή και την επίδραση των συστήματων μέτρησης, αξιολόγησης και υποκίνησης της αποδοτικότητας, όπως αυτά εφαρμόζονται σε επίπεδο στελεχών μεσσαίας βαθμίδας σε μία αλυσίδα ξενοδοχείων στην Μεγάλη Βρετανία. Αρχικά παρουσιάζεται ένα θεωρητικό μοντέλο υποκίνησης από τον χώρο της εφαρμοσμένης οργανωτικής ψυχολογίας, το οποίο δίνει έμφαση στην σημασία των συνειδητών πεποιθήσεων του ατόμου για την διαμόρφωση της υποκίνησης και της απόδοσης του. Εν συνεχεία, το case study αποκαλύπτει την πολυπλοκότητα της διαδικασίας της υποκίνησης στο μέσο διοικητικό επίπεδο, αναδεικνύοντας ταυτόχρονα τον κεντρινό ρόλο των συστήματων μέτρησης, αξιολόγησης και υποκίνησης απόδοσης στην διαδικασία αυτή. Με βάση τα συμπεράσματα του case study επιχειρείται τελικά μία επέκταση του αρχικού θεωρητικού μοντέλου. Σε τελική ανάλυση, το προτεινόμενο μοντέλο προάγεται ως ένα πιο πλήρες θεωρητικό πλαίσιο για την μελέτη του φαινομένου της υποκίνησης στο διοικητικό επίπεδο. Key words : expectancy theory, UK hotel sector, managerial motivation, incentives. ------------------------------------------------------------------ * Lecturer in Accounting, Department of Accounting & Finance, University of Glasgow. ** Professor of Accounting, Department of Accounting & Finance, University of Glasgow. Information for this case study has been mainly collected from a dissertation undertaken at the Department of Accounting and Finance of the University of Glasgow (Georgiou, 1989) and supervised by one of the authors. The authors therefore gratefully acknowledge Mr. Georgiou’s contribution to the realisation of this study. Περίληψη Introduction There is an almost universal recognition in the management control literature that, particularly in the context of the contemporary multidivisional decentralised company, the motivation of middle-level managers becomes an issue of paramount importance. Merchant (1989), for example, argues that the considerable distance between the organisation’s top- and lower-level management and the consequent information asymmetry make the direct monitoring of the actions of middle-level managers expensive and, occasionally, infeasible. In this context, the control of the managers’ actions becomes indirect, and involves top management influencing managers’ effort and subsequent performance through appropriate motivation and control systems. Hopwood (1974) suggests that this is mainly attained through the provision of rewards by the organisation to the managers, or, more correctly, through the written and unwritten promise of rewards for expected results (Emmanuel et al., 1990). Expectancy-Valence (E-V) theory provides a well-established framework of the process of motivation. E-V represents essentially a behavioural version of the rational choice model in economic decision making (Singer & Coffin, 1996). In line with classic economic theory, and in the same ‘utility maximisation’ spirit, it basically predicts that individuals act so as to maximise the perceived value of the rewards that they expect to receive (Ferris et al., 1980). Despite E-V’s general appeal, the empirical literature in support of the theory has produced only modest results. A number of authors in the area of management control argue that this reflects the lack of complexity of traditional expectancy theory models (Kopelman & Thomson, 1976 ; Ferris, 1977), and in particular the inattention to the impact of the control mechanisms that organisations typically employ to motivate their employees (Jiambalvo, 1979). This study examines such claims. Firstly, the expectancy model of motivation in its traditional version is presented, with some emphasis given on the major assumptions underlying the theory. The second section describes the research method used and the research site where the data were collected. This is followed by a case study from the UK hotel sector which illustrates the role that systems of performance evaluation and reward play in the process of motivating middle-level managers. The final section of the paper attempts to use the insights gained from the case study to revise the E-V framework. Directions of future research using the extended theoretical framework are also proposed. Περίληψη The Expectancy-Valence Model The Expectancy-Valence model refers to a set of rational-based, cognitive-oriented, process theories of work motivation and performance which have their conceptual roots in Lewin’s (1938) motivational analysis of social behaviour and Tolman’s (1951) cognitive-based model of motivation. As Ferris (1977) notes, the common thread of these theories is a central expectancy core, the essence of which holds that human behaviour in the organisational context is primarily conscious, rational and goal-directed. People’s behaviour within organisations is directed by the conscious expectations that they have about their behaviour leading to the attainment of personal goals and the achievement of desired outcomes (Buchanan & Huczynski, 1997). E-V theory is essentially built around six major assumptions about the underlying causes and mechanics of human behaviour which basically hold that

  • every manifestation of human behaviour is most appropriately seen as the result of the interaction between the individual and the specific environment within which he exists and acts (Lewin, 1935). In essence, the individual’s behaviour is thought of as being jointly shaped by a variety of situational factors and idiosyncratic variables which “in a dynamic state affect the individual’s motivational force” (Steers & Porter, 1979, p.210) (the person-environment interaction).
  • different environments are likely to affect similar people in a different way, and different people may behave differently under similar environmental conditions. That is, they may exhibit different patterns of interaction with the given environment in relation to their own personal needs, preferences and expectations (Lawler, 1994) (the individual differences factor).
  • the individual’s behaviour is primarily shaped by the individual’s own perception of the reality in which he exists and operates, rather than by the actual objective reality itself. Although the objective reality of the situation clearly plays a decisive role in the determination of the individual’s perception of that situation, the individual responds ultimately to his own - individually ‘enacted’ - perception of the situation he is in, rather than to the ‘objective’ situation (Nadler & Lawler, 1977) (the criticality of individual perception).
  • the desire for pleasure and the realisation of pleasurable outcomes - and, conversely, the aversion for pain and the realization of unattractive outcomes - are perceived to be the primary motivators of behaviour. Human behaviour is fundamentally directed toward outcomes that provide pleasure and away from those that produce pain (Atkinson, 1964) (the hedonistic element).
  • behaviour results from a conscious, rational decision-making process, which is fundamentally based on the individual’s subjective probabilities (perceptions) about the different results of alternative behaviours. Although people are seen to make these decisions under conditions of “bounded rationality” given their limited cognitive response capacities and computational abilities (Simon, 1957), they are still assumed to consider a number of alternative courses of action before they act. People always select the action that they perceive to be more likely to lead to their personal goals (Lawler, 1994) (the rationality and goal direction element).
  • people are seen to be able to learn to anticipate future pleasant and unpleasant outcomes on the basis of their past experiences and present needs, and choose among the different alternative behaviours accordingly (Porter & Lawler, 1968) (the cognitive element).
Structured around these six fundamental behavioural premises, and on the basis of an operational definition of man as goal oriented, need satisfying, and as one who interacts with his environment in a “rational” manner (Wanous, 1972), E-V theory’s basic tenet is that individuals within organisations must always be expected to act in the way that they perceive will maximise the perceived value (or valence) of the rewards or outcomes that they expect to receive (Nadler & Lawler, 1977 ; Ferris, 1977). In work situations in the organisational setting, people are seen to be faced with a number of possible behaviours, essentially with a number of choices to perform at different levels of effort. In this context, people are seen to weigh the potential outcomes of the different courses of action, choosing to engage in the behaviour (and exert the level of effort) that they perceive will provide them with rewards and outcomes that they need and, subsequently, value (Atkinson, 1964). Thus, within the context of E-V the individual is theorised to make his behavioural choices in accordance with
- his anticipated preferences (valences) among the different resulting outcomes, preferences that are believed to relate to the individual’s personal needs,
- his forward-looking subjective probability estimates (expectancies) about the attainment of these outcomes in the environment in which he operates. These estimates are thought to be formed on the basis of the individual’s prior experiences of interaction with the given environment (Porter & Lawler, 1968). ------------------------------------------------------------------------- Identifying male employees is merely a convenient means of expression. Female employees are recognised as equally important. On these conceptual grounds, initially Georgopoulos et al. (1957), and subsequently Vroom (1964) and Lawler and Porter (1967) formally articulated E-V theory, positing that the level of motivation or effort (M) the individual is willing to exert in his job is a joint function of the individual’s own perceptions about
i) the perceived value (valence) of the rewards or outcomes that he expects to receive in the context of this job (V), and
ii) the perceived probability (expectation or expectancy) of actually receiving these rewards or outcomes if he expends that amount of effort in his job (EΰR). Notationally, this can be expressed as follows : Overall, expectancy theory makes a simple, though attractively logical, prediction about human motivation in the workplace, on the basis of which the individual asks himself two related questions :
“If I expend the effort, will I actually get the reward ?” (effort-to-reward expectancy)
“Is the reward that I will get, a reward that I personally value ?” (perceived valence of reward).
The level of motivation that the individual experiences in the context of his job is then expected to be greater,
(i) the more he values the outcomes or rewards associated with his job, and
(ii) the more he believes that the intended effort on his part will lead to the specific outcomes or rewards. It is worth emphasising at this point the multiplicative aspect of the model, as depicted in equation (1). This multiplicative combination of the terms that are hypothesised to determine the individual’s motivation follows from the recognition that unless all variables (valences and expectancies) are present in some degree, there will be no motivational force on the individual. In other words, each variable alone is a necessary but not a sufficient condition for motivation. If a person values highly the rewards potentially available to him in his work environment, but, at the same time, believes that their attainment is in no way dependent on his effort expenditure, then this person’s motivation is expected to be zero. In like manner, even if a person believes that his intended effort is likely to lead to the rewards, he may still experience a low level of motivation if these rewards have very low value for him. Περίληψη Research Method & Site Data for the study was collected by means of an analytic questionnaire that was administered to a sample of 36 middle-level managers in an enterprise from the UK hotel sector (Georgiou, 1989). The questionnaire was specifically developed to capture the perceptions of hotel managers in three main areas of interest relating to the perceived function of the performance measurement, evaluation and reward system (PMERS) within the company, the design and implementation characteristics of the system, and its perceived effectiveness in practice. It correspondingly comprised of three separate sections that required hotel managers to respond to both pre-coded and open-ended questions pertaining to the issue under investigation in each section. The instrument was initially discussed with the company’s Hotel Operations Director, subsequently pilot tested by three hotel managers in the company, and finally administered to all the 36 hotel managers in the organisation. Prior to the posting of the questionnaire, all participants were sent a letter of introduction that provided information about the researcher and the scope of the study, as well as explicit assurances of anonymity and response confidentiality. The letter also informed the managers that the survey instrument had obtained the approval of the company’s top management, and that participation was entirely voluntary. A total of 18 completed questionnaires were returned to the researcher within approximately 6 weeks from the day of their administration to the company, yielding a 50% overall response rate. In addition to the data collected from the hotel managers in the organisation, a slightly modified version of the questionnaire was also completed by four members of the company’s top management team (comprising the Chairman, the Managing Director, the Hotels Division Director, and the Hotels Division Financial Accountant), with the intention of capturing their views on the formal design and intended purpose of the PMERS. Περίληψη Case Study Company Profile Firm Sigma is a UK-based, publicly held since 1972, corporation, with its headquarters in the northern part of the United Kingdom. Founded in the late 1940s, the company started initially as a single restaurant and expanded during the 1950s into the hotel industry, which remains the company’s core activity to date. During the 1960s the company entered the casinos market, and throughout the 1970s and 1980s it continued to diversify its operations through a series of acquisitions, initially penetrating into the restaurants and the public houses markets, and more recently into the nursing homes market. All in all, the group is organised in a free-form multidivisional structure (Williamson, 1970 ; Williamson & Bhargaval, 1972), similar to the one diagrammatically illustrated in the organisational chart of Figure 1. Firm Sigma regards each division as a decentralised, semi-autonomous responsibility unit, with its own headquarters and independence regarding trading and investment decisions, subject to some accountability to the centre. The Hotels Division, which is the focus of this case study, comprises of thirty-six hotels that historically account for a substantial proportion of Firm Sigma’s bottom-line results, on average about 54% of the Group’s annual turnover and operating profit during the 4-year period examined (1988-1991). In the last two years, however, the division has suffered an alarming 2.4% decrease in its turnover, which has push down its operating profit dramatically, by more than 74%. As a result, Firm Sigma has recently decided to dispose of five of its hotels that reportedly did not meet the company’s performance criteria. Performance Measurement Evaluation and Reward System (PMERS) The company implements distinct performance measurement evaluation and reward systems (PMERSs) in each division for the control and motivation of its middle-level managers. The PMERS designed for the Hotels Division applies to all the firm’s hotel managers on a uniform basis, subject to the manager having met the sole qualification for award eligibility of three months service in his current position . Overall, Firm Sigma’s top management admits the intention to design and use the PMERS within the Hotels Division as a motivational device. Indeed, the great majority of both top- and middle-level managers surveyed seem to agree that the PMERS’s main aim is to increase hotel managers’ effort, and direct it towards predetermined, ---------------------------------------------------------------------------------------- As all the hotels in the division operate under a virtually identical framework of control, authority and responsibility, hierarchical structure, etc., comparisons among these similar units, which effectively differ only in terms of their size and geographical location, are warranted. organisationally desirable objectives. According to top management, the system’s main strength lies in its simplicity and transparency, as it is seen to “…clearly lay down the rules of the game”. The system identifies profitability as the major performance evaluation criterion, and it accordingly measures and rewards the managers’ performance on the basis of the financial performance of the hotel they manage. Hence, the indicator of the manager’s performance is essentially the profit contribution of his unit, as compared with the budgeted level of profit of the unit in question. The process of setting the performance targets for the year ahead involves active participation on the part of the hotel managers with the intention of increasing the commitment to and internalisation of these targets. According to the company’s top executives, each hotel manager plays a decisive role in the preparation of the profit budget of his unit, as he is expected to initially submit and subsequently agree with the area manager the profit targets for the next financial year. This is undertaken in a formal meeting that typically takes place before the commencement of the year to which the targets refer. The PMERS includes an incentive scheme that links the manager’s performance with the award of a cash bonus in a straightforward manner, in an attempt to maximise the system’s motivational impact. This performance-related bonus is effectively calculated on the basis of a graded percentage of profit contribution over the budgeted level of profit of each hotel. As shown in Table 1, the percentage applied to the excess earned varies according to the percentage actual results exceed the budgeted profit target. The hotel manager is awarded 10% of the first 10% of profit increase on the profit target ; 15% of an increase over the target of between 10% and 20% ; and 20% of any increase over and above the 20% improvement relative to the budgeted level of profit performance. The company’s top executives emphasise that both the size and the form of the reward have been carefully selected to offer an incentive scheme meaningful to hotel managers. The bonuses available are awarded annually and in cash by the company, with the maximum annual bonus having the potential to reach twice the level of the manager’s salary. It is also implicitly recognised in the company that progression through the organisational ladder is directly linked to the same performance measure that determines the cash bonus award. To examine whether the company’s PMERS actually has a positive impact on hotel managers’ motivation, it is necessary to gauge how the hotel managers themselves perceive the system and its efficacy in measuring, evaluating and rewarding their performance in practice. The next section therefore examines the hotel managers’ perceptions of the company’s PMERS, and, further, attempts to gauge how these perceptions are likely to affect managers’ motivation according to the E-V model presented earlier. Hotel Managers’ Views of the PMERS Nadler and Lawler (1977) maintain that “…it is the perceptions of people that basically determine their motivation, not reality” (p. 32). In a similar vein, the main message of E-V is that, the individual ultimately responds to his own - individually ‘enacted’ (Weick, 1969) - perception of the situation he is in, rather than to the ‘objective’ situation itself. It is therefore essential to examine the hotel managers’ perceptions of the company’s PMERS before we draw any conclusions about the system’s motivational impact and effectiveness. With regard to the perceived function of the PMERS within Firm Sigma, the great majority of the hotel managers surveyed (88%) agree with top management that the system serves a motivational purpose, aiming at increasing the level and controlling the direction of the effort hotel managers put into their job. As far as the design of the PMERS is concerned and the way managerial performance is measured and evaluated, managers seem to generally (81%) agree with the notion that profitability (defined either as profit growth, sales growth, or R.O.I.) is the major indicator of managerial performance within the present system. In addition, most of the hotel managers in the sample (82%) appear to be aware of the formula connecting these financial performance measures and the cash bonus offered by the company. This seems to have a positive impact on the perceived transparency of the system, which is reflected in the widespread perception amongst the hotel managers in the sample (76%) of a direct relationship between evaluated performance and rewards (such as annual cash bonus and promotion). The motivational benefits presumably gained from this perceived transparency of the performance evaluation process, however, seem to be cancelled out by the general discontent hotel managers express with regard to the use of qualitative measures of performance within the company’s PMERS. A large degree of ambiguity is evident about the role of these qualitative measures. Although 76% of the managers confirm that some sort of qualitative criteria (such as customer complaints, maintenance and housekeeping standards, and capital expenditure levels) are used in conjunction with the financial performance measures for the evaluation of managerial performance, no respondent lists the same qualitative measures. The majority of the managers (84%) seem not to have a clear idea of what specific qualitative criteria they are assessed on. Furthermore, only 35% of the managers see these qualitative measures being properly incorporated within the formal performance evaluation process. When asked about the role of the qualitative measures in the determination of their bonus, managers express the view that these qualitative factors are applied on an ‘ad hoc’ basis rather than uniformly throughout the Hotels Division ; and that they are taken into account only when top management is “looking for a reason not to give a bonus”. From a motivational point of view, these perceptions can be seen to undermine the credibility of the performance evaluation process within the PMERS. Only 40% of the managers believe the performance outcomes considered within the present system are within their control. With regard to the target setting process within the PMERS, hotel managers confirm top management’s claims about a high level of participation in establishing the performance targets for the forthcoming year - 94% of the managers report that they are actively involved in the preparation of their hotel’s budget. Most of the hotel managers (71%), however, express their concern about the fact that these original, mutually agreed, budget targets, are re-evaluated at the half-year point, and can be revised by either the area manager, the operations director, or the managing director without any right of appeal by the hotel manager. Moreover, there is general feeling amongst the managers surveyed that this revision of the targets is carried out by top management alone, without any participation by hotel management whatsoever. The perceived intention of the revisions is to prevent too many managers from achieving their targets and reaping the related rewards. As one of the respondents graphically puts it, “whenever a hotel manager approaches his target, the carrot is pushed further ahead !”. Lastly, there is a definite divergence of opinion between top- and middle-level management regarding the attractiveness of the company’s reward package - only 41% of the managers in the sample categorically report that they receive a competitive reward package for the job they undertake, with 65% of them reportedly not sure whether the rewards offered are large enough to induce them to behave more competitively. In fact, only 40% of the managers find the rewards offered meaningful as regards their size. Περίληψη Managerial Motivation and PMERS Firm Sigma highlights a number of interesting issues. First, the central role of the PMERS in the motivation of middle-level managers is confirmed in this company. Both top- and hotel managers have little doubt that the central aim of the PMERS is motivation, that is, to induce hotel management to behave in ways that contribute positively to the overall organisational effectiveness. This is consistent with the assertions of many authors in the management control literature (Hopwood, 1974 ; Merchant, 1989 ; Emmanuel et al., 1990 ; Simons, 1995) about the function of the PMERSs as facilitating motivational contracts within organizations. A second noteworthy observation is that the impact of the PMERS on managers’ motivation is largely dependent on the managers’ views on the PMERS’s efficacy to equitably measure, evaluate and reward their effort and performance. Firm Sigma illustrates that there may be a significant difference of opinions between top- and middle-level management concerning the perceived strengths and weaknesses of the company’s PMERS. However, as organisational psychologists (Porter et al., 1975 ; Nadler & Lawler, 1977 ; Steers & Porter, 1979) have long recognised, the individual’s behaviour is more likely to be shaped by the individual’s own perception of the reality in which he exists and operates, than by the actual objective reality itself. In the context of managerial performance evaluation and reward, this implies that the actual effectiveness of the PMERS to motivate the organisationally desirable behaviour lies not as much on the objective technical robustness of the system, or how top management perceives it, but rather on the perceived efficacy of the system as this is perceived by those the system is expected to motivate. Expectancy-Valence theory provides a general framework for considering the effect of the individual’s perceptions on his motivation, and highlighting the factors that may drive or impede his motivational force in the workplace. The emphasis of the E-V model on the individual’s preferences among different rewards (V), and on his path-goal perceptions (EΰR) is well-placed. In the managerial setting, however, as the case study illustrates these perceptions can be shaped by a multitude of factors relating to the way the manager’s performance is evaluated and rewarded through the company’s PMERS. First, the way the PMERS is perceived to measure and evaluate managerial effort and performance is expected to impact on the manager’s (EΰR) perception. Performance measures define the dimensions of performance that are essential for the organisation’s success, and also highlight the path the manager has to follow to obtain whatever rewards are offered by the PMERS. In Firm Sigma, the confusion surrounding the use of qualitative performance indicators and the ambiguity concerning what specific qualitative criteria are in place and how they are incorporated within the formal performance evaluation and reward process, is likely to have perplex the managers about which are the essential performance dimensions they need to concentrate on. Such confusion about the specific areas the manager has to perform at in order to receive the rewards offered by the PMERS is almost certain to have blurred the manager’s path-goal (EΰR) perception, that is, his perception of how his expended effort can actually lead to rewards. Clearly, the manager’s perception about how his effort is captured by and reflected in the performance measures of the PMERS affects his effort-reward (EΰR) expectancy, and, through that, his motivation. Similarly, the way performance targets are set within the PMERS will affect the manager’s perception about whether his expended effort can lead to rewards (EΰR). Performance targets essentially define the organisationally desirable level of performance that the manager has to attain to receive the rewards available in the PMERS. In Firm Sigma, views of pseudo-participation in the target setting and revision process are likely to have obscured further the perceived (EΰR) link regarding how much effort is required to obtain the PMERS-administered rewards. Regardless of the level of participation in the target setting process, when the targets set are consistently revised at the half-year point without any input on the part of the manager involved, the manager will be unsure about the attainability of these targets and about whether his intended effort can suffice for the attainment of the offered rewards. In addition, such autocratic behaviour in the target setting and revision process, with top management simply dictating the targets to the middle-level managers responsible for achieving them, is likely to negate any intrinsic motivational drivers associated with feelings of ego-involvement and needs of self-determination and self-actualisation (Deci, 1972 ; Amabile, 1983 ; Hunt, 1992) that can be present in the target setting situation. Lastly, the type of the rewards offered through the PMERS, and the way they are administered to middle management will jointly influence the manager’s V and (EΰR) perceptions and his subsequent motivation. The perceived transparency of the PMERS, and the widespread perception amongst the hotel managers in Firm Sigma of a direct relationship between evaluated performance and rewards, is likely to reinforce the manager’s (EΰR) perception, that if he expends the necessary effort he will receive the rewards available. However, the managers’ admission that the extrinsic rewards offered are immaterial implies a relatively low valence (V, perceived value) for the company’s reward package, and a correspondingly negligible impact on the managers’ motivation. In addition, the excessive emphasis of Firm Sigma’s PMERS on extrinsic rewards may conceivably be undermining other motivational factors of a more intrinsic nature, such as needs for achievement and recognition (McClelland et al., 1953) competence (White, 1959), or feelings of self-fulfilment, worthwhile accomplishment and mere joy one gets from performing a challenging task (Turney, 1974), factors which are arguably highly relevant in the context of a hotel manager’s job. Overall, the Firm Sigma case seems to indicate that the traditional E-V model may be too general and not complex enough to study the phenomenon of motivation at the managerial setting. We argue that this lack of complexity reflects mainly the model’s inattention to the central role of the PMERS in the motivation of managers, and the whole network of complementary and compensating relationships that emerge in the performance evaluation and reward process and eventually determine the manager’s level of motivation and subsequent performance. Jiambalvo (1970) made an attempt to increase the complexity of the E-V framework and thereby its application to real organizational problems by expanding it to include “…the major organisational mechanism linking job effort and rewards in organizations, that is, the performance evaluation system” (p. 437). Along these lines, the next section offers an extension of the traditional E-V model that arguably provides a conceptually richer theoretical platform for the investigation of motivation at the middle management level. Περίληψη The E-V Model of PMERS-Directed Behaviour Conventional E-V models (Vroom, 1964; Lawler & Porter, 1967) identify the individual’s perception about whether his Effort expenditure will lead to the Rewards available (EΰR) as a vital factor affecting his decision about how much effort (energy) he will eventually expend. The proposed E-V model of managerial motivation departs from this traditional E-V theorisation because it acknowledges that this particular perception (EΰR) in the context of the middle manager’s job is critically related to the PMERS. Given the central role of the PMERS in the motivation of managers, we argue that the manager’s general perception about whether his intended effort can lead to the rewards offered by the organisation (EΰR) will inevitably relate to the manager’s perceptions about the PMERS’s efficacy to accurately measure, evaluate and reward his effort. Hopwood (1974), Otley (1987) and Merchant (1989) all agree that the typical PMERS is essentially a three-step sequential process that involves :
  1. a definition of one or more measures of performance that can encapsulate all the areas / dimensions that are essential for the organisation’s success, and can accurately assess the manager’s performance in each of these areas,
  2. the description of the standards of performance that can define the organisationally desirable level of performance in all these essential areas, and distinguish between deficient, acceptable, and superlative managerial performance, and
  3. an explication of the process through which the organisational rewards will be administered to the manager on the basis of his accomplishment of the predetermined performance targets on the identified performance measures, so as to urge him towards such accomplishment.
On the basis of this conceptualisation of the PMERS, the expectancy model developed in the present study to explain the phenomenon of motivation at the middle management level departs from the traditional E-V framework in two meaningful ways. First, it breaks down the basic expectancy component (EΰR) into three separate individual expectancy variables or managerial perceptions. These essentially relate to the three major stages of the typical PMERS as presented above, that is, the setting of performance targets (EΰP), the evaluation of managerial effectiveness through performance measures (PΰEP), and the allocation of organisational rewards on the basis of the manager’s evaluated performance as compared to the predetermined targets (EPΰER). Second, it specifically incorporates the possibility of the manager’s motivation being driven by factors other than the extrinsic rewards (EV) that are administered through the company’s PMERS. The inclusion of the variable IV (Value of Intrinsic Rewards) suggests that motivation may also be triggered by a second type of reward that is not provided by any external agent, but is self-administered to the person’s own behaviour. Particularly in the context of the middle manager’s task environment, where feelings associated with goal achievement, recognition and self-actualisation from one’s job are highly relevant, intrinsic factors can arguably have a significant motivational potential and need, therefore, to be specifically considered. Thus, the enriched model postulates that the manager’s motivation to perform is jointly determined by
  • the manager’s subjective belief about whether or not he can actually reach the organisationally desirable targets of performance that are as defined by the PMERS, if effort is expended
    (Perception about the Attainability of Standards or (EΰP))
  • the manager’s subjective belief about whether or not his actual performance is captured accurately and evaluated properly by the measures of the PMERS
    (Perception about the Accuracy of Measures or (PΰEP))
  • the manager’s subjective belief about whether or not the rewards he receives are contingent on his PMERS-evaluated performance
    (Perception about the Dependency of Rewards on Individual Performance or (EPΰER))
  • the manager’s subjective belief about the value of the extrinsic rewards that are distributed to him by the PMERS
    (Perception about the Value of Extrinsic Rewards or EV)
  • the manager’s subjective belief about the value of the intrinsic rewards that are associated with his job (Perception about the Value of Intrinsic Rewards or IV).
Περίληψη Summary and Conclusions E-V theory provides a conceptually appealing interpretation of the process of motivation in the managerial setting, but research in this area has failed to provide conclusive evidence to empirically support the theory. In this paper, we argue that this reflects the lack of complexity of the traditional E-V model, and specifically its inattention to the pivotal role that the PMERS can play in the motivation of managers. The case study from the UK hotel industry shows how the PMERS can impact on middle managers’ motivation, mainly through the managers’ perceptions about the attainability, accuracy and transparency of the system. We have then attempted to use the insights gained from the case study to revisit the traditional E-V framework, introducing an extended E-V model that incorporates the role of the PMERS in the motivation process and thereby provides an arguably more complete framework for the study of motivation in the managerial setting. Future research could be concerned with the replication of this study in different settings, first, to support the importance of the PMERS’s attainability, accuracy and transparency as highlighted in the proposed model, and second, to uncover other critical PMERS attributes for the motivation of managers. Given the limitations associated with the study of a single case, such replication is seen as essential if analytic generalisation of the proposed model is to be achieved. Future research endeavours could also consider the empirical testing of the hypotheses that directly derive from the proposed model, examining the impact of the identified PMERS-related perceptions on the manager’s motivation in a variety of different environmental and cultural settings to ascertain the reliability of the model. Towards this end, research efforts should initially be directed towards the development of instruments that can operationalise and measure the variables identified in the study. Indeed, there is a large body of empirical literature in the area of expectancy theory, utilising survey or experiment / quasi-experiment methodologies, that could provide some starting points for this endeavour. Another worthwhile avenue for further research would be to consider theoretically and examine empirically the moderating effect of situational variables (such as the uncertainty in the manager’s environment, the structure, strategy and culture of the organisation) or more idiosyncratic parameters (e.g., the manager’s abilities, skills, and personal traits, his cultural and educational background, personality type, and cognitive style, etc.) on the manager’s perceptions about the PMERS. Such extensions may provide a more clear and complete picture of the multitude of variables that have a bearing on the eventual motivational effectiveness of the PMERS to instigate the desirable, functional behaviour at the middle management level. Περίληψη References Amabile, T.M. 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