# Pay for Performance Expectancy Theory

Theories related to a Pay for Performance and apply them in various work and non-work settings.

Part 1: Briefly explain what Expectancy Theory is and define the three factors (i.e., valence,
instrumentality, and expectancy) and Explain the chore that you had to do for pay. Then, evaluate the pay system for
doing a chore around the home (mowing the lawn) using the three factors. You must be clear of what valence, instrumentality,
and expectancy factors are in your example. You also have to be clear about whether these
factors were high or low, and thereby whether the system motivated you or not

Part 2: assume that you are an owner of a large daycare center in the Central Texas
area. There are about 2,000 kids in the center, and you employ about 400 daycare teachers.
Your daycare center is the top choice among parents with young kids because you are well
known for providing a reasonable quality service for a very low price. The monthly daycare fee
for your center is, in fact, the lowest among all the daycare centers in the area.
To appreciate the hard work that daycare teachers do and to motivate them to work harder, you
are planning to implement the Employee of the Year Award starting next year. However, since
your competitive advantage is providing the service at a lower price, you do not want the prize
of this award to be costly. Describe your plan for the award and evaluate the award from the
Expectancy Theory perspective. Follow the below two steps in completing this task

Step 1) Describe your plan. Make sure that you provide answers to following questions.
What will be the prize? What will be the selection criteria for the award winner? How many
winners? Keep in mind that you do not want the cost of the prize to be too high.

Step 2) Evaluate the award program from the Expectancy Theory perspective. Evaluate the
program using all three factors (i.e., valence, instrumentality, and expectancy) in the
theory. Again, you must be clear of what valence, instrumentality, and expectancy factors
are in your evaluation. You also have to be clear about whether these factors are high or
low, and thereby whether the award will motivate the daycare teachers or not. If you do
not have a clear understanding of this, go back to the pay raise example in your class slides
and notes. You need to do something similar to how I have explained the Expectancy
Theory using the pay raise example. All that needs to be changed is what is being
evaluated. Now, you are evaluating the Employee of the Year Award program instead of the
pay raise system.