Applying the Expectancy Theory to Explain the Motivation of ..., Exams of Business Fundamentals

Download Applying the Expectancy Theory to Explain the Motivation of ... and more Exams Business Fundamentals in PDF only on Docsity! MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 170 MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 Applying the Expectancy Theory to Explain the Motivation of Public Sector Employees in Jordan Mira Nimri Aya Bdair Hamzeh Al Bitar Department of Business Administration, King Talal Faculty of Business and Technology, Princess Sumaya University for Technology, Amman, Jordan Introduction The Hashemite Kingdom of Jordan has been facing a number of serious problems. Since its independence in 1946, it has suf- fered from several wars, a lack of natural resources, and multi- ple refugee crises. The recent turbulences that resulted from the Arab spring have also had a great economic impact on the country, such as an overload of refugee capacity and a nega- tive effect on tourism. Unfortunately, all these problems that hindered progress and development could not be controlled. However, one of the main problems that impact the country is one that is fully within control yet seems impossible to solve, that is, public sector performance. Standing at a rate of over 40% of total employment with approximately 225,000 employ- ees, it is clear that one of the first noticeable problems is over- hiring with continuous decline in the quality of services. This causes a long list of serious problems affecting government performance. In an effort to reduce unemployment, which as of mid-2014 stands at 12%, the government employed 12,000 people annu- ally during the past few years. This has led to serious problems of burdening the government financially as well as increasing the gap between employees’ knowledge and the skills required for their jobs, all in all leading to decreased productivity. There have been serious efforts to improve performance: through civil service system reforms, increasing motivation with awards such as the King Abdullah II award for excellence in government performance and transparency (initiated ten years ago) and In- ternational Organization for Standardization (ISO), which hopes to also boost creativity in the public sector, an element that is severely lacking. However, there’s still not enough improvement. Although progress has been witnessed in certain depart- ments, such as Drivers and Vehicle Licensing Department, and the Department of Civil Status, most ministries and public sector institutions are still suffering from low quality services and administrative flabbiness. The civil service system’s latest Abstract The purpose of this research is to examine the motiva- tion of public sector employees in Jordan. A modified model of Vroom’s expectancy theory, which includes five components: expectancy, extrinsic instrumentality, intrinsic instrumentality, extrinsic valence, and intrinsic valence is adopted and applied to 258 employees of 13 public sector institutions in Amman. It remains to be seen in what extent do intrinsic and extrinsic factors motivate employees and how should managers incor- porate strategies in order to make sure that the rewards are answered with increased productivity. MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 1 71MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 reforms should in theory motivate employees to perform bet- ter. Among the reforms made, there have been several that ad- dressed rewards for performance. Such a reform was an amendment to article 76 which used to limit the number of times an employee could be upgraded based on merit removed the limit, which should increase per- formance and competitiveness. It is worth mentioning that merit upgrading is based on the employee’s annual evaluation for the last 5 years (last 2 years: Excellent, the 3 years before: Very good) and a clean record (no disciplinary action taken against him/her). Another important amendment is that now employment is by contracts, thus lowering the feeling of absolute job security that makes some employees less productive. Now an employ- ee has to uphold a certain level of performance to ensure he or she is not fired. An amendment that truly addresses the personal and profes- sional development of the employees is an amendment which states that any employee that acquires a new educational qualification (for example: a bachelor’s degree) will receive an increase in annual bonuses. Other changes that in general aspire to improve overall per- formance and human resource practice include downgrading the penalties so they start with a warning instead of a direct deduction from the annual bonus; this aims to genuinely con- trol and improve employee behavior instead of immediately penalizing them. They also expanded the authority of the sec- retary general of each institution to include addressing and adjusting the conditions of the institution’s staff, changed the name of the employee committee to the human resources committee and added to its attributes human resource plan- ning and management. In addition to that, they canceled the bonuses committee and added its tasks to the human re- source committee. And in an effort to control the bloated gov- ernment they set the maximum number of supporting jobs at 30% of total jobs. It is clear that the civil service system does have rewards for those that work hard and perform well. That has been the case even before the newest reforms, yet that does not show in performance. So it is necessary to see how employees per- ceive these rewards to understand where their motivation stems from. Another important factor to consider is the per- sonal motivation of public sector employees, and how they see their own personal and professional development in their public sector careers. It is essential to understand how the employees perceive their work and the rewards they receive for it. One theory that could explain this is the Expectancy Theory (Vroom, 1964). The expectancy theory explains how the motivation force is formed by examining the employees’ perception on three levels: 1. Expectancy, which addresses how employees see the effort they put into their job affects their performance. 2. Instrumentality, which explains how employ- ees view potential rewards for their performance. 3. Valence, which shows the value employees place on those rewards. Since there is huge concern over public sector performance and its negative impact on the country, it is critical to examine the problem with a scientific approach. There are many ele- ments in the complex equation to enhance performance and productivity, and in this research we choose to focus on only one: public sector employee motivation. Literature Review Vroom’s expectancy theory of motivation (1964) attempts to explain the reason behind employees’ motivation through understanding the perception the effort put into work to the reward they receive in return. It is composed of three factors, as follows: Motivation force = Expectancy x Instrumentality x Valence (i.e. VIE model) The expectancy theory suggests that employees will be mo- tivated to work harder if they believe their effort will result in good performance, and that performance will lead to a reward, and that reward will satisfy a need worth the effort (See figure 1). Each of those beliefs is represented by a factor: Expectancy: refers to an employee’s perception of the effort’s role in improving performance. This is determined by self-ef- ficacy, goal difficulty, and perceived control. Self-efficacy is an employee’s self-assessment of their capability to perform a task, goal difficulty affects the employee’s perception of the attainability of the goal (the more difficult a goal, the less the expectancy), and the perceived control of the job which leads to an employee’s development of ownership and responsibil- ity thus leading to higher motivation. Instrumentality: refers to an employee’s belief that good performance will lead to a reward (could be tangible or in- tangible). It is composed of three variables, trust, control, and policies; trust in who decides the reward and it’s receiver, con- trol of the decision making process in case there is no trust, and policies that clearly state how performance will lead to reward. Valence: The value of the reward in the eyes of the employee. This is determined by the needs, goals, values, preferences, and sources of motivation of the employee. Based on a combination of all three factors, employees will choose the behavior alternative that gives them the highest motivation force. The higher each factor, the higher the moti- vation. So, the theory is dependent on perception; perception of effort and performance, and performance and reward, as well as the perception of the value of the reward. Therefore, the expectancy theory could be considered a “process theory” (Fudge and Schlacter, 1999) as opposed to a content theory, since it depicts how expectations lead to one behavior or an- other depending on the individual’s perceptions. MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 174 Other research simply points out to the individual differences. Delfgaauw & Dur (2008) suggest that public sector employ- ees could be divided into three categories: lazy, regular, and dedicated. Lazy employees avoid putting effort into their jobs; dedicated employees are motivated by PSM, while regular employees are the same as the dedicated ones but without the PSM. Each category of employees has different motiva- tions, especially when taking into consideration if the effort is verifiable or not. Delfgaauw & Dur (2008) found that lazy em- ployees prefer jobs where effort is unverifiable, while on the opposite, dedicated employees prefer effort that is verifiable. Research has found that in countries facing economic chal- lenges and high rates of unemployment, the public sector is preferred as it provides job security and stability (Boudarbat, 2008; Groeneveld et al., 2009). It’s also been found that the higher the wages paid by the public sector, the more the job attractiveness increases (Adamchik & Bedi, 2000; Tansel, 2005). Countries that have a career-based system provide better job security than position-based ones. In a career-based system, employees are expected to work their entire lives in the public sector, promotions and career advancements are decided by the government and the labor market is internal. Whereas po- sition-based relies more on competence regardless of their ex- istence inside or outside the public-sector labor market, that is they don’t mind bringing in external employees to switch and start work in the public sector (Hammerschmid et al., 2007). Research has found that the lower the income, the higher the preference for public sector work for its job security. In oppo- site to income, research found that the higher the educational lever, the less the preference for public sector. As for age, older people have been found to prefer public-sector work more than younger generations (Van de Walle, et.al, 2014). Jordanian Public Sector Employees While having public sector employees rank intrinsic rewards higher than extrinsic might seem like a good thing, it might actually be a symptom of a serious problem. If considered within a Jordanian context, this could be due to the fact that performance is not directly related to an increase in income or promotion. Employees have very little trust that their hard work would be rewarded. They do not believe their original salary is proportional to the work they do, or that it is enough to satisfy their needs. They also do not believe that the promo- tion system is fair, or that they would be rewarded financially in any manner if they are more productive. An even more serious problem is that the same study also found that there are overwhelmingly low moral incentives as well. The employees do not believe the government cares enough about its employees’ professional well-being; the gov- ernment does not provide medals, honorary promotions, ad- vantages for participating in training courses, participation in decision making, transfer to another position for better utiliza- tion of skills, and transfer to a better department as a reward for good performance. However, in terms of the social incentives provided by the government, the results were significantly higher. Employees found availability of a daycare center and a room for prayer highly motivating. Being provided with cultural services, such as a cultural or sports center as a reward for good perform- ance, lead to medium motivation, whereas loans for social oc- casions, compensation for transportation costs, and availabil- ity of a cafeteria were found not to contribute to motivation. The study also found that the overall performance of the em- ployees is average. The study looked at different aspects of performance, such as: willingness to work outside official work hours, ability to solve work problems, ability to act in critical situations, full readiness to take responsibility, commitment to work laws and procedures, participation in management deci- sion making, possession of good communication skills, con- stant performance improvement, completing tasks according to the required standards, and performing work as effectively and efficiently as required. So, as concluded from the study, public sector employees perceive social incentives as their first motivator, followed by moral ones, and finally financial ones in Jordan. Unfortunately, there has not been sufficient literature regard- ing the motivation of public sector employees. Methodology Our main goal is to address many of the concerns stated in the previous section in one holistic model. In order to do that we adopted a research design similar to that of Chiang and Jang (2008). While their research applies a revised model of the expectancy theory to hotel employees, we want to use it for the public sector employees in Jordan. We believe that for the particular contingency of the sector, the model is also suit- able for testing their motivation. Chiang and Jang used an adjusted expectancy theory model based on Porter and Lawler’s modified model (1973) (See Fig- ure 3). Research hypotheses The research proposes the following hypotheses: Expectancy (effort performance): If employees believe that putting more effort into their job would lead to better performance, then it is logical to assume that in theory, this perception would lead to increased motiva- tion. So we propose the first hypothesis: H1: Expectancy has a positive effect on public sector employ- ee motivation. Extrinsic instrumentality (performance extrinsic reward): If employees believe that better performance would lead to a desired extrinsic reward, (promotion, bonuses, and better sal- ary) then it is logical to assume that in theory, this perception MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 1 75 Figure 3: Chiang and Jang’s modified expectancy theory model, 2008 MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 would lead to increased motivation. So we propose the sec- ond hypothesis: H2a: Extrinsic instrumentality has a positive effect on public sector employee motivation. Intrinsic instrumentality (performance intrinsic reward): If employees believe that better performance would lead to a desired intrinsic reward (feeling of accomplishment, more control over job, and more confidence), then it is logical to as- sume that in theory, this perception would lead to increased motivation. So we propose the third hypothesis: H2b: Intrinsic instrumentality has a positive effect on public sector employee motivation. Extrinsic valence (desired extrinsic reward): If employees place high value on a desired extrinsic reward then it is logical to assume that in theory, this perception would lead to increased motivation. So we propose the fourth hypothesis: H3a: Extrinsic valence has a positive effect on public sector employee motivation. Intrinsic valence (desired intrinsic reward): If employees place high value on a desired intrinsic reward then it is logical to assume that in theory, this perception would lead to increased motivation. So we propose the fifth and final hypothesis: H3b: Intrinsic valence has a positive effect on public sector employee motivation. Statistical methods used For the purpose of descriptive and statistical analysis required for the research objectives, the following statistical methods were used: 1. Frequency and percentages to describe the characteristics of the sample. 2. The mean and standard deviation 3. Cronbach’s Alpha to examine the internal consistency esti- mate of reliability of test results. 4. Pearson correlation coefficient 5. Multiple Regression Analysis (MRA). Variable construction Theoretical: Referring to researches (previous literature), offi- cial government reports, and government civil service system guide. MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 176 MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 Practical: Distribution of a questionnaire (Chiang, 2008) that includes a section for each element of the adjusted expect- ancy theory model. (See Table 1) The research measurements were designed using a 7-point Lik- ert scale. The Cronbach’s Alpha Coefficient ranged from (0.77 - 0.91) which is statistically acceptable in managerial research because it is larger than 0.75 (Nunnaly & Bernstein, 1994). This indicates that the measurements have internal consistency. Data Analysis The methods of data collection and statistical approaches used to analyze the data are clarified in this section. Descrip- tive analytical research methods are used to analyze the col- lected data due to the study questions, which is to examine the 5 constructs of the expectancy theory (expectancy, extrin- sic and intrinsic instrumentality, and extrinsic and intrinsic va- lence) and its relationship with employee work competition. The public sector in Jordan employs approximately 225,000 employees. The sample intended to represent a large spectrum of employees, consisting of 13 public sector institutions (The Parliament, Ministry of Education, Ministry of Interior, Ministry of Environment, Ministry of Communication and Information, Ministry of Planning and International Cooperation, Natural Resources Authority, Social Security Corporation, Vocational Training Corporation, Independent Commission for Elections, Institution for Standards and Metrology, Jordan Investment Board, Supreme Judge Department, Health Insurance Depart- ment, and Independent Election Commission). The population is composed by employees in the Jordanian public sector. The sample consisted of 13 institutions, 300 questionnaires were distributed, 282 returned, and 258 were suitable for data analysis. The gender ratio was as follows: 56.2% consisted of males and 43.8% of females. The age of the sample ranged from 20 to 61 years old. The educational level variation was as follows: 13.9% were at secondary level, 14.3% held diploma, 52.3% Bachelors, 13.9% Master’s, 5.4% PhD. (See Tables 2, 3, 4) Results We concluded the extent to which each measurement item was perceived by employees through calculating their mean scores, which are presented in Table 5. For the expectancy’s four measures, the mean scores ranged from 5.48 (more ef- fort leads to being regarded as an effective employee) to 5.88 (working hard will get the employee more accomplished) based on the 7-point Likert scale. The extrinsic instrumentality ranged from 3.11 (performing well gets pay increase) to 3.91 (performing well gets more opportunities for promotion). Intrinsic instrumentality had noticeably higher mean scores, ranging from 5.47 (performing well leads to more responsibil- ity or control over job) to 5.96 (performing well leads to a feel- ing of accomplishment). When it came to valence, the mean scores were somewhat similar to instrumentality, with extrin- sic valence ranging from 3.21 (performing well leads to a good salary), to 4.61 (performing well leads to interesting work), and intrinsic valence ranging from 5.38 (performing well results in more challenging tasks) to 5.75 (performing well leads to per- sonal growth and development). Work motivation achieved high mean score with the lowest being 6.05 (a tie between high motivation leading to expending more effort on the job and enhancing quality of performance) and the highest being 6.07 (high motivation leads to increased productivity on the job). So in conclusion, respondents evaluated intrinsic instru- mentality as the highest. With the high mean scores for work motivation, employees indicated that high motivation would lead to improved performance. The modified expectancy theory model is validated as R- squared was able to explain more the more than 47% of the variance of the work motivation. The F-value (approximately 19.9) proves the fit of the model. The analysis shows that extrinsic instrumentality and valence do not have a significant impact on work motivation (the sig- nificance level is above 0.10). However, it is interesting to see that despite not being statistically significant, the relation is expected to be negative (the beta coefficient is negative). So, Jordanian public employees are actually less motivated when they receive more extrinsic rewards. However, this statement needs to be further tested in future research, since there is no statistical support for it in our study. The intrinsic instrumentality and valence are statistically and positively related to work motivation, with a level of signifi- cance of 0.024 and less than 0.001, respectively. The biggest impact is assigned to intrinsic valence. Results show that em- ployees are motivated with the reward of feeling of accom- plishment and personal growth and development, so they place great value on intrinsic rewards. Expectancy is not statistically significant (near 0.10 but over this threshold). However, the expected relation should also be positive in this case (See Table 7). We encountered some limitations while collecting the data. The first one is that the data was only collected from public sector institutions in Amman, which is the developed capital of the country, so it might not be representative of all em- ployees across Jordan. The data was only collected from ad- ministrative staff, so it might not be a fair representation of the different types of public sector employees. The data was sometimes collected with the supervision of a manager, which might have influenced the answers of the employees. We recommend public sector institutions to look further into why extrinsic rewards (even with the latest reforms) do not resonate with the employees as to better under- stand how employee work motivation functions. In this way, further improvements could be made to the system. Expectancy is not significant but is very close to become so. This gives hope that maybe with more improvements in the public sector, expectancy could increase leading to better mo- tivation and thus better performance. The public sector job is very routine-oriented with little room for creativity and better performance. Decreasing, when possible, the mundane tasks could lead to improvements. MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 1 79 Table 6: Correlations ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). MIDDLE EAST JOURNAL F BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 180 Table 7: Multiple Regression Analysis Table 8: Results of the modified expectancy theory model Table 9: ANOVAb MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015 MIDDLE EAST JOURNAL OF Business • VOLUME 4 , ISSUE 1 81 Conclusion The validity of the modified expectancy theory model is sup- ported in this study. The modified model explains the expect- ancy, extrinsic and intrinsic instrumentality, and extrinsic and intrinsic valence of employee motivation in the public sector in Jordan. The research showed that the intrinsic instrumentality and va- lence factors have a significant and positive relation with work motivation. This is good news for the public sector, because in- trinsic rewards are easier to capitalize on since they do not re- quire financial resources to incorporate into the work environ- ment. Therefore, it clear that the management must recognize intrinsic rewards and include them in their human resource strategies as they are important motivators for the employees. The managers should support and encourage a work environ- ment where performance is verbally recognized and friendly competition is fostered. Recognition of the employees’ effort and performance contributes to the feeling of accomplish- ment and self-worth. It is also good to care about their em- ployees’ own personal growth and development which can be done through training, workshops, and helping the employees obtain certificates that qualify them for career advancements. As for the extrinsic elements (instrumentality and valence), they do not contribute to work motivation as much as intrinsic elements do. However, the public service system does in fact reward performance: annual evaluations are taken into con- sideration in upgrades based on merit, which should motivate employees to improve performance. With the recent reforms, there is no longer a limit to the times an employee can be up- graded based on merit. Another amendment rewards employ- ees with an annual bonus if they acquire a new qualification such as a bachelor or a master’s degree. Another one uses neg- ative rewards. Now employment is by contracts, which means if performance does not reach certain standards the employee could have disciplinary actions taken against him/her and even possibly being fired. This should decrease the feeling of job security that sometimes leads to lack of productivity. The research contributes to the existing literature by being the first one to implement the expectancy theory in the public sector in Jordan, proving its validity. It also comes at an important time; three months after the latest civil service system reforms. The research explains the employ- ees’ view of the system after the amendments and their impact on work motivation. Further research could examine the mo- tivation of employees in response to the civil service system reforms, to see if they are having the desired impact. Further research could also delve into how employees are motivated by intrinsic rewards and how that could be incorporated into the everyday work life in the public sector. Since expectancy is very close to becoming significant, future research should look into how the public sector job could be improved so that employees are more motivated to be performant. References Adamchik, V. A., & Bedi, A. S. (2000). Wage differentials between the public and the private sectors: Evidence from an economy in transition. Labor economics, 7(2), 203-224. Baldwin, J. N. (1987). Public versus private: Not that different, not that consequential. Public Personnel Management, 16, 181-191. Boudarbat, B. & Chernoff, V. (2009). The determinants of Edu- cation-Job Match among Canadian University Graduates. IZA Working paper No. 4513. Buelens, M., & Van den Broeck, H. (2007). An analysis of differ- ences in work motivation between public and private sector organizations. Public Administration Review, 67(1), 65-74. Campbell, J. P. & Pritchard, R. D. (1976). Motivation Theory in In- dustry and Organizational Psychology, in Dunnette, M. D. (ed.) Handbook of Industrial and Organizational Psychology, Chi- cago: Rand McNally. Chiang, C. F., & Jang, S. (2008). An expectancy theory model for hotel employee motivation. International Journal of Hospital- ity Management, 27(2), 313-322. Crewson, P. E. (1997). Public-service motivation: Building em- pirical evidence of incidence and effect. Journal of Public Ad- ministration Research and Theory, 7(4), 499-518. Delfgaauw, J. & Dur, R. (2008). Incentives and Workers’ Motiva- tion in the Public Sector. The Economic Journal, 118, 171-191. Fudge, R. S., & Schlacter, J. L. (1999). Motivating employees to act ethically: An expectancy theory approach. Journal of Busi- ness Ethics, 18(3), 295-304. Gabris, G. T. & Simo, G. (1995). Public sector motivation as an in- dependent variable affecting career decisions. Public Person- nel Management, 24(1), 33-51. Graen, G. (1969). Instrumentality theory of work motivation: some experimental results and suggested modifications. Jour- nal of Applied Psychology, 53, 1. Groeneveld, S., Steijn, B., & Van der Parre, P. (2009). Joining the Dutch Civil Service: Influencing motives in a changing eco- nomic context. Public Management Review, 11(2), 173-189. Hammerschmid, G., Meyer, R. E. & Demmke, C. (2007). Public Administration Modernization: Common Reform Trends or Different Paths and National Understandings in the EU Coun- tries. In: K.Schedler &I. Proeller, I. (eds) Cultural Aspects of Public Management Reform, Emerald Group Publishing Limited, pp. 145-169. Houston, D. J. (2011). Implications of occupational locus and focus for public service motivation: Attitudes toward work mo- tives across nations. Public Administration Review, 71(5), 761- 771. Landy, F. J., & Becker, W. S. (1990). Motivation theory reconsid- ered. In B. M. Staw & L. L. Cummings (Eds.), Work in organiza- tions (pp. 1-38). Greenwich, CT: JAI Press Lawler III, E. E., & Suttle, J. L. (1973). Expectancy theory and job behavior. Organizational Behavior and Human Performance, 9(3), 482-503. MIDDLE EAST JOURNAL OF BUSINESS - VOLUME 10 ISSUE 3, AUGUST 2015