This paper discusses the meaning of the three elements of expectation theory and their interrelation

Three elements in the theory.

2020-04-13 13:16:11Published: Internet.

Expectation Theory. What does it mean? Three elements in the expectation theory. Expectation theory is the concept of using value functions to represent utility, and expectation theory value functions and standard utility functions.

The main difference is not the wealth function, whereas the expectation theory is a function of profit or loss. Behavioral Finance.

Think: The part of the profit range above the reference point. The value function is convex, and the expectation theory indicates that the decision-maker is risk-loving. In the part below the reference point, that is, the loss interval, the expected theoretical value function is concave, indicating that the decision-maker is risk-averse. Near the reference point, there is a significant change in the slope of the value function, and the expectation theory suggests a change in risk attitudes – the perception of losses is greater than profits.

In this way, the expected theoretical utility curve is s-shaped. In other words, the expectation theory is that previous investment results often influence people's attitudes towards risk, which in turn influence decision-making under uncertainty. It is expected that theoretical investors will deduce utility not only from the level of consumption but also from changes in financial wealth.

They are more sensitive to the decrease in wealth than to the increase in wealth. i.e. loss aversion.

Expectation Theory.

The expectation theory was developed by the American psychology Ferum in his book "Work and Motivation" published in 1964. This theory holds that people are motivated when they are in need and have the possibility of achieving their goals. The level of incentive depends on the product of the expected value and the potency.

The expectation theory can be expressed by the following formula:

Incentive intensity = potency and expected value.

Motivation intensity refers to the intensity of motivation, the size of the motivation to work, that is, the degree of effort to achieve high performance.

Expected value refers to an individual's estimate of the likelihood of a realistic goal. The expected value is also called the expected probability, if the goal is achieved with complete certainty, then the expected probability is 1; If it is simply impossible to achieve the goal, the expectation is zero. Therefore, the motivation of the goals set by the manager should not be so low that people can easily obtain them and lose their motivational effect.

You can't set your goals too high, so that people can't achieve them by working hard in vain. Therefore, the incentive goal is generally set with a certain degree of difficulty, but it can be achieved through hard work, and such a goal can be achieved.

The expectation theory originated in the developed capitalist countries of the West, and like all incentive theories, it has its class limitations. First of all, the capitalist state exploits the proletariat for the benefit of the capitalists, while the socialist state applies incentives to create more wealth for the society and meet the growing material and cultural needs of the masses. Secondly, the expectation theory is centered on individualism, and all individual efforts and individual judgments are purely subjective, often lacking objective basis, and at the same time ignoring the influence of social group norms on individuals.

Again, the basic logic of the expectation theory: individual effort, performance, reward, and personal satisfaction. This is nothing more than an idealized model, which can only be motivated when people are fully aware of the process and the various relationships, and in fact it is impossible to identify every link in these processes at any time.

It can be seen that the expectation theory also has limitations.

Expectation Theory Content 1. Management Psychology Theory Expectation theory, also known as "valence-means-expectation theory", expectation theory is such.

The relationship between tolerance and goals is expressed by the formula: Motivation = Expected Value Valence This relationship between needs and goals is expressed in a process pattern, namely: "Individual Effort – Individual Achievement (Performance.

Learn "expectation theory" in 2 minutes - a must for economists.

The main points of the expectation theory are as follows:

The expectation theory was proposed by the American psychologist Froome, which holds that what a person wants to do and how much effort he puts in to do it depends on three variables.

First, expectation refers to an individual's subjective probability that their actions and efforts will enable them to perform well. Factors influencing personal expectations include an individual's experience of having a lot of dinners, self-confidence, and estimation of the difficulty of facing tasks. Second, relevance is an individual's belief that good performance will be rewarded accordingly, that is, the relationship between work performance and reward.

Third, valence refers to the degree of attraction of the reward to the individual, that is, the individual's subjective judgment of the value of the reward.

Evaluation of the expectation theory

1. The expectation theory proposes the theory of unifying goal setting with individual needs. Expectation theory assumes that individuals are thoughtful, rational beings. For the development of their life and career, they have established beliefs and basic **.

Therefore, when analyzing what motivates employees, we must look at what people want from the organization and how they can achieve their desires.

2. Expectation theory is also one of the few quantitative analysis theories in incentive theory. This theory is not satisfied with a qualitative description of the problem, but also attaches great importance to quantitative analysis. Through the analysis of various contingency factors, it correctly illustrates the choices that people make among the multiple possibilities.

That is to say, people's behavioral choices are usually the most effective, or people's actual behaviors are the behavioral choices that have the greatest motivational power. This is not only an important development in incentive theory, but also more operational in practice.

1. Effort and performance.

People always hope to achieve the desired goal through a certain amount of effort, if the individual subjectively believes that the probability of reaching the goal is very high, he will have confidence and inspire a strong work force, on the contrary, if he thinks that the goal is too high, he will not have good performance through hard work, he will lose his internal motivation, resulting in negative work.

2. Performance and rewards.

Performance refers to the expectation of rewarding rewards for performance brought about by an individual's efforts to achieve good work performance. People always hope to be rewarded for their achievements, and of course this reward is also comprehensive, including both material and spiritual. If he thinks that he will be reasonably rewarded for his performance, he may be motivated to work, otherwise he may not be motivated.

From this the individual thinks:

3. Rewards and needs.

The extent to which any outcome affects an individual's motivation depends on the individual's evaluation of the outcome, i.e., the relationship between the reward and the satisfaction of the individual's needs. People always want to be rewarded in some way that meets their needs.

However, due to differences in age, gender, seniority, social status and economic conditions, the extent to which their needs are met is different.

Therefore, for different people, the same incentive system can meet different needs, and the motivation to work can be stimulated.

Oh, the three elements are mainly uh, when expectations are relatively high, a kind of change in people about something and a kind of desire in their hearts.

You are still more important, because Brother Fan has to pay for a wide range of industries.

Extreme Theory, Continuum Theory, Management Systems. These theories are discussed from different perspectives.

It consists of three variations or three connections: effort-performance linkage (expectation): the possibility that an individual feels that a certain level of work performance can be achieved through a certain level of effort; Performance-Reward Steak Feast Liaison (Means):

The degree to which the individual believes that the desired outcome will be achieved after a certain level of performance is achieved – the key to the problem is what the employee perceives the outcome, whether his perception is correct or not; Attractiveness of the reward (valence): The degree to which the outcome or reward is important to the individual, the valence is mainly concerned with the individual's goals and needs – it depends on the attitude, personality and needs of the employee.