Home › MCQs › Business Administration › Question #9591
Back to Questions
Business Administration QUESTION #9591
Question 1
A high-performing employee consistently exceeds targets but receives the same annual increment as average performers. According to expectancy theory, what motivational consequence follows, and what retention risk does this create?
  • The high-performer will maintain performance because achievement motivation is intrinsic and unaffected by extrinsic equity
  • The high-performer will reduce effort because the perceived link between high performance and valued reward is broken — the effort-performance-outcome chain in expectancy theory is severed, and the organization faces attrition of its best talent to competitors who reward performance differentially✔️
  • The high-performer will become a mentor to average performers, raising team standards through social influence
  • The high-performer will increase effort to demonstrate value and justify a higher increment in the next cycle
Correct Answer Explanation
Expectancy theory (Vroom) holds that motivation requires: effort → performance expectancy (effort leads to performance) AND performance → outcome instrumentality (performance leads to reward). When high performers receive identical rewards to average performers, instrumentality collapses — the employee learns that performance level is irrelevant to reward. This destroys the motivational calculus and drives high-performers (who have strongest market alternatives) to exit.