When considering employee compensation,
Blank
______ theory is focused on the effects of incentives.

Question

When considering employee compensation, 
Blank
______ theory is focused on the effects of incentives.

BlackTom AI · Accepted Answer

In this question, we’re asked to identify which theory related to employee compensation focuses on the effects of incentives.
Option 1: 'behavioral' — This typically refers to behavioral theories or reinforcement theory, which emphasizes rewards and punishments to shape behavior. While incentives are a component, the classic behavioral/operant framework centers on reinforcement schedules rather than the broader incentive-effects concept asked for here.
Option 2: 'equity' — Equity theory deals with perceived fairness of pay comparisons between individuals and referents. It explains how fairness judgments influence motivation, not specifically the direct effects of incentives on performance or outcomes.
Option 3: 'expectancy' — Expectancy theory posits that motivation depends on three beliefs: the effort-to-performance expectancy, the performance-to-outcome expectancy, and the value of the outcome. In other words, it conceptualizes how incentives influence the perceived likelihood and value of rewards, aligning with the idea that incentives affect motivation and behavior. This fits the prompt's focus on the effects of incentives in compensation.
Option 4: 'compensation' — This term broadly describes pay and benefits themselves but is not a distinct theory name. It does not specify a theory about how incentives influence motivation or behavior.
Overall, the option that aligns with the idea that incentives affect motivation through expectancy judgments is the 'expectancy' theory. The other choices either describe different motivational frameworks (reinforcement/behavioral), fairness perceptions (equity), or refer generically to pay without naming a theory, making them less aligned with the prompt’s focus on incentive effects within a theoretical framework.

When considering employee compensation, Blank ______ theory is focused on the effects of incentives.

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