Figure out motivation for a better future
The Covid-19 pandemic has spared no economy globally, but emerging markets have been hit hardest as investors seek a safe haven in the greenback. The SA, Mexican, Brazilian and Russian currencies have each depreciated by about 20% since the start of 2020.
The SA government, its agencies, the public service, labour and business have all thrown their weight at the challenges the country faces. An opportunity, therefore, exists to explore how expectancy value theory can be applied to an economic planning framework to deal with the health, financial and economic crises the country is experiencing due to the pandemic.
Based on Yale professor Victor Vroom’s 1964 seminal work, expectancy value theory (also known as the theory of motivation) models a cognitive motivational force through a detailed understanding of expectancy, instrumentality and valence as primary explanatory variables. Simply put, the things that motivate us are driven by (1) effort leading to performance (expectancy), (2) performance leading to desired results (instrumentality), and whether we find the results or reward desirable (valence).
Thinking through the policy and broader initiatives taken so far might be a starting point to ensure we are asking the right questions, and that the choices will be effective. If our answers to the following questions are more positive than negative, then we may be on the right track to dealing with the Covid19 challenges as well as preparing the economy for post-pandemic growth.
Will the current policies alleviate the pain? The broad strokes of the policy interventions have largely targeted funding initiatives for ailing businesses, employment retention initiatives, testing, medical equipment and social support services. Theories of motivation are particularly important for a labour force that has seen a growing number of long-term unemployed as well as a growing number of discouraged job seekers.
An interesting phase two approach would be initiatives that will proactively position the economy for growth. It would be encouraging to see how people who lose their jobs will be supported by a digital skills development fund to ensure they can upskill to become economically relevant for the future skills requirement of the economy. The digital skills development agenda has primary been looked at from the supply side rather than coopted by the organisations that would absorb those skills (the demand side).
The German economy’s celebrated high absorption rate of students who follow the vocational learning path rather than the academic one is primarily premised on coopting the demand side as well as encouraging the supply side. These are the programmes that can motivate both labour participants and companies to buy into a future of broad-based economic participation by our labour force.
Will firms be optimistic about investing into growth? For the past decade the narrative has been that domestic firms have been on an investment strike, with about R1-trillion in cash reserves not invested in real economic activities. In his 1975 paper “Incorporating Expectancy Theory into Social Investment Decisions”, Prof Fred L Fry found that valence was the primary channel through which firms could invest in socially beneficial outcomes (the real economy) without compromising their growth and profitability agendas. The current investment by big business towards the alleviation of the pain of Covid19 is of mutual benefit to business and society and informs a new framework that business can follow.
Motivation theory is also the lens through which we can analyse entrepreneurial outcomes in the country. Businesses are under immense pressure as the 21-day lockdown takes its toll on operations. Their understanding of expectancy value theories in the context of their businesses may mean the difference between closing up shop or knocking on one more door to ensure the business can continue operating.