Briefly Describe Vroom's Theory and Its Three Components

question 80

Essay

Briefly describe Vroom's theory and its three components. How can managers use Vroom's theory as they develop effective incentive plans?

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Definitions:

Probability Distribution

A function in mathematics that supplies the likelihoods of various potential outcomes of an experiment.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in statistics and finance to measure risk or volatility.

Variance

A statistical measure of the dispersion or spread of a set of data points, indicating how much the numbers in the data set deviate from the mean.

Coefficient of Variation

A measure indicating the relative variability of a data set by dividing the standard deviation by the mean, often used to assess risks or volatility in finance.