The informational effect of pay for individual performance on intrinsic motivation

Abstract

Purpose

This research aims to test the role of the informational effect (IE) on the relationship between pay for individual performance (PFIP) and intrinsic motivation (IM). Special attention is also given to how the supervisor’s positive (PF) and negative feedback (NF) influence workers' perceptions of the informational content of PFIP.

Design/methodology/approach

We used a two-wave online survey among workers covered by a PFIP system and collected a total of 472 answers. To test our hypotheses, we adopted SPSS PROCESS macro Model 9.

Findings

The results suggest that IE fully mediates the positive impact of PFIP on IM, with this effect diminishing in the presence of NF, while PF shows no significant influence.

Practical implications

Organizations should invest in the development of mechanisms to mitigate perceptions of rewards as behaviour control mechanisms. Instead, PFIP should be perceived as a means to gain valuable insights into performance.

Originality/value

By using a research design allowing external validity in opposition to the widely used experimental one, we contribute to the debate about the relationship between extrinsic rewards and IM. Theoretical and practical implications in the workplace are also discussed.