Revisiting the Use of Cash Rewards in the Workplace: Evidence of Their Differential Impact on Employees’ Experiences in Three Samples Using Self-Determination Theory

Abstract

Using self-determination theory, this research sheds light on the role of different subjective, or functional, meanings of cash rewards on employees’ functioning. Based on three samples of workers from across the world in a variety of industries, the current research provides empirical evidence that cash rewards perceived as having an informative meaning positively contribute to their psychological needs, which leads to better functioning, whereas cash rewards perceived as having a controlling meaning negatively contributed to their psychological needs, which is then associated with suboptimal functioning. These findings highlight the theoretical and practical relevance of considering employees’ perceptions to understand the influence of cash reward programs on their commitment, quality of motivation and behaviors in the workplace as well as to better design these programs, including their roll out strategies, if organizations set those in place to drive healthier forms of motivation and commitment.