An integrative SDT-based investigation of the relation between financial incentives, motivation, and performance
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Journal of Personnel Psychology volume no. 16, issue no. 2, © 2017 by Hogrefe Verlag. This version of the article may not completely replicate the final version published in Journal of Personnel Psychology. It is not the version of record and is therefore not suitable for citation.
To this day, researchers are debating the adequacy of using financial incentives to bolster performance in work settings. Our goal was to contribute to current understanding by considering the moderating role of distributive justice in the relation between financial incentives, motivation, and performance. Based on self-determination theory, we hypothesized that when bonuses are fairly distributed, using financial incentives makes employees feel more competent and autonomous, which in turn fosters greater autonomous motivation and lower controlled motivation, and better work performance. Results from path analyses in three samples supported our hypotheses, suggesting that the effect of financial incentives is contextual, and that compensation plans using financial incentives and bonuses can be effective when properly managed.
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