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Article
Compensation & Benefits Review
Abstract
As much debate exists concerning the beneficial effect of using financial incentives to motivate
employees in the scientific and practitioner literature, the current research explored employees’
perceptions of the cash rewards they receive at work to better understand their motivational
impact. A model based on self-determination theory and its postulates concerning the
functional significance of rewards was tested in two studies, one with Canadians and another
with international workers. Results from path analysis indicate that through their impact on
employees’ psychological needs, cash rewards perceived as informational lead to healthier
forms of motivation, greater psychological health, and better overall work intentions than
cash rewards perceived as controlling. These findings suggest that compensation plans must
be carefully studied, designed, and implemented with the workforce to avoid overemphasizing
the reward contingencies in employees’ eyes, having a deleterious impact on their motivation,
and giving rise to unwarranted consequences on their psychological health and work behaviors.
Keywords
self-determination theory, functional meaning, cash rewards, psychological needs, motivation,
psychological health, work intentions
The current research aims to shed light on subject suggests more mitigated results:
the effect of cash rewards using concepts from first, this boosting effect only seems to be
self-determination theory (SDT).14 Originating temporary as performance quickly revolved
from social psychology, with its 40 years of back to its normal level after a few weeks27;
empirical research, SDT can help explain why second, this boosting effect only affects the
using financial incentives healthily motivate quantity of output, and this, at the cost of its
employees and lead to beneficial outcomes quality.28 In other words, due to a motiva-
under some circumstances, or be detrimental tional shift, employees produce more, but of
under other circumstances. Putting forth a lesser quality, which on the longer run risks
long-neglected concept in SDT, we propose hindering both individual and organiza-
that this differential effect lies in the functional tional productivity.29-31
significance of cash rewards, that is, in the sub- To better understand this motivational shift,
jective meaning that employees attribute to the SDT postulates that human motivation can
cash reward they receive. We first review and best be qualified as a continuum that ranges
then empirically test, in a set of two studies, from autonomous to controlled.32 Accordingly,
SDT’s postulates that cash rewards can take on individuals experience intrinsic motivation
different meanings depending of employees’ when they engage in an activity for fun and
perceptions, and therefore be experienced as pleasure, and identified motivation when they
informational if they contribute to the satisfac- engage in it because they perceive it as coher-
tion of employees’ basic psychological needs, ent with their identity, their personal values
or controlling if they contribute to the frustra- and goals.33 Together, these two types of moti-
tion of those same needs. The resulting psycho- vation comprise the autonomous pole of moti-
logical need satisfaction or frustration then vation and, in more general terms, individuals
determines whether the cash reward has a who are autonomously motivated are said to
healthy or unhealthy effect on employees’ appreciate the activity in-and-of itself and par-
work attitudes and behaviors. In doing so, we take in it voluntarily, without external pressure
aim to bridge the gap between social psycho- nor gain to make. In line with this definition,
logical theories on human motivation and the autonomous motivation is said to be a healthy
organizational incentive literature,15-17 thus form of motivation as it relates positively to
helping the academic as well as the practitioner psychological health and optimal functioning,
community to conciliate the seemingly contra- both in general life and at work. To this point,
dictory findings and deepen our understanding many studies in the work setting have repli-
as to how to best leverage cash rewards in the cated the finding that autonomous motivation
workplace. is positively associated with psychological
health, as well as organizational commitment
Cash Rewards and and performance.34-37
Motivation According to Autonomous motivation is said to arise
when individuals feel that their three basic
SDT
psychological needs, namely, the need for
Based on the premise that money is one of relatedness (or social affiliation and connect-
the best motivators, companies are increas- edness), the need for competence (or personal
ingly using one form or another of financial efficacy and belief in personal potential) and
incentives.18-20 Indeed, in the field and as the need for autonomy (or self-reliance and
reported in the organizational incentive lit- appropriate guidance without interference),
erature, a number of studies indicate that are fulfilled.38 As such, satisfaction of these
employee performance increases when psychological needs in a single context leads
using money as a reward such as bonuses, to autonomous motivation for the said activity
short-term incentives and pay for perfor- and many studies concur this finding,39
mance plans.21-26 However, research in the including in the work setting.40,41 Conversely,
field of social psychology delving into the active thwarting, or frustration, of these same
Thibault Landry et al. 3
needs has been found to be negatively associ- reward.55,56 With time, the reward would
ated with autonomous motivation, and even gradually be perceived as a means to control
positively associated with increased levels of their behavior, as individuals experience
controlled motivation.42 diminished feelings of self-determination
At the opposite end of the motivational and intrinsic enjoyment toward the activity,
spectrum, both introjected and extrinsic moti- and their autonomous motivation fades.
vations are used to describe a means-to-an-end Interestingly, this motivational shift fol-
mindset, where the individuals partake in the lowing the introduction of financial incentives
activity to progress toward a goal, and together has also been associated with organizationally
they form the controlled pole of motivation.43 deviant behavior.57 Indeed, research in spe-
Hence, controlled motivation better describes cific job industries such as salesforces as well
motivation originating from external sources, as with adults from a variety of other contexts
such as external pressure, feelings of guilt or (e.g., sports, education) has shown that overly
uneasiness, rewards and potential gains, and stressing financial incentives can increase
individuals with this type of motivation engage problematic work behaviors such as dishonest
in the activity in anticipation of the expected reporting, manipulative sales, cheating and
return that they either will get or avoid, thus lying in order to get the cash reward.58-63 This
leading them to view their participation as suggests that by overly focusing on the
instrumental in reaching a finality. rewards, individuals with controlled motiva-
In this light, controlled motivation is gener- tion are prompted to adopt a “the-end-justi-
ally considered a less healthy form of motivation fies-the-means” mentality and try to game the
as it is associated with less optimal functioning system. Taken together, these findings imply
and psychological health.44 Several studies in a nonnegligible consequences for the work set-
variety of settings, including the workplace, ting as the impact of financial incentives on
have shown that controlled motivation is associ- performance could be greater than originally
ated not only with lower psychological well- anticipated, influencing not only employees’
being but also with greater psychological work attitudes and behaviors in terms of the
ill-being.45 More particularly at work, it has efforts, engagement and commitment they
been related to diminished level of organiza- choose to invest in their job but also increas-
tional commitment and engagement.46,47 To this ing their propensity for deviant behavior.
matter, controlled motivation is generally traced
back to lower psychological need satisfaction The Functional Significance
and greater need frustration.48 Indeed, many
studies show that need frustration may be a bet-
of Cash Rewards
ter predictor of controlled motivation as it con- Despite the evidence from laboratory studies
cerns specifically the direct impediment of and others contexts (e.g., sports, education)
individuals’ psychological needs and not a mere showing the detrimental effect of using cash
passive lack of need satisfaction.49,50 rewards, these practices remain popular as
In line with SDT postulates, using finan- many studies from the business field have
cial incentives, and more generally allocat- shown that they can help organizations reach
ing cash rewards based on performance their performance goals.64 How then can these
contingencies, would appear to create a dual seemingly contradictory findings be concili-
effect by increasing controlled motivation, ated? And more important, how can financial
while simultaneously eroding autonomous incentives be leveraged to foster healthy
motivation.51-54 The mechanism behind this forms of motivation and avoid unhealthy
effect would be that the increased saliency of ones? To answer this question, SDT proposes
the reward and its contingency would lead that external factors such cash rewards can
individuals to focus on it, thus operating a take on different meanings depending on how
change from genuine appreciation of the they are presented to employees.65,66 More
activity to viewing it as accessory to get the specifically, cash rewards can be presented in
4 Compensation & Benefits Review 00(0)
Table 1. Study 1 Descriptives, Coefficient Alphas (Along the Diagonal), and Correlations Between
Variables (N = 236).
Variables M SD 1 2 3 4 5 6 7 8 9 10 11
rewards so that I stay focused on tasks during Positive Affect subscale of the work-adapted
work”). Participants rated the extent to which version of the Positive affect and Negative
they agreed with each statement on a 7-point affect Scale–Short form.87 Participants were
Likert-type scale ranging from 1 = Strongly asked to indicate the extent to which they felt
disagree to 7 = Strongly agree. “alert,” “inspired,” “determined,” “attentive”
and “active” at work in the past month using a
Autonomy and competence need satisfac- 7-point Likert-type scale ranging from 1 = Not
tion. Employees rated their autonomy and at all to 7 = Strongly. Employees’ psychologi-
competence need satisfaction using the cal ill-being was assessed using the Shirom-
Work-Related Basic Needs Scale on a 7-point Melamed Burnout Scale,88 which measures
Likert-type scale ranging from 1 = Strongly emotional, cognitive and physical exhaustion.
disagree to 7 = Strongly agree (autonomy 4 Employees were asked to rate the extent they
items: “I feel like I can be myself at my job”; felt the way described in each of the 12 state-
competence 4 items: “I really master my tasks ments in the past month using a 5-point scale
at my job”).84 ranging from 1 = Never or almost never to 5
= Always or almost always (e.g., “I have no
Autonomy and competence need frustra- energy for going to work in the morning”).
tion. Employees rated their autonomy and
competence need frustration using the Psy- Organizational deviance. Employees indi-
chological Need Thwarting Scale on a 7-point cate the extent to which they engaged in
Likert-type scale ranging from 1 = Strongly unethical work behaviors over the past month
disagree to 7 = Strongly agree (autonomy on a 7-point Likert-type scale ranging from
4 items: “I feel pushed to behave in certain 1 = Never to 7 = Everyday, using the 6-item
ways”; competence 4 items: “There are occa- Organization subscale of the Workplace Devi-
sions where I feel incompetent because others ance Scale89 (e.g., “I have taken an additional
impose unrealistic expectations upon me”).85 or longer break than is acceptable at my work-
place”).
Autonomous and controlled motivation.
Employees reported their motivation using the
Results and Discussion
Multidimensional Work Motivation Scale86
and indicated the degree to which each state- Descriptive statistics and correlations for the 11
ment represented a reason why they chose to variables under study are presented in Table 1,
invest effort in their current job using a 7-point and results of hypothesis testing are visually
Likert-type scale ranging from 1 = Not at all to presented in Figure 1. Preliminary analysis of
7 = Completely. An overall index was created the correlation matrix revealed that the control-
for autonomous motivation based on the three ling meaning of cash rewards was significantly
items of the Identified motivation subscale (e.g., and positively correlated with autonomy need
“Because this job fits my personal values”) and frustration, yet the informational meaning of
the three items of the Intrinsic motivation sub- cash rewards appears unrelated to any need sat-
scale (e.g., “Because I enjoy this work very isfaction nor need frustration. Both autonomy
much”). An overall index for controlled motiva- and competence need satisfaction were posi-
tion was created based on the four items of the tively correlated to autonomous motivation,
Introjected motivation subscale (e.g., “Because and both autonomy and competence need frus-
I would feel ashamed if I did not succeed at this tration were negatively associated with it. Only
job”) and the six items of the Extrinsic moti- competence need satisfaction appeared to be
vation subscale (e.g., “Because it allows me to negatively correlated to controlled motivation.
make a lot of money”). Finally, autonomous motivation was positively
associated with psychological well-being and
Psychological health. Employees’ psycho- negatively with psychological ill-being and
logical well-being was measured using the organizational deviance, whereas controlled
Thibault Landry et al. 7
Figure 1. Results for Study 1. Unstandardized path coefficients are shown. Continuous gray lines
indicated nonsignificant relations between the connected variables, while black lines represent significant
positive relations between the connected variables, and dotted black lines represent significant negative
relations between the connected variables.
motivation was positively associated with the (β = .03, SE = .04, p > .05; β = −.07, SE = .03,
latter two, thus lending preliminary support to p > .05), offering partial support for
our hypotheses. Hypothesis 1a. On the other hand, perceiving
We tested a model with the hypothesized cash rewards as controlling was significantly
paths through path analysis using Mplus ver- associated with lower autonomy need satis-
sion 7.31.90 The informational and controlling faction (β = −.16, SE = .06, p < .01), but not
meaning of cash rewards, as well as compe- significantly with lower competency need
tence and autonomy need satisfaction, and satisfaction (β = −.07, SE = .05, p > .05)
autonomous and controlled motivation were and with both greater competence (β = .10,
allowed to covary. Three goodness-of-fit indi- SE = .06, p < .10) and autonomy need frus-
ces were used: the comparative fit index (CFI), tration (β = .17, SE = .07, p < .01), thus sup-
root mean square error of approximation porting Hypothesis 2a.
(RMSEA), and standardized root mean square Autonomy need satisfaction was signifi-
residual (SRMR). Generally, values above .90 cantly related to greater autonomous motivation
for the CFI indicate a satisfactory fit,91,92 and (β = .52, SE = .09, p < .01) as expected, as well
values below .09 for the RMSEA as well as for as to greater controlled motivation (β = .18,
the SRMR suggest an adequate fit.93,94 Overall, SE = .08, p < .05). Conversely, autonomy need
the hypothesized model provided a satisfactory frustration was negatively associated with
fit to the data, χ2(22) = 73.24, p < .05, CFI = .93, autonomous motivation (β = −.14, SE = .07,
RMSEA = .09, and SRMR = .06. p < .05) and positively associated with con-
Most results supported our hypotheses trolled motivation (β = .15, SE =.07, p < .05). In
concerning the differential effect of the func- terms of the need for competence, its satisfac-
tional meaning of cash rewards on employ- tion was negatively associated with controlled
ees’ psychological needs. More specifically, motivation (β = −.28, SE = .09, p < .01), yet it
perceiving cash rewards as informational did not reach significance for autonomous moti-
was significantly associated with greater vation (β = .15, SE = .10, p > .05), and its frustra-
autonomy need satisfaction (β = .10, SE = tion appears unrelated to either forms of
.04, p < .05), and lower autonomy need frus- motivation (β = .07, SE = .07, p > .05; β = .04,
tration (β = −.08, SE = .05, p < .10); yet it did SE = .07, p > .05).
not appear to reach significance for either Finally, empirical support was found for
competency need satisfaction or frustration Hypotheses 1b and 2b. As such, autonomous
8 Compensation & Benefits Review 00(0)
motivation was significantly related to greater 92.3% had 2 years or more of college educa-
psychological well-being (β = .36, SE = .04, tion, and 52.1% worked in the private sector.
p < .01), lower psychological ill-being (β = −.41, Average organizational tenure was 12.12
SE = .05, p < .01) and lower organizational devi- years (SD = 9.84), while average job tenure
ance (β = −.39, SE = .05, p < .01), while the was 4.08 years (SD = 4.21). Questionnaires
opposite pattern was found for controlled moti- were distributed by email through an Ameri-
vation (psychological ill-being: β = .19, SE = can management firm’s contact list and data
.05, p < .01; organizational deviance: β = .15, were collected through a secure website.
SE = .05, p < .01) with the exception of psycho- Respondents participated in the study on a
logical well-being for which the path did not voluntary and anonymous basis and received
reach significance (β = −.03, SE = .04, p > .05). no compensation for their participation.
Given that results of this first study gener-
ally supported all four hypotheses, it was Measures. For this particular study, all the orig-
deemed necessary to gather additional empiri- inal versions of the measures in English were
cal evidence from a different sample in order used. The same measures as in Study 1 were
to increase the generalizability and validity of used (see Table 2 for reliability coefficients),
our findings. In order to achieve this, a broader with the exception of psychological health, for
and more diversified international working which only the measure for psychological
sample was used, along with measures assess- well-being was used, and organizational devi-
ing positive work outcomes. ance, which was replaced with measures of
employees’ positive work intentions.
Study 2
Intention to provide in-role and extra-role
As our goal was to replicate our findings from effort. Employees rated on 6-point scale rang-
Study 1 using different variable operational- ing from 1 = To no extent to 6 = To the full-
ization to increase conceptual validity, in est extent their intention to provide efforts in
Study 2, in addition to measuring psychologi- their job (e.g., “I intend to spend my discre-
cal health, we measured employees’ positive tionary time finding information that will help
work intentions. More specifically, we this organization”) and to engage in organiza-
assessed their intentions to provide in-role tional citizenship behaviors (e.g., “I intent to
and extra-role effort, to commit to their orga- watch out for the welfare of others at work”)
nization and stay in their organization. We using, respectively, the 3-item Intention to use
voluntarily choose to focus on self-reported discretionary efforts subscale and Intention to
intentions rather than self-ratings of actual use organizational citizenship behaviors sub-
performance to avoid self-distortion and pre- scale from the Work Intention Inventory.98
senter bias, and because measures of attitudes
have been found to be reliable predictors of Intention to commit and to stay in the orga-
actual behavior.95-97 nization. Employees reported their affec-
tive commitment to their organization on a
7-point scale with 1 corresponding to Strongly
Methodology disagree and 7 corresponding to Strongly
Participants and Procedure. The sample com- agree, using the 6-item Affective Commit-
prised 934 English-speaking workers from ment subscale from the Work Commitment
across the globe, including 56.1% women and Scale99 (e.g., “This organization has a great
43.9% men. Participants were aged between deal of personal meaning for me”). Employ-
22 and 82 years (M = 50.71, SD = 10.52), and ees reported their intentions to stay in their
came from the United States (66.6%), Canada current organization on a 6-point scale rang-
(4.4%), Latin America (3%), Europe (14.5%), ing from 1 = To no extent to 6 = To the fullest
the Asian Pacific Rim (6.2%), and other coun- extent, using the three-item Intention to stay
tries (5.3%). Overall, 94.6% worked full-time, in the organization subscale from the Work
Thibault Landry et al. 9
Table 2. Study 2 Descriptives, Coefficient Alphas (Along the Diagonal), and Correlations Between
Variables (N = 934).
Variables M SD 1 2 3 4 5 6 7 8 9 10 11 12 13
Figure 2. Results for Study 2. Unstandardized path coefficients are shown. Continuous gray lines
indicated nonsignificant relations between the connected variables, while black lines represent significant
positive relations between the connected variables, and dotted black lines represent significant negative
relations between the connected variables.
Intention Inventory100 (e.g., “I intent to stay are presented in Table 2, and results of hypoth-
with this organization even if offered a more esis testing are visually presented in Figure 2.
appealing job elsewhere”). Preliminary analysis of the correlation matrix
provided support to our hypotheses by reveal-
ing that the informational meaning of cash
Results and Discussion rewards was positively associated with auton-
Descriptive statistics, reliability coefficients omy need satisfaction, and negatively with both
and correlations for the 13 variables under study autonomy and competence need frustration.
10 Compensation & Benefits Review 00(0)
Conversely, the controlling meaning of cash frustration and any form of motivation
rewards was positively associated with the frus- (β = −.02, SE = .03, p > .05; β = .04, SE = .03,
tration of both needs. As expected, satisfaction p > .05); however, similar to Study 1, auton-
of both needs was positively associated with omy need satisfaction was associated with
autonomous motivation, while frustration of greater controlled motivation (β = .09, SE = .03,
these same needs was negatively associated p < .01).
with it as well as positively to controlled moti- Finally, in terms of Hypotheses 1b and
vation. Autonomous motivation was positively 2b, autonomous motivation was positively
correlated with all five work outcomes. related to greater psychological well-being
Surprisingly, controlled motivation was also (β = .33, SE = .02, p < .01), and greater
positively related to psychological well-being intentions to provide in-role and extra-role
and employees’ intention to provide in-role efforts (β = .35, SE = .03, p < .01; β = .15,
effort, commit and stay in the organization. SE = .02, p < .01) and to commit and stay in
As in Study 1, the same model representing the organization (β = .88, SE = .04, p < .01;
all four hypotheses was tested through path anal- β = .66, SE = .03, p < .01). With regard to
ysis. The informational and controlling mean- controlled motivation, we only found evi-
ings of cash rewards, competence and autonomy dence for its negative relation with employ-
need satisfaction and frustration as well as ees’ intentions to commit to the organization
autonomous and controlled motivation were (β = −.08, SE = .05, p < .10); psychological
allowed to covary. The model yielded a very well-being: (β = −.02, SE = .02, p > .05;
good fit to the data, χ2(34) = 254.71, p < .05, intentions to provide in-role and extra-role
CFI = .95, RMSEA = .06, and SRMR = .08. In efforts: β = .04, SE = .04, p < .01; β = −.02,
line with results from Study 1, perceiving cash SE = .02, p < .01; intention to stay in the
rewards as informational was significantly asso- organization: β = .04, SE = .04, p < .01).
ciated with greater autonomy need satisfaction
(β = .28, SE = .04, p < .01), lower autonomy
General Discussion
need frustration (β = −.22, SE = .04, p < .10) and
lower competency need frustration (β = −.24, The overall findings of this study support
SE = .04, p < .01), but not greater competency SDT’s postulate that cash rewards take on dif-
need satisfaction (β = .03, SE = .03, p > .05), ferent meaning and that it is this meaning per se
thus lending partial support to Hypothesis 1a. that determines the impact of the reward on
Supporting Hypothesis 2a, perceiving cash employees’ behaviors. In two studies, we found
rewards as controlling was significantly associ- evidence that employees’ perceptions of cash
ated with both lower competence (β = −.07, rewards as informational, thus encouraging
SE = .04, p < .10) and autonomy need satisfac- their efforts and participation, was associated
tion (β = −.23, SE = .05, p < .01), respectively, with greater satisfaction, and conversely, lower
and both greater competence (β = .22, SE = .05, frustration of their autonomy need. At the other
p < .01) and autonomy (β = .31, SE = .05, end of the spectrum, employees’ perceptions of
p < .01) need frustration, respectively. cash rewards as controlling, thus coercing them
Competence and autonomy need satisfaction into specific ways and stressing particular
were both significantly related to greater auton- behaviors, was associated with lower satisfac-
omous motivation (β = .08, SE = .03, p < .01; tion and greater frustration of that same need.
β = .35, SE = .03, p < .01). Competence need Perceptions of cash rewards as controlling also
satisfaction was not significantly associated predicted greater frustration of the need for
with controlled motivation (β = .08, SE = .03, competence, and Study 2 indicated some sup-
p > .05), while its frustration was significantly port for its association with lower competence
associated with it (β = .09, SE = .03, p < .01) need satisfaction. In both studies, psychologi-
and unrelated to autonomous motivation cal need satisfaction, as opposed to need frus-
(β = .00, SE = .03, p > .05). There was also no tration, was a better predictor of autonomous
significant association between autonomy need motivation, and conversely, psychological
Thibault Landry et al. 11
need frustration was a better predictor of con- importance of the specific meaning of rewards
trolled motivation than need satisfaction, which emerging from the design, implementation
is in line with the current literature on the and communication of financial incentives
topic.101 Finally, in terms of motivation, auton- and compensation plans to employees, includ-
omous motivation appeared to be a better pre- ing the intent, or at least the perceived intent,
dictor of psychological health and positive behind their use by employers.111-114 This
work intentions such as intention to provide in- research suggests that it is not using money
role and extra-role efforts, and to commit and per se to reward employees that is detrimental
stay in the organization. Controlled motivation and that money in and of itself that is negative
was indeed related to negative work attitudes or evil, but that it is how it is used and how
and behaviors, including psychological ill- individuals perceive it—the subjective mean-
being and organizational deviance, and both of ing employers and employees attribute to it—
these observations are coherent with general that matter.115,116 Most importantly, it raises
findings in the SDT literature102 as well as the the question as to whether or not some com-
organizational literature.103-106 pensation practices may give rise to less
In light of these findings, much point toward favorable or beneficial outcomes if not well-
the significant impact of cash rewards on intended, well-communicated or well-
employees’ psychological need for autonomy. received by the workforce.117 Our research
Perhaps the lesser support observed for the psy- bridges the gap between two distinct litera-
chological need for competence results from tures, from social psychology and from the
the conditional effect of obtaining the reward. organizational incentive community,118-120 and
As such, it could be that when financial incen- compels researchers to rethink their concep-
tives are initially presented to employees, they tion of cash rewards and investigate them with
directly influence their autonomy need as the new focus to understand how to better
employees chose to engage toward the goal pre- leverage the objective and subjective compo-
scribed by the reward in place. However, it may nents of compensations systems in place to
only be once distributed that cash rewards have bring employees to perform more and be more
an impact on employees’ competence need, as healthily motivated.
obtaining the reward may be key for the
employee to attribute an informational meaning
to the reward. From this perspective, initial pre-
Limitations and Future Research
sentation of the potential cash reward may not Notwithstanding its contribution to the issue
be sufficient to fulfill employees’ need for com- of using financial incentives in the workplace,
petence. Alternatively, the effect of cash rewards this research presents some limitations worth
on employees’ competence need may be influ- noting, including the fact that its findings are
enced by individual characteristics such as per- based on cross-sectional study designs with
sonal feelings of self-efficacy and locus of self-reported measures exclusively. As such,
control. This would then suggest an indirect the cumulative effect of perceiving cash
effect of cash rewards on employees’ compe- rewards as informational or controlling should
tency need satisfaction and frustration, whereby be investigated in longitudinal study designs
their perception of their competency need, with repetitive measures to better assess if
whether it is its satisfaction or its frustration, is perceiving cash rewards as informational
partly contingent on what they think and feel leads to healthier motivation in the long run,
about themselves and their abilities.107-110 and confers an objective advantage to employ-
In summary, there definitely is a necessity ees’ psychological health and ultimately per-
for additional research investigating the par- formance. Moving beyond a cross-sectional
ticular mechanism whereby each psychologi- design relying on participants’ reported inten-
cal need is affected by cash rewards and their tions and supplementing this with objective
functional significance. Nonetheless, this data would allow to strengthen the present
research provides preliminary support for the results by examining, for example, if the
12 Compensation & Benefits Review 00(0)
informational meaning of cash rewards is in a set of two studies that their effect on
associated with fewer days of sick leave, med- employees’ motivation varies according to the
ical bills and health insurance claims, thus functional meaning employees attribute to
indicating better general health. The func- them. On the one hand, informational cash
tional significance of cash rewards could also rewards, that is, those that are presented in a
be linked back to objective qualitative and supportive way and perceived by employees
quantitative performance measures to further as contributing to the satisfaction of their psy-
validate the finding that perceiving cash chological needs for competence and auton-
rewards as informational leads to greater work omy, motivate employees in healthy ways,
intentions. In this vein, deeper investigation leading them to experience greater psycho-
using objective data and longitudinal or logical well-being, commitment and engage-
experimental designs could help determine ment in their work. On the other hand,
whether, with time, informational cash controlling cash rewards, that is, those pre-
rewards increases autonomous motivation and sented in a pressuring way and perceived by
results in not only increased levels of perfor- employees as thwarting their psychological
mance but also better quality of job output. needs, accentuate the notion of reward contin-
In a similar line of idea, future research gencies, thus motivating employees in less
should also address more specifically the vari- healthy ways and leading them to feel more
ous compensation practices and compensation psychologically distressed, less committed to
plans currently used on the market to deter- their workplace and more tempted to engage
mine if some pay strategies, for example, all- in organizationally deviant behavior.
commission based pay, are inherently These findings stress the importance of well
experienced as more controlling than others. positioning any type of compensation practice
This may especially be the case and worth as to ensure that it only reinforces the desired
exploring by type of industries (e.g., produc- behavior and to avoid any unwarranted effects
tion and manufacturing vs. sales and customer on employees. Practitioners and researchers
service, private vs. public) as compensations alike are encouraged to carefully consider the
practices are often said to reflect crucial job diverse compensation practices existing in the
requirements. Job realities may have led to the workplace and take into account the specifici-
emergence and predominant adoption of cer- ties of each in relation with the targeted work-
tain types of compensation structures that lead force and the job design to leverage cash
to less optimal functioning and increase the reward plans in ways that are better aligned
risk of detrimental consequences on the work- with the organizational culture and values they
force in the long run.121 seek to put forth. Alternatives to cash rewards
Finally, when taking into account indus- in all shapes and forms, including noncash
tries and activity sector in relation to compen- rewards and benefit programs, such as paid
sation practices, it may be worth looking at vacations or time-saving coupons122-130 should
the interaction with individual preferences also be researched and encouraged as they may
and styles such as extrinsic orientation and provide a healthier and beneficial venue to
self-efficacy beliefs. For example, individuals motivating employees and ensuring an engaged
with lower self-efficacy beliefs may experi- and committed workforce.
ence cash rewards as more controlling com-
pared to individuals with greater self-efficacy Declaration of Conflicting Interests
beliefs, regardless of the actual structure of The authors declared no potential conflicts of inter-
their organizations’ compensation plans. est with respect to the research, authorship, and/or
publication of this article.
Conclusion Funding
The current research explored whether cash The authors received no financial support for the
rewards are intrinsically good or bad for research, authorship, and/or publication of this
employees’ functioning at work, and showed article.
Thibault Landry et al. 13
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