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Well It’s Only Fair: How Perceptions of Manager Discretion in Bonus Allocation Affect Intrinsic Motivation

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  • Rebecca Hewett
  • Hannes Leroy

Abstract

Perceptions of manager discretion in incentive allocation are theoretically and practically important to help explain the much‐debated relationship between performance‐related bonuses and intrinsic motivation. We argue, and demonstrate, that perceived managerial discretion is a key moderator to this relationship because of its relevance to procedural fairness. In a first study, we developed a measure for perceived manager discretion and distinguished it from related concepts. In a second experiment, we found that higher bonuses associated with higher levels of perceived manager discretion enhanced procedural fairness but those based on lower discretion did not. In a third field study, we found that actual bonuses implemented by a service organization enhanced intrinsic motivation indirectly through procedural fairness, but only when employees perceived their bonus to be based on higher levels of perceived manager discretion. Conversely, when bonus level was associated with lower perceived manager discretion, it negatively predicted of intrinsic motivation.

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  • Rebecca Hewett & Hannes Leroy, 2019. "Well It’s Only Fair: How Perceptions of Manager Discretion in Bonus Allocation Affect Intrinsic Motivation," Journal of Management Studies, Wiley Blackwell, vol. 56(6), pages 1105-1137, September.
    • Handle: RePEc:bla:jomstd:v:56:y:2019:i:6:p:1105-1137
    DOI: 10.1111/joms.12445
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    Cited by:

    1. Kateřina Knorová –Jana Fibírová, 2020. "Work motivation. Self-determination theory: literature review [Motivace v pracovním prostředí. Teorie sebeurčení a její vývoj: Literární rešerše]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(3-4).
    2. Kateřina Knorová & Jana Fibírová, 2020. "Work motivation. Self-determination theory: literature review [Motivace v pracovním prostředí. Teorie sebeurčení a její vývoj: Literární rešerše]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(3-4), pages 71-93.
    3. Rebecca Hewett, 2023. "Dissonance, Reflection and Reframing: Unpacking the Black Box of Motivation Internalization," Journal of Management Studies, Wiley Blackwell, vol. 60(2), pages 285-312, March.

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