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Pay for Individual Performance: Aiding or Harming Sustainable Intrinsic Motivation?

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  • Sara Cabanas

    (School of Economics and Management, University of Porto, 4050-290 Porto, Portugal)

  • Teresa Proença

    (School of Economics and Management, University of Porto, 4050-290 Porto, Portugal)

  • Mauro Carozzo-Todaro

    (Center of Technological Sciences, Maranhão State University (UEMA), São Luis 65055-310, Brazil)

Abstract

This study aims to understand the effect of pay for individual performance (PFIP) on employees’ intrinsic motivation. Although several studies have analyzed this relationship, until now, the role of satisfaction with variable rewards has not been considered. It was hypothesized that employees who are satisfied with variable rewards would find in PFIP a source of feedback that would contribute to the satisfaction of their basic psychological needs. An empirical study was conducted with 184 professionals working in human resource consulting firms. Data were collected using an online survey, and the PROCESS macro for SPSS was used to analyze the proposed hypotheses. The results indicate that, in this context, PFIP has a direct positive effect on intrinsic motivation. It also has an indirect positive effect, which is partially and sequentially mediated by satisfaction with variable rewards and satisfaction of basic psychological needs. Employers should emphasize the informational nature of rewards, and also seek alignment between the objectives of the compensation system and employee expectations and values. The present findings broaden our understanding of how a PFIP system influences a sustainable intrinsic motivation.

Suggested Citation

  • Sara Cabanas & Teresa Proença & Mauro Carozzo-Todaro, 2020. "Pay for Individual Performance: Aiding or Harming Sustainable Intrinsic Motivation?," Sustainability, MDPI, vol. 12(16), pages 1-13, August.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:16:p:6322-:d:395174
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    References listed on IDEAS

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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. Jana Majerova & Lubica Gajanova & Margareta Nadanyiova & Anita Kolnhofer Derecskei, 2021. "Intrinsic Motivation Sources as Pillars of Sustainable Internal Marketing Communication in Turbulent Post-Pandemic Times," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    3. 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.
    4. Hyunmin Choe & Yongwon Kim & Sungok Moon, 2022. "The Effect of Labor Flexibility on Financial Performance in Korea: The Moderating Effect of Labor Relations Climate," Sustainability, MDPI, vol. 14(4), pages 1-13, February.

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