MANAGEMENT CONTROL AND MOTIVATION

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MANAGEMENT CONTROL AND

MOTIVATION

The relationship between output control and

motivation within the healthcare sector

Lieke Winkler

Organizational and Management Control

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2 Preface

The following paper is the result of a research performed to finalize my Master in Business Administration at the University of Groningen. After receiving my Bachelor degree in Psychology at the University of Groningen, I started the pre-Master in Business Administration, followed by a Master in Organizational and Management Control. During all these years I have gained valuable theoretical and practical knowledge about human behavior, organizations, management business economics and finance. Inspiration for this research was, therefore, found during my Bachelor Psychology and Master Organizational and Management Control.

There are two main reasons why I chose to conduct a study on management control and motivation. First, during my master phase I missed the human side of management control, I am convinced that employees themselves are a very important element in management control systems. Second, the Dutch healthcare sector is currently implementing business like models, including management control systems. I was very curious what the effect of implementing these business models is on the motivation of employees in the healthcare sector. And that was the motive for this Master research.

Before I begin, I would like to thank a number of people. Their support was very important for the final result . First, I would like to thank my thesis supervisor dr. B. Crom, for his support and constructive feedback during the months in which I wrote this thesis. He challenged me to rethink my approach. Furthermore, I would like to thank my second thesis supervisor dr. T.A. Marra for his valuable feedback on the methodology section on this paper. At last, I would like to thank the hospital for the response on my questionnaire.

At the end of my college days, I would like to seize the opportunity to thank my family and friends for their support these years.

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3 Abstract

The healthcare sector is facing some major changes. One of these changes is that they are becoming more result-oriented. Accordingly, motivation is becoming more important due to expected future personnel shortage, caused by the aging population. Therefore, it is important to investigate the relationship between output control and motivation, in a sector where the intrinsic motivation is high. According to the goal setting theory (Locke, 1988), goal setting is a motivational tool. However, the theory of Miao (2007), explains that intrinsic motivation is lowered by setting goals. This study also investigates the relationship between rewards and motivation. Theory explains that extrinsic rewards increase extrinsic motivation and decrease intrinsic motivation (Miao, 2007; Deci et al., 1999). According to Locke (1988) and Van der Voort & Kerspershoek (2009) commitment to these objectives is an important determinant of increasing motivation. To investigate this theories a questionnaire is filled in by 70 employees of a Dutch hospital. The first analysis shows that the intrinsic motivation is significantly higher than the extrinsic motivation. The second analysis, the regression analysis, confirms the theories of Locke (1988), but does not confirm the theory of Miao (2007); extrinsic and intrinsic motivation are higher when goals are set. In addition, rewards result in lower intrinsic motivation, already mentioned by the theories of Miao (2007) and Deci et al. (1999). To conclude, some expectations are confirmed whereas others are not. The advice to managers in the healthcare sector is that they need to be aware of the high intrinsic motivation of their employees when implementing a management control system.

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4 Table of contents

Chapter 1 Introduction 5

Chapter 2 Theoretical framework 8

2.1 Management Control and the behavioral perspective on management control 8

2.2 Management control systems 11

2.3 Performance management within the Dutch healthcare 14

2.4 Motivation 16

2.5 Management control systems and motivation 17

2.6 Summary of the literature review 23

Chapter 3 Methodology 25

3.1 Data collection 25

3.2 Measurements 27

3.3 Statistical analysis 30

Chapter 4 Results 34

4.1 Outliers and assumptions 34

4.2 Descriptive and correlation analysis 38

4.3 Hypothesis testing 40

4.4 Conclusion 47

Chapter 5 Conclusion and discussion 49

5.1 Control variables 49

5.2 Hypotheses 49

5.3 Conclusion and managerial advice 52

Chapter 6 Future research and recommendations 54

6.1Methodology 54

6.2 Recommendations 54

References 56

Appendix A Box plot and residual scatter plots Appendix B Correlation analysis

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5 Chapter 1 Introduction

The Dutch healthcare sector is beginning to experience some major changes, as healthcare

organizations face two fundamental developments. The first development is an increased need for quality and transparency of performance of healthcare organizations (Van der Voort & Kerspershoek, 2010). In reality the performance of this sector was characterized by long waiting times, inefficiency, low productivity, stressed medical staff and dissatisfied patients (Purbey et al, 2006). The Dutch Minister of Health and Society has proposed several ideas to increase the quality, results, and affordability of the long-term care. Hence, the public services have come under increasing pressure to improve their efficiency and effectiveness, reduce their demands on taxpayers, while maintaining the volume and quality of services supplied to the public (Brignall & Modell, 2000). This results in an increased need for transparency on performance.

The second fundamental development in the healthcare sector is the potential shortage of staff in the future. Due to the aging population, more healthcare personnel is needed in the future. The ´Sociaal Cultureel Planbureau` (SCP) predicts that the need for personnel in the period between 2005 and 2030 will increase by 1.2% each year (Woittiez et al., 2009). Labor productivity in Dutch nursing homes and hospitals is declining steadily. This trend is most likely related to the increased amount of care needed by patients and the increased quality standards (Eggink et al., 2010). Due to this demographic trend and development in productivity, it is important for healthcare organizations to motivate and retain their current employees. Indeed, many healthcare organizations agree on the need for methods to maintain and attract new employees. As a result motivating healthcare employees is becoming more important.

Due to these two developments there is a shift towards more result-oriented organizations. That is., current reforms in the healthcare sector are characterized by the introduction of management practices and techniques which were originally developed for the business sector (Weibel et al., 2009). This is likely to result in the use of more management control systems, particularly in the use of performance management systems. Van der Voort & Kerspershoek (201) also report on an increased need for monitoring results within the healthcare sector. Accordingly, the healthcare sector is differently characterized, for example, the sector has highly intrinsic motivated employees compared to other industries (Sanford, 2012).

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6 The goal is to inform managers how they can correctly implement management control in the healthcare sector, while keeping the intrinsic motivation in mind. This study focuses on performance management and motivation.

There are several theories explaining the interplay between monitoring and motivating. An example are the coercive controls and motivating controls of Simons (1995). Underlying Simon’s framework is the idea of opposing forces that manage tensions “between freedom and constraint, between empowerment and accountability, between top-down direction and bottom-up creativity, between experimentation and efficiency” (Simons, 1995) The healthcare sector is facing the problem of how to monitor and motivate employees. There is pressure on the current healthcare institutions to increase their quality, efficiency and effectiveness, but the methods for retaining employees are becoming more important. Therefore, this study focuses on the use of management control systems within the healthcare sector; the interplay between monitoring and motivating is researched. Management control involves addressing the general question: are our employees likely to behave appropriately? Management control issues have primarily an internal focus; managers think about how they can influence employees’ behaviors in desired ways (Merchant & van der Stede, 2006). Thus, management control involves taking steps to help ensure that the employees do what is best for the organization. This paper gives an advice to managers in the healthcare sector; what is the impact of management control on the motivation of employees? And do managers need to account for the intrinsic motivation of employees?

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7 research done on motivation to work, however, a comprehensive understanding of work motivation as a response to the increasing demands and challenges in healthcare is still missing (Toode et al., 2010) Hence, there is more in-depth information needed on the influence of performance management on motivation.

Correspondingly, the research question is as follows:

What is the influence of performance management on the motivation of employees in healthcare organizations?

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8 Chapter 2 Theoretical framework

Within the field of management control, different definitions and theories exist. First, in section 2.1 and 2.2 the most influential theories within the field of management control are explained and the development of the human side of management control is considered. Since 1960 there is a focus on the behavioral side of management control, this section (2.1) describes how the human side of management control is explained in the literature. This results in the mostly used definition of management control and an overview of management control systems. Secondly, section 2.3 clarifies how management control is used in the healthcare sector. Traditionally management control is not extensively used within the healthcare sector, however, since the introduction of the ‘ziektekostenwet’ there is an increased usage of management control. Thirdly, section 2.4 explains the most important motivation theories within the psychology literature, with a focus on intrinsic and extrinsic motivation. Finally, in section 2.5, an overview of the theories which clarify the relationship between performance measurement and the motivation of employees is provided. 2.1 Management Control and the behavioral perspective on management control

As mentioned in the introduction, management control is needed in the healthcare sector. However, the question arises why management control is indeed necessary. Additionally, how has the usage of management control developed? Within this section the general function of management control systems is explained. Overall, management control is a tool to ensure that organizations achieve their organizational goals and outcomes. Although several definitions are given within the field of management control, this paper follows the definition of Anthony (1965). His definition is most commonly used in the management control literature and does not neglect to illustrate the importance of the behavior of employees. The management control process is defined by Anthony (1965) as:

“The process by which managers assure that resources are obtained and used, effectively and efficiently, in the accomplishment of the organization’s objectives”.

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9 the importance of the behavioral sciences, particularly social psychology, in understanding how control systems have an impact on the actions managers take within organizations. However, the behavioral sciences were not generally incorporated into theories of management control (Otley, 2003).

The behavioral perspective on management control

As mentioned in the introduction, this study focuses on the human perspective of management control. Hence, this part elaborates the theory of McGregor (1960) on this topic. Historically, management control has been used more formally and aimed more strictly at procedures, structures and systems. In the end, the objective of the procedures and systems was to influence human behavior. Nonetheless, the work by McGregor (1960) clarifies the importance of the human perspective on organizations.

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10 TABLE 1

Theory X and theory Y (McGregor, 1960)

Assumptions Theory X Theory Y

Predisposition towards work The average human being has an inherent dislike of work and will avoid it if he can (p.34).

The expenditures of physical and mental effort in work are as natural as play or rest. The average human being does not inherently dislike work. (p.47) Achievement of organizational

objectives

Most people must be coerced, controlled, directed, and threatened with punishment to get them to put forth adequate

effort towards the

achievement of organizational objectives (p. 34).

External control and threat of punishment are not the only means for bringing about effort toward organizational objectives. Men will exercise self-direction and self-control in the service of objectives to which he is committed. (p. 47)

Perspectives on Responsibility The average human being prefers to be directed, wishes to avoid responsibility, has relative little ambition and wants security above all (p. 34).

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11 2.2 Management control systems

Within the field of management control different systems are exist. This part provides an overview of the most influential management control theories and explains performance measurement and the interplay between monitoring and motivating; the theories of Ouchi (1979) and the levers of control of Simons (1995).

Types of control Ouchi

An influential article within the field of management control is the paper of Ouchi (1979). The objective of the paper of Ouchi (1979) is to describe three fundamentally different mechanisms by which organizations can seek to cope with the problem of evaluation and control, depending on different types of circumstances. The three mechanisms are referred to as ‘markets’, ‘bureaucracies’, and ‘clans’. Markets deal with the control problem through their ability to precisely measure and reward individual contributions; bureaucracies rely instead upon a mixture of close evaluation with a socialized acceptance of common objectives; and clans rely upon a relatively complete socialization process which effectively eliminates goal incongruence between individuals (Ouchi, 1979).

TABLE 2

Conditions in determining the measurement of behavior and output

Knowledge of the transformation process

Perfect Imperfect Ability to measure

outputs

High Behavior or output

measurement

Output measurement

Low Behavior

measurement

Ritual and ceremony “Clan control”

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12 based on personal surveillance and is exerted when means-end relations are known and thus when appropriate instruction is possible (Ouchi & Maguire, 1975). When there is no knowledge of the transformation process and the ability to measure outputs is low, clan control is the most suitable control type. Behavior control and clan control are approaches Ouchi suggest for controlling an organization if measurements on the basis of output is not feasible. Behavior and output control serve different purposes and consequently occur independently of each other (Ouchi & Maguire, 1975). Regarding this study, we should note that there is an increased usage of output control within the healthcare sector. Important therefore, is a high ability to measure outputs. In the next section, on performance management, it is explained in depth whether this is the case.

Levers of Control

Next to the article of Ouchi (1979, 1975), Simons (1995) developed a management control framework based on the tension between different management control modes. Underlying Simon’s framework is the idea of opposing forces that manage tensions “between freedom and constraint, between empowerment and accountability, between top-down direction and bottom-up creativity, between experimentation and efficiency” (Simons, 1995 p.4). These tensions are managed by two types of control. The first type of control motivates, rewards, guides, and promotes learning. The second type of controls are coercive, punishing, prescribing and are to control. These controls are opposing forces which both need to exist to ensure effective control.

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13 standards of performance” (Simons, 1995, p.59).Of the four levers, two categories can be made. Belief systems and interactive control systems are characterized to motivate, reward, guide and promote learning. The other two, boundary and diagnostic control systems are coercive, punishing and prescribing.

We can see some similarities between the modes of control of Ouchi (1979, 1975) and the levers of control of Simons (1995). The boundary systems, that is, codes of conduct for employees, can be compared with behavioral control, that is, instructions. Diagnostic control systems (as the communication of critical performance variables) can be compared with output control (the measurement and communication of performance). These are both defined by Simons (1995) as coercive, punishing and prescribing.

Performance management

In this paper, we focus on the increased result-oriented management within the healthcare sector. Result-oriented management can also be referred to as what Ouchi called output control (Snell, 1992) or performance management (Hartman & Tops, 2005). For the purpose of this study, we focus on a management control framework known as performance management. Management control in general is a broader concept, while performance management is specifically about the management and control of organizational performance (Ferreira & Otley, 2009). Ferreira & Otley (2009) view performance management systems as the evolving formal and informal mechanisms, processes, systems, and networks used by organizations for conveying the key objectives and goals elicited by management; for assisting the strategic process and ongoing management through analysis, planning, measurement, control, rewarding, and broadly managing performance; and for supporting and facilitating organizational learning and change.

There are four elements of the implementation of output controls, 1) defining the dimensions on which results are desired (or not desired), such as profitability, customer satisfaction or product defects; 2) setting performance targets for employees to strive for; 3) measuring performance on these dimensions; and 4) providing rewards to encourage the behaviors that will lead to the desired results.

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14 therefore whether the ability to measure outputs in fact is present. To determine, performance management in the context of the healthcare sector is elaborated upon in the next section.

2.3 Performance management within the Dutch healthcare sector

The use performance of management within the healthcare sector needs to be explained. As mentioned in the introduction, the implementation of performance management within the healthcare sector is advancing, but what kind of systems are specifically used and how is output control used within the healthcare sector?

The Dutch healthcare sector is composed of mostly non-profit organizations whose primary purpose is anything other than to make a profit (or, more precisely, to create wealth for its owners). For these organizations, the organizational goals are more ambiguous compared to for-profit organizations (Merchant & van de Stede, 2006). Not surprisingly, it is hard for non- profit organizations to implement a management control system. Even if a non-profit organization’s goals are quite obvious to all, managers of these organizations do not have any single, quantitative bottom-line performance indicator, like the profit indicator used by for-profit organizations. Therefore, for non-profit organizations it becomes difficult to (1) measure organizational performance in light of the overall goals and, thus, to use results control (including performance based incentives) even at the broad organizational level. Furthermore, it is difficult to (2) analyze the benefits of alternative investments or course of action, and to (3) decentralize the organization and hold entity managers accountable for specific areas of performance that relate exactly to the organization’s overriding goal. It is also more difficult to (4) compare the performance of subunits which perform different activities (Merchant & van der Stede, 2006).

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15 that non-profit organizations are facing different challenges. In regard to the theories of Ouchi (1979) we can conclude that the ability to measure outputs is low, so behaviour control would be suitable. However, as a result of governmental pressures there is an increased need for management control within the healthcare sector. The Dutch government has sought to increase transparency in the performance of medical institutions (van der Voort & Kerspershoek, 2010). The demands on the sector are such that there will be continuing pressure to achieve efficiency and other performance targets (Bach, 2004).

Increased transparency, pressure to achieve efficiency, and other performance targets increase the use of management control systems within the healthcare sector. Organisations within the healthcare sector for example introduced performance measurement systems and performance indicators which are now widely used within Dutch hospitals (van der Voort & Kerspershoek, 2010). A system to measure performance through performance indicators is, for example, the use of a balanced scorecard.

There is a shift within the healthcare industry from process-oriented healthcare to result-oriented management; for a budget constrained organization there will be a focus on performance funding (Weibel et al., 2009). Based on the theoretical and empirical literature we can conclude that there is an increased usage of management control systems within the healthcare sector. Result-oriented management will increase the use of performance management, and therefore, increase the use of output control. However, the healthcare sector is facing some different challenges, this study focus on the challenge to commit both managers and professionals of hospitals to performance measurement. This commitment is important in implementing performance measurement and motivating employees, which is explained in the next section.

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16 2.4 Motivation

In the near future there will probably be a shortage of healthcare personnel. Healthcare organizations emphasize the importance of the commitment of employees (Rijksoverheid, 2012), hence, motivation of employees will be more important. This section explains the relevant theories on motivation as mentioned in the psychology literature. The questions which arise are what is motivation and what motivates employees? The question what motivates employees is answered by the theories of intrinsic and extrinsic motivation.

To be motivated means to be moved to do something. A person who feels no inspiration to act is thus characterized as unmotivated, whereas someone who is energized or activated toward an end is considered to be motivated (Ryan & Deci, 2000). Within the literature motivation is defined broadly, Atkinson (1964) defines motivation as: “the contemporary (immediate) influences on the direction, vigor and persistence of action. “ Overall, definitions within the psychological literature give three determinants of motivation: (1) it gives direction to behavior, (2) it sets the intensity of behavior and (3) it sets the persistence of behavior. Motivation has been a central issue in the field of psychology. This is because motivation is highly valued of its consequences: motivation produces. Hence, motivation is of preeminent concern of those in roles which involve mobilizing others to act, such as a manager, teacher, religious leader, coach, healthcare provider, and parent (Ryan & Deci, 2000).

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17 persistence, performance and productivity (Guay et al., 2004). In contrast, an individual who is extrinsically motivated performs an activity, because it leads to a separable outcome. He or she does not engage in the activity for the inherent pleasure that may be experienced while performing it, but instead in order to receive something positive or to avoid something negative once the activity is competed (Deci, 1975). Specifically, intrinsic motivation includes challenge seeking and task enjoyment, whereas extrinsic motivation includes compensation seeking and recognition seeking, and these motivation components are conceptually and empirically distinct (Amabile et al., 1994 Miao and Evans, 2007; Miao et al., 2007). More predominant theories in the psychology literature are explained in the following section, management control systems and motivation.

2.5 Management control systems and motivation

To answer the research question, theories about the influence of management control on motivation, within the healthcare sector needs to be explained. High intrinsic motivation amongst employees is typical for the healthcare sector (Sanford, 2012). Therefore, this investigates intrinsic and extrinsic motivation. This section provides a theoretical overview, of the influence of management control on the motivation of employees.

As previously mentioned management control is about whether employees are likely to behave appropriately. Many management control theories emphasize the importance of extrinsic motivation that is related to pay for performance (Kunz & Linder, 2012) and other extrinsic benefits to get the employees motivated to reach the organizational goals. Nonetheless, it is important to understand the influence of management control on motivation of employees, including on the intrinsic motivation. Within the literature of management control, it is stated that performance management (output control) positively influence motivation (Merchant & van der Stede, 2006). But what are the mechanisms behind this relationship? And what is the relationship between output control and intrinsic motivation? This section provides answers to these questions.

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18 FIGURE 1: Steps of implementation of Output Control (Merchant & van der Stede, 2006)

Before explaining the relationship between management control and motivation, it is essential to know: how the employees of the healthcare sector are motivated. As mentioned in the literature on motivation, people can be motivated extrinsically or intrinsically. Prior studies explain (Deci et al., 1999) that intrinsic motivation can be lowered by extrinsic rewards. Within the healthcare sector a study has been conducted to investigate the level of intrinsic and extrinsic motivation. Sanford (2012) investigated how to engage employed physicians in hospitals. She concluded that physicians are not motivated by perceived rewards (such as money) or punishment (such as being “written up”) for meeting, or failing to meet, hospital objectives, such as productivity standards. Instead, they are motivated when they can learn or when they have interesting and challenging work. Employed physicians also tend to be motivated by achievement, recognition, and the ability to grow and

Step 2: Measuring performance on these dimensions

Step 3: Setting

performance targets for employees to strive for

Intrinsic motivation

Extrinsic motivation

Step 4: Providing rewards to encourage the

behaviors that will lead to the desired results

Intrinsic Motivation

Extrinsic motivation Step 1: Defining the

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19 advance in their careers. Within the psychology literature, the level of intrinsic and extrinsic motivation in the healthcare sector is not investigated to a large extent. Hence, the importance of investigating the level of intrinsic and extrinsic motivation in the healthcare sector is high. Accordingly, before investigating the relationship between extrinsic and intrinsic motivation and output control, it is sufficient to be aware of what the level of intrinsic and extrinsic motivation is. Following the study of Sanford (2012) we predict that the intrinsic motivation of employees is higher than the extrinsic motivatio in the healthcare sector. n

H1: The intrinsic motivation of healthcare employees is higher than the extrinsic motivation

Setting performance targets

The mechanisms which explain the relationship between step three, setting targets, and motivation is the goal setting theory of Locke (1988). The theory of Locke (1988) explains that by setting targets motivation of employees is higher. A goal is what an individual is trying to accomplish, that is it is the object or aim of an action. The basic assumption of the goal setting theory is that goals are immediate regulators of human action. When goals are set, employee’s actions become clearer, and hence goal setting can be defined as a motivational tool.

An individual who is extrinsically motivated performs an activity, because it leads to a separable outcome. He or she engages in an activity in order to receive something positive or to avoid something negative once the activity is completed. Extrinsic motivation increases by setting targets, and therefore, by implementing output control within the healthcare sector (Mossholder, 1980; Rawsthorne & Elliot, 1999; Shalley & Oldham, 1985). Also in the healthcare sector, we expect, that extrinsic motivation increases by setting targets. Therefore, the second hypothesis is as follows: H2: Setting targets within the healthcare sector results in higher extrinsic motivation of healthcare employees

Based on the theories of Locke (1988), goal setting leads to higher motivation, the study of Ordonez et al. (2009) identified several side effects associated with goal setting; including narrow focus that

Step 3: Setting performance targets for employees to strive for

Extrinsic motivation

Intrinsic motivation +

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20 neglects non-goal areas, distorted risk preferences, a rise in unethical behavior, inhibited learning, corrosion of organizational culture, and reduced intrinsic motivation. As goal setting increases extrinsic motivation, it can harm intrinsic motivation – engaging in a task for its own sake (Mossholder, 1980; Rawsthorne & Elliot, 1999; Shalley & Oldham, 1985). Managers tend to overvalue and overuse goals. Although people recognize the importance of intrinsic rewards in motivating themselves, people exaggerate the importance of extrinsic rewards in motivating others (Heath, 1999). In short, managers may think that others need to be motivated by specific, challenging goals far more often than they actually do. By setting goals, managers may create a hedonic treadmill in which employees are motivated by external means (e.g. goals and rewards) and not by the intrinsic value of the job itself (Deci, 1971; Deci, 1975).

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Providing rewards

There are several mechanisms, which explain the relationship between providing rewards and motivation in step four. Output control can motivate people through rewards explicitly linked to rewards to result measures. The rewards included in incentive contracts can be in the form of anything employees value, such as salary increase, bonuses, promotions, job security, job assignments, training opportunities, freedom, recognition and power (Merchant & van der Stede, 2006). Organizations can derive motivational value from linking any of these valued rewards to results that employees can influence. Pay-for-performance within the public sector has yielded some impressive results (Weibel, et al., 2009). A study by Weibel et al. (2009) investigates the relationship between pay for performance and intrinsic and extrinsic motivation within the public sector. They concluded that pay for performance has a positive effect on extrinsic motivation of the participants. As mentioned in the section on motivation, extrinsic motivation satisfies personal needs indirectly, that is, extrinsic motivation refers to doing something because it leads to separable outcomes such as monetary compensation (Ryan and Deci, 2000). Therefore, extrinsic compensation has a positive impact on extrinsic motivation.

The implementation of output control in the healthcare sector results in a shift of performance risk from management to employees. Hence, the need for immediate compensation, of employees in the healthcare sector, becomes salient (Cron, et al., 1988). Outcome control is therefore expected to have a positive impact on a person’s compensation seeking (Miao, 2007). Output control may be viewed as a market mechanism requiring relatively lower levels of management involvement in the direct monitoring and supervision of employees (Anderson & Oliver, 1987). Compensation seeking can be seen as a determinant of extrinsic motivation. Therefore the fourth hypothesis is as follows: H4: Extrinsic rewards result in higher levels of extrinsic motivation of healthcare employees

Output measurement can provide another positive motivational impact; people often derive their own internally-generated intrinsic rewards through a sense of accomplishment for achieving the desired results. Results control can give a sense of accomplishment, and thus, an intrinsic motivation to perform well (Merchant & van der Stede, 2006). However, pay for performance can harm intrinsic

Step 4: Providing rewards to encourage the

behaviors that will lead to

the desired results Intrinsic motivation Extrinsic motivation

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22 motivation (Deci, et al., 1999). Intrinsic motivation, under certain conditions, is proposed to be undermined by pay for performance: Giving someone a performance-contingent monetary incentive to do something they already enjoy can decrease his/her motivation to do it, as the person is then likely to view its action as externally driven rather than as internally appealing. Such incentive produce hidden costs (Lepper and Greene, 1978), which are also been referred to as corruption effect (Deci, 1975), over justification effect (Lepper and Greene, 1978) or the crowding out effect (Frey and Oberholzer-Gee, 1997. These might negatively impact performance. To conclude, when employees are intrinsically motivated, meaning they already enjoy doing something, extrinsic rewards can decrease their motivation and consequently negatively impact performance.

For this reason, especially the performance of interesting tasks is likely to suffer upon the introduction of performance-related pay (Ryan & Deci, 2000). Pay for performance has been shown to heighten the salience of external control and thus to reduce perceptions of self-determination (Deci,et al., 1999). Based on the theories of Ryan & Deci (2000), the fifth hypothesis is as follows: H5: Extrinsic rewards decrease the level of intrinsic motivation of healthcare employees

Commitment to objectives

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23 higher performance than vaguely formulated goals like ‘perform well’ or ‘try to finish this as quickly as possible’. (3) Commitment to objectives: Important with commitment to objectives is that these objectives are accepted as personal objectives (Erez, et al., 1985). This acceptance can be reached in several ways, for example by formulating objectives by the task performers. To conclude, performance will increase motivation when the objective is specific, it is difficult yet feasible to attain, and when the goals are accepted.

Van der Voort & Kerspershoek (2010) mention that one of the three challenges is to commit both management and professionals. They argue that a success factor for the implementation is the commitment of management and professionals. To overcome information asymmetry and to set the goals right, professionals need to provide information about the primary process. Commitment is needed before professionals are willing to provide information.

An important factor in goal setting is commitment to objectives, which need to be accepted as personal objectives (Erez et al., 1985). Hence, this study argues that both intrinsic and extrinsic motivation are higher when commitment to objectives is present. As a result, hypotheses 6a) and 6b) are as follows. :

H6a: Commitment to goals set by management results in higher extrinsic motivation of healthcare employees

H6b: Commitment to goals set by management results in higher intrinsic motivation of healthcare employees

2.6 Summary of literature review

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25 Chapter 3 Methodology

This part explains how the research question is answered: “What is the influence of performance management on the motivation of employees in the context of the healthcare sector?” The objective of this paper is to investigate the relationship between motivation and performance management, which includes giving advice to managers within the healthcare sector on how to implement performance measurement. This study tests different theories, of which the results could be generalized to the whole population, in this case, the employees within the healthcare sector. The hypotheses under study are tested through several statistical analyses. To investigate these hypotheses, the relationship between output control and motivation is investigated through a quantitative research method. That is, a questionnaire is used to address the main research question. This method is used as empirical positivist’s research easily generalizes to different contexts (Woodside, 2010). Academic research on motivation is mostly addressed by positivist’s empirical research; therefore, it is easier to use quantitative research in this study. The following section explains the data collection, after which the variables are described, followed by a description of the statistical analyses

3.1 Data collection

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26 TABLE 3

Number of employees working in the healthcare sector Healthcare sector Number of employees Academic hospitals 66.000

Hospitals 203.000

Nursing homes 435.000

Source: Rijksoverheid, 2012

Procedure

This study uses two phases to investigate the research question with the questionnaire. The first phase is to investigate whether the questionnaire used is readable, clear and understandable. The legal standard suggests that survey questions should always be pre-tested to assess whether they can be correctly understood by respondents and easily answered by them (Morgan, 1990). The second phase is the distribution of the questionnaire to employees within the healthcare sector.

Questionnaire

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Respondents

The questionnaire has been sent to employees of a single academic hospital in the Netherlands. An academic hospital has been chosen because they generally have already implemented a management control system. This academic hospital is comparable with other Dutch academic hospitals (see Table 4). The goal population of this study is therefore, nurses and medical specialist of the Dutch academic hospitals.

In total the questionnaire has been sent to 121 respondents (both nurses and specialists) with a respondence rate of 57,9%. To increase the respondent rate, a reminder e-mail was sent to the employees.

TABLE 4 Key Figures Hospital under Study and Dutch Mean

Hospital under Study (2012)1 Mean of 8 Dutch Academic Hospitals in 2011

Number of employees (31-12-2011) 9.897 9.2192

Operating income € 888.764.271 € 858.250.0002

Academic publications 3.353 1.3633

Number of beds (bedbezetting) 61% 71% 4

1

Annual report 2012

2

CBS 2013

3

Levi et al. (2013) (Mean in the period 1998-2010)

4

Ernst&Young 2013

3.2 Measurements

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Intrinsic and extrinsic motivation

Both intrinsic and extrinsic motivation are measured by the Work Preference Inventory (WPI) (Amabile et al., 1994). The major elements of intrinsic motivation are (self-determination, competence, task involvement, curiosity, enjoyment, and interest). The major elements of extrinsic motivation are (concerns with competition, evaluation, recognition, money or other tangible incentives, and constraint by others). The instruments are scored on two primary scales, each subdivided into two secondary scales. The two sub-factors of intrinsic motivation can be interpreted as Challenge (5 items) and Enjoyment (10 items), and the two extrinsic sub-factors can be interpreted as Compensation (5 items) and Outward (orientation toward the recognition and dictates of others, 10 items). The intrinsic motivation is measured by 15 items and the extrinsic motivation also by 15 items. In this research we use the same items to measure intrinsic and extrinsic motivation. The WPI is designed to assess individual differences in intrinsic and extrinsic motivational orientations. The WPI has meaningful factor structures, adequate internal consistency, good short-term test-retest reliability, and good longer term stability. The cronbach’s α is high enough for both intrinsic (0.79) and extrinsic (0.78) motivation. Furthermore, the re-test reliability is also high, intrinsic (0.84) and extrinsic (0.94). From this information we can conclude that the WPI is a good measure for both intrinsic and extrinsic motivation.

Independent variables

Performance measurement A study within the field of sales is used as an example for measuring output control. A study by Kholi et al. (1998) uses four questions to determine supervisory end-results orientation. Hence, step three (setting performance targets) and step four (financial rewards) of implanting output control is measured by the survey of Kholi et al. (1998). Several other sales studies use these questions also to determine output control (Miao, 2007). Due to the adaption within the field of sales, this study uses the same output control measures. However, the questions are adapted to the healthcare sector.

Commitment As mentioned in the literature, people are motivated to work when goal setting takes place. This relationship is only possible when these goals are specific, challenging and people are committed to these goals (Locke, 1988). As mentioned in the literature review, this study incorporates commitment to goals as a variable which increases the motivation.

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30 control variables must minimize the possibility of confounded results that limit the explanatory power of the model (Kish, 1959; Pedhazur & Schmelkin, 1991). The control variables used in this study are age, years of service and goal setting. Based on the research of Miao (2007) the control variables age and years of service have been chosen. Furthermore, as mentioned in the literature: motivation is higher when goal setting takes place, goals must be specific, challenging and people must be committed to these goals.

3.3 Statistical analysis

All variables are standardized in the statistical analysis; consequently the variables can be compared to each other. In order to generalize the data to the whole population of healthcare employees a statistical analysis is used. This study uses descriptive statistics, correlation analysis, a compare means test and a regression analysis. This section explains the assumptions tested and the statistical analyses used.

Assumptions

Before conducting a regression analysis, several assumptions need to be tested. These assumptions are tested as that breaching these assumptions could result in distorted results. These assumptions are formulated in Siero et al. (2009) :

• The dependent variables are normally distributed • the sample consists of independent observations

• there is no multicollinearity; meaning there is no correlation between the dependent variables

• the variance of the residuals is equal for every possible value of the independent variable, also called homoscendasticity.

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31 having more than 3.3 or less than -3.3 standard deviations (Field, 2005). Hence, all values that differ more that 3.3 standard deviations of the mean are removed from the data.

Afterwards the assumptions are tested. First of all, the normal distribution is examined by the skewness and kurtosis. The skewness is a measure of asymmetry of the distribution of the series around the mean. Kurtosis measures the peakedness or flatness of the distribution of the series. Based on previous academic research (Brooks, 2008, Huizingh, 2006), for this research the margins for a normal distribution are skewness between -1 and 1. The kurtosis of a normal distribution is 3 (Brooks, 2008; Huizingh, 2006). For this study the margins for a normal distribution is a skewness between -1 and 1 and a kurtosis between 2 and 4.

Second, a correlation analysis is conducted, to research whether the samples consists of independent observations. Multicollinearity implies correlation between explanatory variables. This results in a high correlation between the explanatory variables, which will lead to unreliable outcomes. Multicollinearity is tested by conducting bivariate correlations in SPSS. When correlation is higher than ρ=0.8 multicollinearity is a problem. Accordingly, values between ρ=0.3 en ρ=0.8 require more attention. When more attention is required, different regression models are used to investigate this problem. Within these models the independent variables will be once the dependent variable. For every independent variable the shared variance with the other independent variables is calculated by checking the Rj²: the percentage shared variance from the independent variable j, that can be explained by the other independent variables. A high Rj² means that there is a strong consistency between independent variable j and the other independent variables. This is measured by the variance inflation factor (VIF). When there a variables with a VIF higher than 4, muliticollinearity is a problem for these variables (Miles & Shevlin, 2001).

VIFj= 1/(1-Rj²)

Third, the linear relation is tested by conducting a residual scatter plot (Siero et al., 2009). When the linear relationship is present between the dependent and independent variables, all residuals are arbitrary spread around the mean.

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32 mean. The spread (variance) of the residuals is equal for every value of the dependent variable. When homoscedasticity is violated, impure standard errors and regression coefficients occur. To check statistically if homoscedasticity is violated a Koenker-Bassett test for equal variances is conducted. This test is robust also for small sample sizes (Koenker & Bassett, 1982). When heteroscedasticity comes to pass, a transformation of the dependent variable is needed. Therefore, a logarithm of the dependent variables is calculated (Siero et al., 2009), to decrease the heteroscedasticity.

Descriptive statistics

Descriptive statistics describe characteristics of the sample, which provide a summary of statistics such as the mean, maximum/minimum and standard deviation. These (location) statistics provide a first indication of the direction of the relationships tested.

Correlation analysis

The correlation analysis provides an indication to what extend the tested relationships are significant. A Pearsons r of -1 of 1 indicates a perfect negative or positive relation. A Pearsons r of 0,6 or above indicates a significant positive relation.

Compare means analysis

To investigate whether the intrinsic motivation is higher than the extrinsic motivation (Hypothesis 1) a compare means analysis is conducted. By executing a paired sample t test, the means of both variables are compared. When the p-value is lower than α=0.10, the intrinsic motivation differs significantly from the extrinsic motivation.

Regression Analysis

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33 Based on the hypotheses, all regression analyses use a one-tailed test. Because SPSS automatically uses two-tailed tests, the P-values are divided by two, to indicate whether they are significant or not.

TABLE 5 Variables Used Variables

Dependent variable

Extrinsic Motivation Measured by Work Preference Inventory (1994), by the following model: EM= ((- Question 8) + Question 9 + Question 11 + Question 13 + Question 17 + Question 19 + Question 22 + (- Question 23) + Question 25 + Question 26 + Question 28 + (- Question 29) + Question 31 + Question 32 + Question 36) /15

Intrinsic Motivation Measured by the Work Preference Inventory (1994), by the following model: IM = (Question 10 + Question 12 + Question 14 + Question 15 + (- Question 16) + Question 18 + Question 20 + (- Question 21) + Question 24 + Question 27 + Question 30 + Question 33 + Question 34 + Question 35 + Question 37) /15

Independent variables Explanatory variable

Targets Is measured by the following model: Targets = (Question 1 + Question 2+ Question 3+Question 4+Question5) / 5

Rewards Is measured by question 7

Commitment Commitment to goals, measured by goal setting theory of Locke (1988). Measured by question 41

Control variables Control variable 1: Goal setting theory, tested by the following model GST= (Question 37 + Question 38 + Question 39) Control variable 2: Age

Control variable 3: Years of service

Models tested

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34 Chapter 4 Results

In this section all statistical analyses are presented. First the assumptions tested are presented. Second the descriptive statistics of all variables are outlined. Third, a first indication of relationships the between variables is presented by a correlation analysis. At last, all hypotheses are tested and presented with their analyses. As mentioned in the methodology, the outliers and four different assumptions must be detected before conducting a regression analysis.

4. 1 Outliers and assumptions

Outliers

Independent variables. As mentioned in the methodology, outliers can have a disruptive influence on the regression analysis. Therefore, the outliers of the independent variables are checked by several box plots. According to these box plots, there are a few outliers (see Appendix A). To check whether these outliers influence the outcome of the regression analyses, the regression analysis is performed twice, one with and one without the outliers. All these outliers have a major influence on the beta-coefficients and the model fit. Therefore, only the regression analyses without these values are considered for the rest of this study.

Dependent variables. Tabachnick and Fidel (2007) define outliers as having a standard residual of more that 3.3 or less that -3.3 (Field, 2005). By performing a residual scatter plot the outliers of the dependent variable are detected. According to these plots, see Appendix A, there are not outliers.

Assumptions

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35 TABLE 6

Skewness and kurtosis of dependent variables used

Skewness St. Error Kurtosis St. Error

Extrinsic motivation -0.54 0.29 -0.07 0.57

Intrinsic motivation -0.30 0.29 0.64 0.57

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36 TABLE 7: Regression analysis dependent variables for multicollinearity

***, **, * Coefficient is statistically significant at 1%, 5%, and 10%, respectively (based on two-tailed tests).

TABLE 8: Regression analyses control variables for multicollineartiy

***, **, * Coefficient is statistically significant at 1%, 5%, and 10%, respectively (based on two-tailed tests).

Setting Targets Beta-value VIF Rewards Beta-value VIF Commitment Beta- value VIF

Rewards 0.10 1.27 Setting Targets 0.10 1.26 Setting targets -0.32 1.14

Commitment -0.34 1.20 Commitment 0.30 1.23 Rewards 0.29 1.18

Goal Setting 0.26 1.20 Goal Setting 0.19 1.24 Goal Setting 0.21 1.23

Age 0.36 1.92 Age -0.02 2.08 Age 0.30 1.96

Years of Service -0.36 1.85 Years of Service 0.26 1.94 Years of Service -0.34 1.87

F-value 2.55** F-value 2.69** F-value 3.22**

R² 0.21 R² 0.14 R² 0.26

Goal setting Beta-value VIF Age Beta-value VIF Years of service Beta-value VIF

Setting targets 0.26 1.19 Setting targets 0.22 1.17 Setting targets -0.23 1.17

Rewards 0.19 1.24 Rewards -0.01 1.29 Rewards 0.16 1.23

Commitment 0.22 1.28 Commitment 0.19 1.27 Commitment -0.22 1.24

Age 0.15 2.05 Goal setting 0.09 1.27 Goal Setting -0.002 1.29

Years of Service -0.004 2.02 Years of Service 0.66 1.11 Age 0.68 1.14

F-value 2.68** F-value 10.12*** F-value 9.57***

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37 Linear relationship The third assumption tested is the linear relationship between the dependent and independent variables. This assumption can be tested with the residual scatter plot, as in outlined Appendix A. When the linear relationship is present between the dependent and independent variables, all residuals are arbitrarily spread around the mean. In both residual plots the residuals are spread around the mean. Therefore we can assume that there is a linear relationship between the dependent and independent variables.

Homoscendasticity Also the assumption of homoscendasticity is checked by looking at the residual scatter plot (see Appendix A). If the variance of the residuals is constant, the residual plot shows a constant spread around the mean. The scatter plot shows that the spread (variance) of the residuals is equal for extrinsic motivation. Accordingly, from the Koenker-Bassett test for equal variances we derive that the H0 (=homoscendasticity) is not rejected. Therefore we can conclude that for extrinsic motivation homoscedasticity is prevalent. With heteroscedasticity the spread increases by the raise of intrinsic motivation. This leads to distorted estimates of the standard error and regression coefficients (Allison, 1999). Additionally, the Koenker- Bassett test provides a significant p-value (0.033) at a level of α=0.05 (see Table 9). Consequently, we can conclude that for intrinsic motivation heteroscendasticity is present. Therefore, the variable intrinsic motivation needs to be converted according to a variation stabilizing transformation, like a logarithm (Siero, 2006). The scatter plot of the logarithm of extrinsic motivation shows that the residuals are constant to the mean. Because intrinsic and extrinsic motivation are to be compared in the analysis, although the variance of the residuals of extrinsic motivation is constant, extrinsic motivation is also converted with a logarithm. TABLE 9 : Koenker- Bassett test for equal variances

Dependent variables Koenker-Bassett Chi Squared P-value

Extrinsic motivation 8.41 0.21

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38 4.2 Descriptives and correlation analysis

In this section the descriptives and the correlation analysis are presented. This information provides a first indication of the direction of the relationships between the dependent variables (intrinsic and extrinsic motivation) and the independent variables.

TABLE 10: Descriptive statistics

N Minimum Minimum

*

Maximum Maximum * Mean Mean* Std. deviation Std.

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39 In Table 10 all descriptive statistics are presented. What strikes is the difference between the mean of extrinsic (̅=1.88) and intrinsic (̅=2.94) motivation. To investigate whether this difference is significant for the population, a paired sample t test is conducted. Accordingly, the mean of setting targets (̅=3.42), output control (̅=3.23), goal setting (̅=3.17) and commitment (̅=3.8) are all higher than the average 5point Likert scale of 2.5. The mean of the variable reward is 1.80, which is quite low.

Correlation analysis

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40 4.3 Hypotheses testing

In this section we test the hypotheses. To investigate hypothesis 1, a paired-sample T test is conducted. Second, several regression analyses are conducted to investigate whether we can confirm or reject hypothesis 2 untill 6.

Compare means

Hypothesis 1

The first hypothesis is formulated as:

H1: The intrinsic motivation of employees within the healthcare sector is higher than the extrinsic motivation

TABLE 11

Paired Sample T test

N Mean SE 95% Confidence Interval T-test Df

Lower Upper Extrinsic motivation 70 1.87 0.04 1.8 1.95 -19.68 (α<0.001) 69 Intrinsic motivation 70 2.94 0.04 2.86 3.03

As mentioned in the descriptive section, the mean of extrinsic motivation (̅=1.87) and intrinsic motivation (̅=2.94) differ. From this table we can derive that this difference is significant. As shown in Table 11 the 95% confidence interval of extrinsic motivation is between 1.8 and 1.95, and the 95% confidence interval of intrinsic motivation is between 2.86 and 3.03. The paired-sample T-test shows that there is a significant difference between intrinsic and extrinsic motivation (T=-19.68 α<0.001). The mean of intrinsic motivation is significantly higher than extrinsic motivation, the H0 hypothesis (H0 ̅1=̅2) that the two means are the same can therefore be rejected. We can assume that there is

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41

Regression analysis

By five different multiple regression models (one regression analysis to test the control variables, two regression analyses with dependent variable extrinsic motivation and two regression analyses with dependent variable intrinsic motivation), all hypothesis are tested within SPSS. First the control variables are checked on whether they are good predictors for extrinsic and intrinsic motivation. Control variables In this table the regression analysis of the control variables is presented:

TABLE 12:Regression analysis control variables

Extrinsic motivation Intrinsic motivation

Beta-value P-value Beta-value P-value

Constant -0.09(0.12) 0.02(0.12) Goal setting 0.29***(0.12) 0.02 -0.06(0.13) 0.63 Age -0.12(0.15) 0.41 0.02(0.16) 0.88 Years of service -0.05(0.16) 0.74 -0.01(0.17) 0.94 R Squared 0.09 0.003 R Adjusted Squared 0.05 -0.04 F value 2.24* 0.09 0.08 0.97

***, **, * Coefficient is statistically significant at 1%, 5%, and 10%, respectively (based on two-tailed tests). The p-value mentioned in this table is based on two-tailed tests. Numbers mentioned are the beta values of the regression analysis and the numbers in the parentheses are standard errors.

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42 Hypothesis 2 The second hypothesis is formulated as:

H2: Setting targets within the healthcare sector results in higher extrinsic motivation of employees TABLE 13

Regression analysis extrinsic motivation and setting targets Beta coëfficiënt P-value

Constant 0.02(0.12) Goal setting 0.23*(0.12) 0.05 Age -0.16(0.15) 0.30 Years of Service -0.02(0.16) 0.91 Targets 0.17*(0.13) 0.17 R Squared 0.12 R Adjusted Squared 0.06 F value 2.18* 0.08

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43 Hypothesis 3 The third hypothesis is formulated as:

H3: Setting targets within the healthcare sector results in lower intrinsic motivation of employees

TABLE 14

Regression analysis intrinsic motivation and setting targets

Beta coëfficiënt P-value

Constant -0.05(012) Goal setting -0.13(0.13) 0.33 Age -0.03(0.16) 0.84 Years of service 0.04(0.16) 0.78 Targets 0.28***(0.13) 0.03 R Squared 0.07 R Adjusted Squared 0.02 F value 1.13 0.29

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44 Hypothesis 4 The fourth hypothesis is formulated as:

H4: Extrinsic rewards result in higher levels of extrinsic motivation of healthcare employees

TABLE 15

Regression analysis extrinsic motivation and rewards

Goal setting 0.24(0.13) 0.03 Age -0.13(0.15) 0.41 Years of Service -0.05(0.16) 0.74 Rewards -0.02(0.13) 0.90 R Squared 0.09 R Adjusted Squared 0.04 F value 1.67 0.17

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45 Hypothesis 5 The fifth hypothesis is formulated as:

H5: Extrinsic rewards lead to lower levels of intrinsic motivation of healthcare employees TABLE 16

Regression analysis intrinsic motivation and rewards

Goal setting 0.03(0.13) 0.81 Age 0.06(0.16) 0.70 Years of Service 0.02(0.16) 0.92 Rewards -0.31***(0.13) 0.02 R Squared 0.09 R Adjusted Squared 0.03 F value 1.59 0.19

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46 Hypothesis 6 The sixth hypothesis is formulated as:

H6a: Commitment to goals set by management result in higher extrinsic motivation TABLE 17

Regression analysis extrinsic motivation and commitment

Beta coefficients P-value

Goal setting 0.38(0.12) 0.003 Age -0.08(0.15) 0.58 Years of Service -0.13(0.16) 0.36 Commitment -0.32***(0.12) 0.01 R Squared 0.18 R Adjusted Squared 0.13 F value 3.57*** 0.01

The fifth regression model investigates the relationship between extrinsic motivation and commitment. The model in Table 17, shows a significant F-value at a level of α=0.05 (F=3.57, p=0.01) and a relative high R² (R²=0.18). The beta coefficient of goal setting in this model is significant (beta=0.38 p=0.003). Accordingly, the beta coefficient of commitment is significant at α=0.01 in this model (beta=-0.32). When commitment is higher, extrinsic motivation is lower, however a positive beta-coefficient is expected in the regression. Therefore, the H0 hypothesis (there is no linear relationship) is rejected, however a reversed linear relationship is found.

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47 TABLE 18

Regression analysis intrinsic motivation and commitment

Goal setting 0.02(0.13) 0.89 Age 0.06(0.15) 0.69 Years of Service -0.09(0.17) 0.57 Commitment -0.29***(0.13) 0.03 R Squared 0.08 R Adjusted Squared 0.02 F value 1.34 0.26

The last hypothesis 6b, investigates the explanatory relationship between intrinsic motivation and commitment. The models shows a low R² and no significant F-value (R²=0.08 F=1.34, p=0.26), the prediction of this model for intrinsic motivation is low. However, the variable commitment is a significant explanatory variable. In this model the beta coefficient of commitment is beta=-0.29 and significant at a level of α=0.05. This regression analysis shows that intrinsic motivation is lower, when commitment is higher. However, a positive beta value was expected, as a result, the H0 hypothesis is rejected. Nonetheless, a reversed relationship is found.

4.5 Conclusion

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49 Chapter 5 Conclusion and discussion

In this part the results of the analyses are linked to the theories mentioned in the literature review. This section provides answers to the following questions. Most of the hypotheses are rejected, but what theory is confirmed or rejected? And what are the explanations for these rejections? Moreover this section addresses to the research question:

What is the influence of performance management on the motivation of employees in healthcare organizations?

5.1 Control variables

The control variables used in this study are age, years of service and goal setting. Both age and years of service are no predictors for intrinsic and extrinsic motivation, as there is no relationship between age, years of service and motivation, which contradicts the analysis of Miao (2007). Nevertheless, goal setting is a good predictor for extrinsic motivation. According to the theories of Locke (1988), motivation is higher when goals are specific, challenging and when employees are committed to these goals. The theories of Locke (1988) are partly confirmed. When goals are specific and challenging the extrinsic motivation increases, however, there is no effect found on intrinsic motivation.

5.2 Hypotheses testing

Intrinsic and extrinsic motivation

H1: The intrinsic motivation of employees within the healthcare sector is higher than the extrinsic motivation