MASTER THESIS HRM
P. OOMS
Student number: 2982609
University of Groningen
Nestelbosje 2
9747 AE Groningen
Tel: +31 6 81 431 215
e-mail: p.ooms@student.rug.nl
Supervisor dr. H.J. van de Brake
11 June 2017
2 THE MODERATING ROLE OF PROCEDURAL JUSCTICE BETWEEN PAY FOR
PERFORMANCE AND INTRINSIC AND EXTRINSIC MOTIVATION
ABSTRACT
Many companies use a pay-for-performance (PFP) plan to enhance the extrinsic motivation of their employees. Employees could become extrinsically motivated to put forth the effort needed to achieve the extrinsic rewards. On the other hand, the self-determination theory suggests that PFP could lead to an undermining of intrinsic motivation. I therefore expected that PFP is positively related to extrinsic motivation and negatively related to intrinsic motivation. I further proposed that a high perceived procedural justification of employees could moderate in the relation between PFP and motivation. I expected that a high perceived procedural justification leads to a stronger extrinsic motivation and a weaker negative effect on intrinsic motivation. To test these hypotheses, a survey was conducted among Dutch employees from several companies (N=92) who received commissions based on their performance. Results confirmed that when employees’ perceived procedural justification is high, the extrinsic motivation of employees could become stronger. Unexpectedly, I did not find evidence of the moderating effect of procedural justice in the negative relationship between PFP and intrinsic motivation.
Keywords:
3 INTRODUCTION
Managers generally agree that motivated employees are crucial to an organization’s success. The question that remains is how to motivate employees. Offering employees a pay-for-performance (PFP) plan is one of the most common approaches to motivating employees (Ogbonnaya, Daniels & Nielson, 2017). PFP usually takes the form of commissions offered to employees based on performance assessments (Banfield & Kay, 2012). Companies can
implement PFP to enhance the extrinsic motivation of their employees. Employees become extrinsically motivated when they perform tasks to gain rewards or to avoid punishment (Porter & Lawler, 1968). The underlying assumption for companies to implement PFP plans is the fact that employees may put forth more effort when they can earn more money. This assumption is in line with expectancy theory, which suggests that employees’ extrinsic motivation is stronger when a stronger link exists between performance and rewards (Bartol & Durham, 2000; Bonner & Sprinkle, 2002; Kahn & Sherer 1990; Lawler, 1971).
Previous research on motivational literature indicates that PFP has an important downside. The self-determination theory suggests that the implementation of PFP leads to the undermining of the intrinsic motivation of the employee (Cheang & Appelbaum, 2015). An employee with intrinsic motivation, in contrast to extrinsic motivation, performs an activity for no apparent reward except for that which comes from the activity itself (Turnage & Muchinsky, 1976). Such motivation has been associated with improved concentration,
4 Nisbett, 1973; Robbins & Judge, 2015). The issue of the undermining of intrinsic motivation may be an important consideration for companies when implementing PFP plans.
My aim in this study was to examine the relationship between PFP and extrinsic as well as intrinsic motivation and to indicate the circumstances under which the positive effects of PFP on extrinsic motivation could become stronger and the negative effects of PFP on intrinsic motivation could become weaker. Previous research indicates that perceived fairness, including distributive and procedural justice, may strongly influence employees’ reactions to pay increases and could have a positive effect on work-related outcomes, such as motivation (Floger & Konosky, 1989; Hartmann & Slapnicar, 2012). I therefore expected the perceived procedural justice of employees to moderate the relationship between PFP and motivation. Procedural justice is the perceived fairness of the process used to determine the distributions of rewards (Robbins et al., 2015). This study focused on procedural justice, as employees will often accept low commissions if they believe that the commissions stem from a fair process (Van den Bos, Lind & Wilke, 2001).
First, I expected that a high perceived procedural justice perception of employees could lead to a stronger relationship between PFP and extrinsic motivation. When employees perceive high procedural justice, they feel that their commissions are based on their
contributions: their competences and efforts (Sung, Choi & Kang, 2017). This feeling could energize employees to put forth more effort to completing their tasks or activities (White, 1959). Thus, when employees at a company perceive that their commissions are truly based on their actual, objective performance and hence that the commission procedure is
procedurally justifiable and fair, they become extrinsically motivated to put forth more effort to achieve the commissions (Bartol et al., 2000; Bonner et al., 2002; Kahn et al., 1990; Lawler, 1971). On the other hand, I expected that when employees perceive their
5 employees. Low perceived procedural justice could give employees the feeling that
commissions are unreachable and are not based on their contributions. This feeling could negatively affect extrinsic motivation because the employees would not be driven to put forth effort to achieve the commissions (Ke & Zhang, 2010; Deci et al., 2008).
Second, I expected that a high perceived procedural justice perception of employees could weaken the negative relationship between PFP and intrinsic motivation. An extrinsic commission based on performance could have an intrinsic effect in that it could be a sign to an employee that he or she is doing a good job and that his or her work is an important contribution to the company. The commission would then be seen, through the employee’s perceived procedural justice, as a compliment and would give the employee more pleasure and satisfaction with his or her work (Rynes, Gerhart, & Parks, 2005). On the other hand, I expected that when employees perceive their commissions to be inadequate feedback (unclear or unfair) and not to be procedurally justifiable, the negative relationship between PFP and intrinsic motivation would become stronger. The inadequate feedback would cause more distrust among the employees, and thus, their efforts and interest in the task would suffer (Kluger & DeNisi, 1996; Leung, Su, & Morris, 2001; Robbins et al., 2015).
6 emphasize future research directions. Together, this will provide an answer to the following research question: “To what extent does procedural justice affect the relationship between pay-for-performance and an employee’s intrinsic and extrinsic motivation?”
--- Figure 1 here ---
THEORY AND HYPOTHESES Motivation and PFP
Without motivation, employees are not actively engaged in their work. Motivation is the process that accounts for an individual’s intensity, direction, and persistence of effort toward attaining a goal (Robbins et al., 2015). When employees are motivated, they stay with a task long enough to achieve their goals (Robbins et al., 2015). According to the motivation literature, two types of motivation exist: intrinsic and extrinsic. First, employees are
extrinsically motivated when they work toward completing tasks on the basis of “external” factors, which may be monetary, such as salary, benefits, promotion, and incentives (Banfield et al., 2012; Adeola & Adebiyi, 2016). In other words, employees are extrinsically motivated when they engage in work to attain goals that are separate from the work itself (Amabile, 1994). Second, employees are intrinsically motivated when they perform activities for no apparent reward except for the activities themselves (Turnage et al., 1976). In other words, intrinsically motivated employees enjoy performing the actual tasks or the challenge of successfully completing certain tasks (Deci & Ryan, 2000).
7 (Milkovich, Newman & Gerhart, 2013; Gerhart, Rynes & Fulmer, 2009). The goals of the entire company are broken down by department and seniority, and each employee in the PFP scheme is assigned a number of objectives to achieve in a given period (Banfield et al, 2012). A key requirement of PFP is therefore the ability to measure accurately and consistently what performance is defined as. After all, the pay reward reflects the extent to which the measure is met (Banfield et al, 2012).
The popularity of commission payments has increased in recent years and potentially apply to all categories of employees, which suggests that it is particularly important to examine the effects of PFP on motivation in work organizations (Sturman & Short, 2000; WorldatWork, 2012; Banfield et al., 2012). Commissions are based on individuals’ task performance but do not increase employees’ base pay. Therefore, commissions are attractive from a company perspective because they link pay to performance but do not increase a company’s fixed labour costs (Milkovich et al., 2013). This paper focuses on PFP as a commission based on an employee’s performance.
PFP and extrinsic motivation
When an employee acts with external motivation, he or she has the intention of obtaining a desired consequence or of avoiding an undesired one. As such, he or she is energized into action only when the action is instrumental to those ends (Ke et al., 2010). When companies implement PFP plans, their assumption is that this would enhance the extrinsic motivation of their employees, as their expectation is that the more money an
employee can earn, the greater his or her effort will be. A commission is therefore an extrinsic factor that could energize employees into action (Deci et al., 2008; Lepper et al., 1973;
Robbins et al., 2015).
8 Bonner et al., 2002; Kahn et al., 1990; Lawler, 1971). Commissions that are strongly tied to individual performance increase employees’ effort, and such increased effort is supposed to lead to increases in performance (Bartol et al., 2000; Eisenhardt, 1989). In other words, external motivation drives an employee to work hard to get the expected commission, especially when the commission is performance contingent, as the employee must strive for participation outcomes that the PFP plan requires (Roberts, Hann & Slaughter, 2006; Ke et al., 2010). Furthermore, PFP could lead to competition between employees. The tournament theory proposes that employees compete with one another for higher rewards. This
competition could enhance an employee’s effort to achieve the commission (Becker & Huselid, 1992). The more effort the employees put forth, the more likely they are to earn higher rewards than their colleagues do. The competition between employees is an external factor, besides the commission itself, that could enhance the extrinsic motivation of
employees.
All of the above suggests that PFP consists of external forces, such as a commission itself and competition, that drive employees’ external motivation to increase their efforts and that lead to higher performance. Therefore, I expected that PFP is positively related to the extrinsic motivation of an employee.
Hypothesis 1. PFP is positively related to extrinsic motivation. PFP and intrinsic motivation
9 motivation. Employees could perceive a commission based on performance to be a control factor and could therefore switch their motivation from intrinsic to extrinsic (Deci et al., 2008, Lepper et al., 1973, Robbins et al, 2015).
Furthermore, employees may feel that the company is not recognizing their competence, which decreases their intrinsic motivation (Frey, 1997). This is because
commissions could be focused on objectives that may not recognize all of the competences of their employees. In addition, when companies offer commissions based on performance, employees perceive their intrinsic motivations to be unnecessary—that is, the task is now “over justified” by the combination of intrinsic and extrinsic motivations (Underhill, 2016). For example, a computer programmer values writing codes because he or she likes to solve problems. A company then institutes a reward for working toward an extrinsic standard, such as writing a certain number of lines of code every day. When the employee does not accept the extrinsic standard, he or she could feel coerced, and his or her intrinsic motivation may consequently suffer (Robbins et al., 2015).
All of the above suggests that PFP leads to a switch from internal to external
motivation, and therefore, I expected that PFP is negatively related to the intrinsic motivation of an employee.
Hypothesis 2. PFP is negatively related to intrinsic motivation. Procedural justice as moderator
10 that they have some control over the outcome and when an adequate explanation for the outcome that occurred exists (Robbins et al, 2015). Besides that, procedural justice leads one to be satisfied, to feel committed (to the group or organization), and to have high performance motivation. It appears that in the context of PFP, procedural justice may be particularly
relevant to an employee’s overall motivation (Steensma & Visser, 2007). Several studies across industries and organizational levels suggest that employees whom their organization treats fairly are more motivated and perform better than do employees who perceive their work environments to be unfair (Colquitt, Conlon, Wesson, Porter & Ng, 2001; Hartmann et al., 2012).
Procedural justice as moderator between PFP and extrinsic motivation
When employees feel that their commissions are based on their actual individual performance, they become more extrinsically motivated to put forth the effort needed to achieve the commissions (Bartol et al., 2000; Bonner et al., 2002; Kahn et al., 1990; Lawler, 1971). I expected that this relationship could become stronger when employees perceive the commission procedure to have high procedural justification. High perceived procedural justification gives employees the feeling that they can achieve commissions based on their contributions, which depend on their competences and efforts (Batt, 2002; Larkin, Pierce & Gino, 2012). Through this strong sense of safety, employees can improve their competences and maximize their contributions’ value to achieve the commissions (Sung et al., 2017).
11 the employees attaining of the valued outcomes within it. In other words, through perceived procedural justice, employees feel that their commissions are based on their competences, which energizes employees to put forth more effort.
On the other hand, when employees perceive a company commission to have low procedural justification and thus to be unfair, the commission will not extrinsically motivate them. In a sales company, for example, an employee can receive a commission if he or she sells five items in one day. Before the company introduced the commission, the record of sales was four items in one day. This record was quite unique and required many competences from the employees. Furthermore, employees were not invited to participate in the company’s compensation procedure. The employees may perceive the new commission to have low procedural justification, thus resulting in a loss of credibility of the performance rating among employees and therefore triggering concerns about the commission’s fairness (Risher, 2014). The loss of credibility of the performance rating could lead to an undermining of employee engagement and therefore contribute to absenteeism, turnover, and poor performance (Risher, 2014).
In addition, employees can become extrinsically motivated when they want to obtain the required outcome (Ke et al., 2010; Deci et al., 2008). When employees perceive their commissions to have low procedural justification, they do not feel as though their
12 All of the above suggests that procedural justice moderates the relationship between PFP and extrinsic motivation. When employees perceive high procedural justice, their extrinsic motivation becomes stronger.
Hypothesis 3. Procedural justice moderates the positive relationship between PFP and extrinsic motivation in such a way that this relationship is stronger when procedural justice is high rather than low.
Procedural justice as moderator between PFP and intrinsic motivation
I expected that procedural justice also moderates the relationship between PFP and intrinsic motivation. When employees perceive the commission of their company’s PFP plan to be adequate feedback and procedurally justifiable, the negative relationship between PFP and intrinsic motivation will likely not be present. In an estate agency, for example, dividing houses effectively among employees is important so that houses that are fast and easy to sell (houses in the city center) and houses that are difficult to sell (houses in rural areas) are equally divided. The feedback embedded in pay outcomes influences the overall effects of pay on intrinsic motivation (Ryan, Mims & Koester, 1983). When employees perceive the company’s PFP system to be fair and procedurally justifiable (for example, the houses in the previous example that are equally divided among employees), the feedback from the
commission could have an intrinsic effect on the employee. The commission may signal to the employee that he or she is doing a good job and that his or her work is an important
contribution to the company. The commission would then be seen as a compliment and give the employee more pleasure and satisfaction with his or her work (Rynes et al., 2005).
As mentioned before, the shift from internal to external motivation when a company uses a PFP plan comes from the fact that employees feel that the company is not recognizing their competences and that they feel that the reward is controlling them (Frey, 1997).
13 employees and gives employees the opportunity to decide how they perform their tasks, the negative aspects that stimulate the shift from internal to external motivation disappear (Rynes et al., 2005). Furthermore, when employees accept the commission as accurate feedback, the feedback facilitates employees’ attention to and focus on improving their performance (Kluger et al., 1996; Leung et al., 2001).
In contrast, I expected that when employees perceive the commission of the PFP plan to be unfair and not procedurally justifiable, the negative relationship between PFP and intrinsic motivation becomes stronger. When the houses in the previous example are no longer equally divided, employees will no longer link their performance to the outcomes of their work because they will think that good achievements come from good luck and that bad achievements come from bad luck. Employees could perceive the commission to be
procedurally unjustifiable because they could not influence the markets of the specific areas in which the houses are located. The feedback of the commission that is perceived to be
inaccurate can distract the employee from determining the real intentions of the feedback source and his or her level of performance (Kluger et al., 1996; Leung et al., 2001).
Furthermore, the feedback might reduce the efforts and interest of the employees (Robbins et al., 2015) in such a way that the employees feel that the amount of effort they put forth does not matter, and this can have a negative influence on intrinsic motivation.
As mentioned before, employees perceive a company’s commission procedure to be procedurally fair when they feel that an adequate explanation exists for it (Robbins et al., 2015). If the company cannot explain why it has divided the houses in a particular way in the previous example, intrinsic motivation could decrease because the company is signalling that the tasks are burdensome, unpleasant, and costly (Underhill, 2016). In this case, the
14 has divided the commission unequally and that it is pessimistic about the employee’s
competence, work ethic, or motivation. The feedback tied to the commission would ultimately lower the employee’s confidence in his or her own skills and cause him or her to feel distrust in the company (Underhill, 2016).
All of the above suggests that procedural justice moderates the relationship between PFP and intrinsic motivation. When employees perceive high procedural justice, their intrinsic motivation does not decrease.
Hypothesis 4. Procedural justice moderates the negative relationship between PFP and intrinsic motivation in such a way that this relationship is weaker when procedural justice is high rather than low.
METHODS
The goal of the study was to measure if employees perceive the commissions they receive as procedurally justifiable, and what the effect is on the relationship between PFP and intrinsic motivation and between PFP and extrinsic motivation.
Design and participants
To test the hypotheses, a survey was conducted among 92 employees who received commissions based on their performance. The sample consisted of 46 males (50%) and 46 females (50%). The employees were contacted by email, personally, or through social media and were randomly selected from different companies and branches. The employees were asked to fill in an online, anonymous survey containing statements about their intrinsic motivation, their extrinsic motivation, and procedural justice. The online survey was translated to Dutch by using a double-blind back translation procedure.
Attention checks
15 excluding respondents with missing date and/or failed attention checks, a final sample of 92 participants remained.
Measures
Participants were requested to indicate their personal levels of agreement or
disagreement with the statements by responding to them on a seven-point Likert scale ranging from 1 (“totally disagree”) to 7 (“fully agree”) (Vagias & Wade, 2006). To measure extrinsic motivation, the extrinsic motivation scale from Ambile (1994) was used. An example item of this instrument is “I am strongly motivated by the money I can earn.” I completed a
Cronbach’s Alpha reliability test for the variable extrinsic motivation based on the 92 participants (α= .75). To measure intrinsic motivation, the intrinsic motivation scale from Mueller, Jennifer, and Dishan Kamdar (2011) was used. An example item of this instrument is “I am motivated by my work because I enjoy the work itself.” I completed a Cronbach’s Alpha reliability test for the variable intrinsic motivation based on the 92 participants (α= .89). To measure (perceived) procedural justice, the procedural justice scale from
Colquitt, Jason, and Rodell (2011) was used. An example item of this instrument is “Are you able to express you view during the procedure?” (seven-point scale, from 1 = totally disagree to 7 = fully agree). I completed a Cronbach’s Alpha reliability test for variable procedural justice based on the 92 participants (α= .72).
Control variables
16 characteristics (Kim, 2016). Age was measured on a six-point Likert-type scale (1= 24 years or younger, 2= 25-34, 3= 35-44, 4= 45-54, 5= 55-64, 6= 65 years or older). Finally,
organizational tenure was included because it could directly impact job relationships. Employees with high organizational tenure could be more sensitive to perceiving justice (Ohana, 2013). To assess tenure, employees indicated how many years they had worked at the company. Responses were coded as follows: 1= less than 1 year; 2= 1-3 years; 3= 3-5 years; 4= 5-10 years; and 5= older than 10 years.
Analysis.
I used ordinary regression analysis to test the study hypotheses. Prior to the analyses, I standardized all independent variables to avoid multicollinearity and to facilitate the interpretation of interaction effects (Grewal, Cote & Baumgartner, 2004).
RESULTS
Descriptive statistics
17 employee and the degree to which he or she is intrinsically motivated. The other variables present in Table 1 did not correlate significantly with one another.
--- Insert Table 1 about here --- Hypotheses testing
The results of the regression analysis on extrinsic motivation are present in Table 2. A marginally significant main effect of PFP was found (β= .26, p <.10), indicating that a marginally significant difference exists in the extrinsic motivation of an employee when a different level of PFP is present. Therefore, hypothesis 1 was supported, indicating that PFP has a positive effect on extrinsic motivation. Furthermore, a significant main effect of
procedural justice was found (β=.34, p <.01), indicating that a significant difference exists in the extrinsic motivation of an employee when the employee perceives his or her commission to have high or low procedural justification. The interaction effect between PFP x Procedural justice (β=.30, p <0.10) was marginally significant, indicating that a marginally significant difference exists in the extrinsic motivation of an employee when PFP and procedural justice are combined. Therefore, hypothesis 3 was supported, indicating that procedural justice moderates the positive relationship between PFP and extrinsic motivation. The relationship between PFP and extrinsic motivation is stronger when procedural justice is high rather than when it is low. The interaction effect between PFP and procedural justice on extrinsic motivation is shown in Figure 2.
18 effect of intrinsic motivation exists when a company uses a PFP plan. Furthermore, no
significant main effect of procedural justice was found (β=.17, p >.10), indicating that no significant difference exists in the intrinsic motivation of an employee when the employee perceives his or her commission to have high or low procedural justification. The interaction effect between PFP and procedural justice (β=.09, p >.10) was also not significant, indicating that no significant difference exists in the intrinsic motivation of an employee when PFP and procedural justice are combined. Therefore, hypothesis 4 was not supported, indicating that the negative relationship between PFP and intrinsic motivation would not be moderated through procedural justice. This interaction effect between PFP and procedural justice on intrinsic motivation is shown in Figure 3.
--- Insert Table 2, Figure 2 and Figure 3 about here ---
DISCUSSION
The main goal of this study was to investigate if procedural justice moderates the relationship between PFP and the motivation of employees. The results support that PFP is positively related to extrinsic motivation and that the effect could become stronger when the employees perceive high procedural justice rather than low procedural justice. I did not find support for the negative relationship between PFP and intrinsic motivation. Finally, no
support was found for the moderating effect of procedural justice for the relationship between PFP and intrinsic motivation.
Theoretical contributions
Altogether, these findings suggest that when employees’ perceived procedural justification is high, the extrinsic motivation of employees could become stronger. As
19 they can achieve commissions based on their contributions, which depend on their
competences and efforts (Batt, 2002; Larkin et al., 2012). Therefore, employees could
improve their competences and maximize their contribution value to achieve the commissions (Sung et al, 2017). The results suggest that not only commissions but also fairness can
extrinsically motivate employees (Nafzinger, 2010). Hence, the results of this study confirm a recent claim by Risher (2014) that as long as PFP is perceived as fair, it could be a very effective policy. This is in line with my findings that when employees perceive PFP to be unfair and thus to have low procedural justification, a PFP plan does not extrinsically
motivate employees. This increase of extrinsic motivation is the main reason for companies to implement PFP plans (Ogbonnaya et al, 2017). Hence, it appears that a high procedural justification is crucial for companies that implement PFP plans to increase their employees’ extrinsic motivation.
20 Unexpectedly, I did not find evidence of the moderating effect of procedural justice in the negative relationship between PFP and intrinsic motivation. This could probably be explained by the concept of intrinsic motivation and its interaction with other variables. Amabile and Kramer (2007) suggested that the use of external influences, such as a PFP system, leads the researchers to attach importance to the perceptions, motivation to work, and emotional statuses of employees. This could indicate that an interaction could exist among these three aspects. Thus, when we look at the current study, the problem could be that I focused exclusively on intrinsic motivation as an isolated concept, even though people’s perceptions and emotional statuses could influence intrinsic motivation.
Limitations and future research
When interpreting the results of this study, being aware of some limitations is important. The first limitation is that the perceived procedural justice among employees can be subjective; what one person sees as unfair, another may see as perfectly appropriate (Robbins et al., 2015). This indicates that the same PFP plan could be fair in one employee’s eyes and unfair in another employee’s eyes, even though employees receive the same
commission amount for the same achievement. The cultural preferences of each group could influence this, for example. Materialistic cultures are more likely to see cash compensation and rewards as the most relevant outcomes of work, whereas relational cultures will see social rewards and statuses as important outcomes (Robbins et al, 2015). The data from this study are generated from the Dutch workforce. Further research could examine if procedural justice perceptions would be different when other cultures or countries are examined.
21 If a commission is designed well, it can be an important source of value creation, but if it is designed poorly, it can be an important source of destruction (Lazaer & Gibbs, 2010). In this study, I could not objectively determine if the commission based on performance was well designed. Future research could objectively determine if the PFP plan is well designed upon performance if the researchers, for example, restrict their research to one company or to one specific branch.
The third limitation is the fact that the level of motivation varies both between individuals and within individuals at different times (Robbins et al., 2015). This study measured the level of intrinsic and extrinsic motivation at one specific point in time. It is possible that the answers from the same employees could be different at another time. For example, if an employee had a terrible day at work, this could have influenced the results on the motivational questions. Future research could examine the effects of PFP on motivation in a longitudinal study, which involves repeated observations from the same employees over a long period of time.
The fourth limitation could be the differences in the base salaries of the employees participating in this study. The total level of pay may have some effect on motivation. According to Lazear and Gibbs (2010), a higher base salary could lead to an increase of motivation. If an employee’s performance is low enough, he or she might get fired. The higher the base salary, the more an employee will wish to avoid this outcome but only to the extent that the threat of termination is a serious one. Future research on PFP could examine the differences in motivation when they control for an employee’s base salary.
Future research could also revisit the relationship between PFP and intrinsic
motivation. Previous research form Deci et al. (2000) claimed that rewards switch employees’ motivation from intrinsic to extrinsic. In his study, he measured this claim only with
22 for employees to work (Glassman, Glassman, Champagne & Zugelder, 2010), employees may work based only on their extrinsic motivation and may not be highly interested in the tasks at all. Future research could examine the consequences of a PFP plan for intrinsic motivation, for both employees with high and low task interest. Based on the social cognitive theory, a PFP plan could enhance self-efficacy when an employee has low interest in a task. This greater self-efficiency could lead to higher interest in a task and more time spent on an activity (Cameron, 2001), and could thereby lead to an increase in intrinsic motivation. Practical implications
This paper reinforces the importance of management’s paying attention to the
perceived procedural justice of employees. This is because procedural justice could be crucial for companies when they implement PFP plans to enhance extrinsic motivation. First, training for managers on creating work environments in which employees feel they will be rated fairly is essential (Risher, 2014). It could also help if employees are involved in the planning of policies or systems that will affect the job, have access to performance feedback during the year, and know that their options will be considered when they have problems (Risher, 2014).
Second, managers need to keep a “close eye” on employees who are prone to forming negative justice images within the company, as managers need to delay any false information. When managers have control of the main channels of contagion within the company, they can limit the negative impact of bad justice (Ohana, 2013).
23 CONCLUSION
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APPENDIXES
TABLE 1
Means, Standard Deviations and Pearson Correlation Coefficients
Variables Mean SD 1 2 3 4 5 6 7
1. Gender (M=1, F=2) 1.50 .50 -
2. Age 2.41 1.21 -.13 -
3. Organizational tenure (years) 2.92 1.31 -.13 .60** -
4. Pay for performance 17.52 20.60 .01 -.32** -.23* -
5. Procedural justice 4.96 1.06 -.92 -.99 -.29 -.29 -
6. Intrinsic motivation 5.64 .92 -.03 .16 .11 -.06 .14 -
7. Extrinsic motivation 5.04 1.07 -.05 -.02 -.00 .09 .25 .29** -
TABLE 2
Regression analysis extrinsic and intrinsic motivation
Note. N= 92. Predictors were standardized. Regression analysis was used to predict extrinsic and intrinsic motivation. *p<0,10 **p<0.05 ***<0.01
Predictors Dependent variables
Extrinsic Motivation Intrinsic motivation
Main effect PFP
Main effect PJ
FIGURE 1
Conceptual Model and Study Design
30
FIGURE 2
31
FIGURE 3
