Organizational Control and Work Effort – Another Look at the Interplay of Rewards and Motivation

Abstract

Providing rewards is a central element of organizational control systems. However, the literature is hardly helpful from a practitioner's perspective: it typically focuses on monetary rewards at the expense of non-monetary, affiliative rewards, and yet researchers disagree over the usefulness of the prior ones. Some scholars claim that monetary rewards merely replace task-related (‘intrinsic’) motivation by reward-induced external pressure (‘extrinsic’ motivation). Empirical findings are mixed, partially given the different conceptualizations of intrinsic motivation. We shed more light on the impact of both monetary and non-monetary, affiliative rewards on the willingness to exert work effort and a potential detrimental interaction with different forms of intrinsic motivation. Our experimental results suggest that monetary and affiliative rewards have different effects: affiliative rewards clearly have beneficial effects, whereas the picture for monetary rewards is more nuanced than typically assumed in literature.

Acknowledgements

The paper benefitted from helpful comments by two anonymous reviewers, Salvador Carmona (Editor), Nicolai J. Foss, Bo Bernhard Nielsen, Larissa Rabbiosi, and the participants at the 2009 AS-GAABR/IAAER Conference, the Sixth ACMAR Conference 2009, and the 2009 Academy of Management Annual Meeting. We are also indebted to the participants in the experiment. Parts of the work were carried out during the second authors' previous affiliation with Copenhagen Business School's Department for Strategic Management & Globalization.