Show them the money? The role of pay, managerial need support, and justice in a self‐determination theory model of intrinsic work motivation

TLDR

Money’s influence on employee motivation has long been debated, yet field studies linking pay levels to motivation are scarce and researchers have called for empirical work on compensation systems. This study aimed to assess how pay amount, distributive and procedural justice perceptions, and managerial need support relate to employees’ basic psychological need satisfaction and intrinsic work motivation. Using 166 bank employees, the authors collected self‑reports of need satisfaction and intrinsic motivation and applied structural equation modeling to test a self‑determination theory model with competence and autonomy needs as mediators. Results showed pay amount and distributive justice had no effect on need satisfaction or intrinsic motivation, procedural justice had an effect, and managerial need support was the strongest predictor, confirming that monetary rewards do not enhance intrinsic motivation and highlighting the importance of managerial support for employee motivation.

Abstract

The link between money and motivation has been a debated topic for decades, especially in work organizations. However, field studies investigating the amount of pay in relation to employee motivation is lacking and there have been calls for empirical studies addressing compensation systems and motivation in the work domain. The purpose of this study was to examine outcomes associated with the amount of pay, and perceived distributive and procedural justice regarding pay in relation to those for perceived managerial need support. Participants were 166 bank employees who also reported on their basic psychological need satisfaction and intrinsic work motivation. SEM-analyses tested a self-determination theory (SDT) model, with satisfaction of the competence and autonomy needs as an intervening variable. The primary findings were that amount of pay and employees' perceived distributive justice regarding their pay were unrelated to employees' need satisfaction and intrinsic work motivation, but procedural justice regarding pay did affect these variables. However, managerial need support was the most important factor for promoting need satisfaction and intrinsic work motivation both directly, indirectly, and as a moderator in the model. Hence, the results of the present organizational field study support earlier laboratory experiments within the SDT framework showing that monetary rewards did not enhance intrinsic motivation. This seems to have profound implications for organizations concerned about motivating their employees.