First published in ATD Journal
According to self-determination theory (SDT), employees can experience different types of motivation with respect to their work. Considering the different reasons individuals invest effort into their job is important given that these individual reasons (or motivations) can lead to a host of different outcomes ranging from greater engagement, performance, and well-being through to impaired performance, psychological distress, and lower levels of engagement (Gagné & Deci, 2005; Trépanier et al.,2015). Given these important consequences, examining workplace environments with a motivational lens can help organizations craft policies and practices to encourage passion, purpose, engagement, and retention while delivering on productivity, collaboration, and bottom-line metrics.
Research in work organizations has tended to take the perspectives of either the employees (i.e.,their well-being) or the owners (i.e., their profits). However, highly effective organizations are more than merely profitable for investors; they benefit all stakeholders, including employees, investors, and consumers. These highly effective organizations promote both high-quality performance (hence profitability) and employee thriving, in terms of motivation to work and wellness. In fact, rather than being antithetical aims, high-quality employee motivation and wellness can contribute to long-term organizational health, customer satisfaction and loyalty, and financial success, as many modern consultants suggest (e.g., Doshi & McGregor 2015, Mackey & Sisodia 2014, Pink 2009).
For decades self-determination theory has addressed the links between motivation and the dual concerns of performance and wellness in organizations. It has focused on what facilitates high-quality, sustainable motivation and what brings out volitional engagement in employees and customers. SDT suggests that fostering workplace conditions where employees feel supported in their autonomy is not only an appropriate end in itself but will lead to more employee satisfaction and thriving, as well as collateral benefits for organizational effectiveness. Because SDT details the multiple factors, including managerial styles and pay contingencies, that support employees’ autonomy and competence at work, it provides a framework for allowing them to be more engaged as they and their organizations develop and thrive.
Specifically, SDT suggests that both employees’ performance and their well-being are affected by the type of motivation they have for their job activities. SDT therefore differentiates types of motivation and maintains that different types of motivation have functionally different catalyzers, qualities, and consequences.
Autonomy vs. Control
Autonomous motivation is characterized by people being engaged in an activity with a full sense of willingness, volition, and choice. Often, autonomously regulated activities are intrinsically motivated. Perhaps more important to the workplace, however, extrinsically motivated activities can, under the right circumstances, also be autonomously motivated—that is, engaged with authenticity and vitality. When individuals: (1) understand the worth and purpose of their jobs; (2) feel ownership and autonomy in carrying them out; and (3) receive clear feedback and supports, they are likely to become more autonomously motivated and reliably perform better, learn better, and be better adjusted.
In contrast, when motivation is controlled, either through contingent rewards or power dynamics, the extrinsic focus that results can: (1) narrow the range of employees’ efforts; (2) produce short-term gains on targeted outcomes; and (3) have negative spillover effects on subsequent performance and work engagement.
Intrinsic Motivation. This is a specific type of autonomous motivation. It refers to activities for which the motivation lies in the behavior itself. When intrinsically motivated, it is the spontaneous experiences of interest and enjoyment entailed in the activity that supply the “rewards.” Intrinsic motivation is a ubiquitous human phenomenon, but it is exemplified in the play of children, who enthusiastically engage in activities without external rewards or prompts. However, intrinsic motivation is also evident in the activities of adults, such as sports and recreation, and it is surprisingly important even in in the workplace. Employees can be intrinsically motivated for at least parts of their jobs, if not for all aspects of them, and when intrinsically motivated the individuals tend to display high-quality performance and wellness.
Extrinsic Motivation. Extrinsically motivated behavior involves doing an activity to attain a separable consequence, whether tangible or otherwise. That is, extrinsic motivation encompasses all instrumental behaviors. Rather than viewing all extrinsic motivation as “bad,” which some authors (e.g., Cohen “Punished by Rewards”) have claimed, SDT maintains that extrinsic rewards can have different functional significances that lead to enhancements, diminishments, or no effects on intrinsic motivation (e.g., Deci 1972). Importantly, SDT has long differentiated extrinsic motivation into various forms, each of which is recognizable in the workplace, and which range from being less to more autonomous (Ryan & Connell 1989).
Basic Psychological Needs and Their Supports
Fundamental to SDT is the idea that the impact of varied environmental factors (e.g., job design, pay contingencies, managerial styles) on workers’ motivations and experiences is largely mediated by a small set of basic psychological needs. They are the needs for competence or effectance, relatedness or belongingness, and autonomy or self-determination, which are essential for psychological health and well-being and facilitate effective functioning in social settings (Ryan 1995).
Self-Determination Theory Model of Workplace Motivation
SDT’s mini-theories have broad implications for organizations (Gagne & Deci 2005), and numerous research reports on SDT constructs within work organizations have appeared in the recent empirical literature.
The SDT Workplace Motivation model begins with two primary sets of independent variables:
1. social context variables
2. individual difference variables
The predominant social context variables are the organizational supports versus thwarts of employees’ basic psychological needs for competence, relatedness, and autonomy, and they are viewed as being strongly influenced by managerial styles. Autonomy support may be the most impactful needs supportive process within an organization - In fact, when there is organizational and managerial support for autonomy, supports for and satisfaction of all three of the employees’ basic psychological needs at the general level are often quite highly correlated, first because authorities who support autonomy generally are attuned to and supportive of the other needs, and second because when employees have a sense of autonomy they themselves find ways to get the other needs satisfied. Thus, when employees experience support for autonomy they typically also feel more connected to the organization and feel more effective.
Causality Orientations Theory (CET), a component of self-determination theory, describes an individual’s pattern of motivation and behavior. General causality orientations are relatively enduring, trait-like characteristics reflective of an individual’s belief about their ability to promote or cause change. These beliefs regarding locus of causality correspond with an individual’s motivational pattern. Underlying these patterns are three motivational orientations that employees can generally experience:
1. an autonomy orientation - that is proactive and interested
2. a controlled orientation - that is focused on external contingencies to guide behaviors
3. an impersonal orientation - that lacks intentionality and is concerned with avoiding assessments and failures leading to a lack of motivation.
Each of these can be differentially salient to employees, can be modified through motivation-based interventions.
In addition to general causality orientations, life goals or aspirations are also used to predict outcomes in various domains (Kasser & Ryan 1996). SDT most often considers seven aspirations that people may be pursuing as important over their lifetimes and these aspirations are categorized as either intrinsic to the person or extrinsic to them. The seven aspirations are:
- financial wealth
- recognition or fame
- attractive image
- personal development
- meaningful relationships
- community contributions
- physical fitness or health
Research has shown that when people place relatively strong importance on the extrinsic aspirations, and even when they attain the extrinsic aspirations they desire, they tend to show signs of psychological ill-being, such as depression, anxiety, and low self-esteem, whereas when they pursue and attain intrinsic aspirations, they tend to show indications of psychological well-being, such as high self-actualization and self-esteem (Kasser & Ryan 1996).
In workplace contexts, SDT workplace research has shown that:
- employees who held stronger extrinsic goals relative to intrinsic goals were less satisfied with their jobs and their lives.
- additional displeasing outcomes of emotional exhaustion, higher turnover intentions, and more work-family conflict among those employees who were relatively higher on extrinsic than intrinsic work values (Vansteenkiste et al. 2007)
- employees with more intrinsic work goals were more flexible in their work than those with extrinsic goals
- found that individuals with relatively high intrinsic work aspirations who engaged in learning opportunities were less emotionally exhausted than those with relatively higher extrinsic aspirations (Van den Broeck et al. 2011).
It is clear from these various studies that when employees hold intrinsic work values and goals more strongly they will be more effective employees and when the workgroup supports the intrinsic values and goals, there will be further advantages.
In terms of the aspiration for money (Landry et al. 2016), found that the outcomes associated with aspiring to accumulate money depended on one’s motive for doing so. More specifically, if people’s motives for pursuing wealth were more integrated (i.e., the desire for money was for more intrinsic goals such as personal development, relationships, community contributions) and thus were more need-satisfying and less need-frustrating, the aspiration was positively associated with well-being and negatively with ill-being.
However, if the motives were less integrated and thus were less need-satisfying and more need-frustrating (i.e., consumerism, consumption, status), the aspiration was positively associated with ill-being and negatively associated with well-being.
Sheldon & Krieger (2014) identified large samples of private-firm lawyers who had high paying jobs within money-focused firms (e.g., doing securities-related work) and public-service lawyers who had jobs focused on serving the public (e.g., doing sustainability-related work for nonprofit organizations). As one would expect, those lawyers in the money-focused jobs had greater extrinsic aspirations relative to the public service group. They also had much larger annual incomes, suggesting they were getting what they valued. Nonetheless this money-focused group reported greater negative affect, lower well-being, and more alcohol consumption compared to a group of public service attorneys. Here, evidence shows that even a successful focus on the attainment of extrinsic goals does not reliably yield more happiness or well-being.
According to the SDT Work Motivation model - there have tended to be two major types of dependent variables:
1. performance variables (e.g., quantity or quality of performance or profitability) and
2. well-being/ill-being variables (e.g., job satisfaction, vitality, or somatic symptoms).
But other variables are increasingly being studied such as well In sum, SDT research on work motivation have shown that autonomous motivation predicted less burnout, work exhaustion, and turnover, as well as greater work satisfaction, work commitment, and performance, whereas controlled motivation has tended to show opposite results.
Implications for Practice
if research confirms what the theory predicts - what then, are the antecedents to creating the types of motivational experiences that lead to high quality performance in organizations?
In many of the studies on situational factors in workplaces that might affect motivation variables, the focus has been on the atmosphere of work groups assessed by employees’ perceptions of their managers being autonomy supportive or need supportive. These variables comprise such managerial behaviors as:
- acknowledging the employees’ perspectives, (autonomy / relatedness support)
- offering choices, (autonomy support)
- giving a rationale when requesting that an employee do a particular task (autonomy support)
- encouraging initiation, (autonomy support)
- making assignments optimally challenging, (competence support)
- providing meaningful feedback, (competence support)
Primary findings of SDT interventions indicate that autonomy support from managers in a variety of work settings enhanced both satisfaction of the basic psychological needs and autonomous motivation, and in turn yielded a range of positive work outcomes, including greater engagement; enhanced work performance; higher psychological well-being; and lesser amounts of exhaustion, ill-being, and turnover.
Several intervention reports have shown that It is possible to train managers to be more autonomy supportive and that when successfully done, one can expect the training not only to affect the managers’ behaviors but also to have a positive impact on the motivation, behavior, and affective experiences of their employees.
Characteristics of Jobs
Although SDT has not devoted a great deal of attention to specific characteristics of jobs or tasks, the concept of managerial need support includes several concepts that are often addressed in the job design or job characteristics literature as aspects of employees’ jobs. Early work by Hackman & Oldham (1980) emphasized autonomy and task identity as important aspects of jobs that promote high performance, whereas SDT views them as supports for the autonomy need provided by managers’ orientations and behaviors. Similarly, SDT views feedback as a support for the competence need and task significance as a support for both the autonomy and relatedness needs.
In line with this view, SDT studies have shown that facilitative job characteristics promoted basic need satisfaction, autonomous motivation, and positive work outcomes, including job satisfaction and performance (e.g., Gagne et al. 1997, Millette & Gagne 2008).
Job Demands – Resources Model
Job demands are defined as those aspects of the work context that tax employees’ personal capacities and are, therefore, associated with certain psychological and/or physiological costs (Bakker, Demerouti, Taris, Schaufeli, & Schreurs, 2003). Job demands are not necessarily negative as long as they do not exceed employees’ adaptive capacities. If they do, however, they turn into stressors and elicit burnout (Schaufeli & Bakker, 2004). The category of job resources is defined as those physical, psychological, social, or organizational aspects of the work context that
(1) can reduce the health-impairing impact of job demands, (2) are functional in achieving work goals, and (3) stimulate personal growth, development, and learning (Schaufeli & Bakker, 2004). Job resources are considered to enhance employees’ well-being, that is, they are assumed to stimulate employees’ work engagement and prevent burnout.
Depending on the job context under study, the category of job demands can contain job characteristics as diverse as:
- task interruptions,
- work-home interference,
- organizational changes,
- emotional dissonance / emotional demands, and
- physical demands,
Like job demands, the category of job resources contains various job characteristics such as:
- opportunities for skill utilization,
- supervisor support,
- financial rewards,
- task autonomy
- career opportunities
- positive feedback
The Work Design Questionnaire (WDQ) by Morgeson, F. P., & Humphrey, S. E. (2006), covers characteristics and supports in terms of satisfaction or thwarting of job characteristics that all align to one or more SDT needs:
- Autonomy: Work scheduling, Decision-Making, Work Methods
- Task variety
- Task Significance
- Task identity
- Feedback from Job
- Job Complexity
- Information Processing
- Problem Solving
- Skill variety
- Social Support
- Interaction Outside Organization
- Feedback from others
Transformational vs. Transactional Leadership in the Workplace
Leadership scholars over the past 25 years have studied and advocated for a style of leadership that is focused on leading through inspiring, encouraging, stimulating, and empowering others. Referred to as transformational leadership, these leaders approach work with enthusiasm and an open mind. They set a visible example of being engaged with work, and collaborative in idea generation and problem solving.
Transformational leaders, acknowledge their employees’ perspectives in their discussions, offer choice about how to enact ideas, and refrain from pressuring behaviors and language. In turn, these leaders are more successful in facilitating the employees’ basic psychological needs and autonomous motivation for work.
In contrast to transformational leadership is transactional leadership, which is a more conventional approach that includes using contingent rewards, emphasizing norms, and monitoring employees’ behaviors.
Recent research has shown that perceived transformational leadership does promote employees’ basic need satisfaction (e.g., Hetland et al. 2011) and autonomous work motivation (Conchie 2013, Graves et al. 2013, Wang & Gagn´e 2013). Furthermore, research has shown that the relations of transformational leadership to work engagement, commitment, and job satisfaction is mediated by satisfaction of basic needs (Kovjanicet al. 2012). Moreover, Bono & Judge (2003) found that when leaders were more transformational their employees were more committed to the organization, tended to adopt more autonomous work goals, and displayed higher job satisfaction. Transactional leadership, however, had negative relations to basic need satisfaction (e.g., Hetland et al. 2011) thus prompting less effective motivational processes and outcomes. Other research has shown that the transformational leaders themselves require basic need satisfaction, such that those leaders who are getting their own needs satisfied are more likely to be transformational in their approach (Trepanier et al. 2012).
The Role of Pay in the Workplace
There is little doubt that most people would not continue to do their jobs if their pay were to stop. That is, relatively few people find their jobs interesting and important enough that they would continue on if they were unpaid. Accordingly, it is essential that rewards or incentives be considered when thinking about motivation in the workplace. Perhaps the most controversial sets of findings within the umbrella of SDT is directly related to pay—namely, the findings concerning reward effects on intrinsic motivation and related concepts. A few psychologists have argued that the laboratory research examining reward effects on intrinsic motivation is not valid (Eisenberger & Cameron 1996), an argument that has been shown to be incorrect by the definitive meta-analysis by Deci et al. (1999) of 128 reward-effects experiments. A few other psychologists have argued that the rewards research is not relevant to the workplace (Gerhart & Fang 2015), which is a conclusion that misinterprets aspects of SDT and misses some of the main points of the reward research itself. So we now turn to a discussion of that reward-effects research before moving on to a consideration of pay studies in work organizations.
The first studies of reward effects on intrinsic motivation for an activity revealed that tangible rewards undermined intrinsic motivation for the activity, whereas positive feedback (aka verbal rewards) enhanced intrinsic motivation (Deci 1971). Furthermore, if the tangible rewards were not contingent on actually doing the task they were not undermining of intrinsic motivation (Deci 1972). SDT interprets this set of findings in terms of whether the functional significance of the rewards was informational or controlling (Deci & Ryan 1980). When the interpretation of rewards is informational, they convey positive competence information thus satisfying the recipient’s basic psychological need for competence and enhancing intrinsic motivation. Positive feedback on average has this functional significance.
In contrast, when the interpretation of rewards is controlling, people feel pressured to think, feel, or behave in particular ways, so the rewards frustrate people’s basic need for autonomy, thus undermining intrinsic motivation. Often tangible rewards have this functional significance (Deci et al. 1999), although when they are not contingent on doing the task, they are neither informational nor controlling so they tend not to affect intrinsic motivation.
Contingent rewards have been differentiated into three types:
1. engagement-contingent, which means receiving rewards simply for working on the task;
2. completion-contingent, which means receiving rewards for each task trial completed; and
3. performance-contingent, which means receiving rewards for meeting some standard of excellence on the task.
All three types of tangible rewards have been shown on average to significantly decrease intrinsic motivation, although the performance-contingent rewards have had a somewhat smaller negative effect than the other two contingencies. The performance-contingent rewards were somewhat controlling because participants had to do very well to get the rewards, and they were somewhat informational because getting the rewards confirmed the recipients’ competence. The meta-analysis showed that, on average, the controlling aspect was stronger, so that, although the informational functional significance offset some of the controlling functional significance of the rewards, the controlling aspect was still strong enough to significantly decrease intrinsic motivation.
An additional study made clear that rewards are most likely to undermine intrinsic motivation when the rewards were not only contingent—whether engagement-, completion-, or performance-contingent—but were also salient (Ross 1975). As we have said, even though in general people “like” getting rewards, on average the rewards yield these negative effects on intrinsic motivation because, when rewards are made contingent, it becomes salient that the rewarder is controlling the rewardees’ behavior. In a company setting, it is typically the supervisor who is experienced by subordinates as doing the controlling.
Using controlling rewards in a workplace may not only diminish employees’ autonomy; it can also lead them to focus on aspects of their jobs to which the rewards are most clearly linked and to give less attention to aspects of the jobs that are not incentivized (e.g., knowledge sharing, team contributions, organizational citizenship behaviors) but that are nonetheless valuable to the organizations. In contexts where some behaviors are experienced as being contingently rewarded, others are thereby implicitly experienced as not being important because there is no reward focused on them, thus leading to employees disengaging from the aspects of work they see as devalued.
That such collateral damage occurs was documented by Gubler et al. (2016) in a recent study of an intervention that used monetary awards to improve attendance in industrial laundry plants (Disney Land). The researchers found that, although the awards had a positive effect on the attendance of employees who had had a poor record, it also prompted strategic gaming of the system. Furthermore, the award-changed behaviors that were observed in eligible employees were not maintained over time. Also and notably, the awards undermined the internal motivation of employees who, prior to the awards program, had had excellent attendance, leading them to exhibit poorer attendance than they had previously shown. Finally, the award effect spilled over to other tasks in the plants, with employees reporting decreased motivation for tasks that had not been awarded. Seen here is evidence that incentives can affect employees’ autonomy and responsibility, sometimes in unintended negative ways.
Reward contingencies and types of pay
Pay-for-performance (PFP), which is often advocated for work organizations, would be closely related to both the completion-contingent rewards (e.g., sales commissions and piece-rate payments) and performance-contingent rewards (e.g., higher pay and larger bonuses for meeting performance standards), whereas hourly pay would most closely compare to engagement-contingent rewards, and salaries would relate to non-contingent rewards, although higher-level executives are likely to have some PFP as well as their salaries.
The vigorous controversy surrounding rewards in the workplace is focused primarily on PFP, which, many researchers have argued, will motivate employees to perform better (e.g., Komaki et al. 1978). The following will examine the relations of intrinsic motivation and extrinsic incentives to performance.
Considering the relations of motivations to performance
From an SDT perspective, there are several important factors that must be considered to make a meaningful evaluation of approaches to compensation (e.g., PFP).
First, it is important to differentiate types of performance that one might use as the dependent variables in evaluating the effects on performance of incentives, pay, and intrinsic and extrinsic motivation. Nearly 40 years ago, McGraw (1978) noted the difference between algorithmic and heuristic tasks and reviewed evidence showing that rewards tended to enhance performance on algorithmic tasks (following a prescribed set of instructions) and diminish performance on heuristic tasks (experimenting to find the best process to devise a novel solution (see, also, Deci & Ryan 1985a).
More recently, a meta-analytic study by Cerasoli et al. (2014) emphasized the importance of distinguishing between quantity and quality of performance, whereas Weibel et al. (2010) distinguished between performance on simple tasks and complex tasks. Algorithmic tasks are relatively simple whereas heuristic ones are more complex, and the focus of algorithmic tasks tends to be on quantity whereas the focus of heuristic tasks is often on quality. Thus, these three distinctions are reasonably well aligned. In short, performance is a broad concept, and it is important to understand that there are different types of tasks and, accordingly, different types of performance. SDT utilizes the quantity-quality distinction to encompass the three distinctions just presented.
Second, just as it is imperative to consider reward or incentive contingencies when examining reward effects on intrinsic motivation, it is similarly so when considering reward effects on performance. As with Cerasoli et al. (2014), highlights the distinction of directly and indirectly performance-salient incentives because completion-contingent and performance-contingent rewards are both directly performance salient.
Third, considering the effects of pay or rewards on psychological health and well-being, in addition to their effects on performance, is essential for any meaningful evaluation of compensation approaches.
Performance: An SDT meta-analysis
Cerasoli et al. (2014) performed a meta-analysis with a total of 183 effects that examined relations from both intrinsic motivation and extrinsic incentives to performance and examined the important moderators of types of performance (i.e., quantity and quality) and types of incentive contingencies (i.e., directly and indirectly performance salient). Some of the studies were in the workplace, some in physical activity settings, some in schools, and some in psychology laboratories.
The first important finding in the meta-analysis by Cerasoli et al. (2014) showed that intrinsic motivation had a moderate to strong relation to performance across all studies and all types of performance, whether or not incentives were also being used. Accordingly, this indicates that intrinsic motivation is extremely important for the workplace. Furthermore, in line with the undermining effect of rewards on intrinsic motivation, Cerasoli et al. found that intrinsic motivation had a weaker effect on performance when incentives were directly salient, and a stronger relation to performance when the incentives were not directly salient.
In more nuanced analyses, Cerasoli et al. (2014) found that intrinsic motivation was a stronger predictor of performance quality, whereas extrinsic incentives were a stronger predictor of performance quantity. In a similar vein, Weibel et al. (2010) in their meta-analysis found that extrinsic incentives led to better performance on simple tasks but to poorer performance on more complex tasks. In short, PFP appears to be effective for motivating performance as quantity of simple, algorithmic tasks, but not performance as quality of complex heuristic tasks. Furthermore, PFP seems to interfere with the relation of intrinsic motivation to high-quality performance.
Base salaries, which are more related to non-contingent rewards, were shown in the Deci et al. (1999) meta-analysis and the Olafsen et al. (2015) field study to not affect autonomous motivation, although they were found in the Kuvaas et al. (2016) study to correlate with autonomous motivation, suggesting that further research is needed in workplaces to clarify the relation of salaries (i.e., non-contingent pay) or hourly compensation (i.e., engagement-contingent pay) to autonomous motivation. In general, however, it is likely that higher base salaries (i.e., non-contingent pay) have a positive influence, as they may well convey valuing by the organization.
In other words, autonomous motivation was a strong negative predictor of employees’ turnover intentions, whereas controlled motivation was a positive predictor of those intentions.
To summarize, PFP tends to result in controlled, rather than autonomous, motivation, leading employees to exert less work effort and have greater desire to leave their jobs.
Another study, also in the realm of sales, showed even more negative outcomes resulting from a PFP program (Harrison et al. 1996). Done in the telecommunications industry, employees worked entirely on commissions after a two-month orientation to their jobs, so their pay was wholly, and in a very direct way, dependent on their performance. Results of the study showed that three quarters of the salespeople had left the company within a year, which obviously would have been very costly for the company.
These studies, when combined with the results of laboratory experiments, other field studies, and meta-analyses, indicate that PFP approaches to compensation, in spite of being strongly endorsed by writers such as Gerhart & Fang (2015), promote quantity of performance largely for simple, algorithmic tasks, but do not enhance high-quality performance. Furthermore, although these studies did not examine well-being outcomes, they did examine intrinsic and autonomous motivation and basic psychological need satisfaction, which are strongly related to well-being, and one of the studies examined turnover, which is strongly related to ill-being. In sum, for high-quality performance and well-being, providing equitable pay that is not directly contingent on performance along with an autonomy-supportive context, appears to be an optimal route.
Critiques of SDT
There have been various critiques of SDT in the organization literature through the years, largely with respect to issues surrounding rewards or pay. Recently, Gerhart & Fang (2015) provided an extensive review and critique of CET. Throughout, they argued strongly for a PFP approach to compensation in the workplace, yet Cerasoli et al. (2014) and Jenkins et al. (1998) showed that PFP promoted only quantity of performance, not quality. The SDT view is that, although quantity of performance is important in some situations, high-quality outcomes are, in general, the more important.
In terms of rewards and pay, SDT research has consistently shown that whether rewards have a positive effect, no effect, or a negative effect on intrinsic motivation and internalization depends on their functional significance, which is influenced by the type of rewards (positive feedback versus tangible rewards), the type of reward contingency, which we have discussed in detail, and the interpersonal context within which they are administered (autonomy-supportive versus controlling).
Concerning the importance of autonomy-supportive contexts, Ryan et al. (1983) showed that when performance-contingent monetary rewards were given in an autonomy-supportive context, participants showed more intrinsic motivation than those in a control group in which the rewards were engagement contingent without positive feedback, thus suggesting that the autonomy-supportive context highlighted the informational aspect of performance-contingent rewards.
One form of PFP that is particularly problematic is outcome-contingent rewards. Outcome contingent rewards are those in which contingent pay is given for attaining specific outcomes. Examples include bonuses to top managers when stock prices increase; salary increases for teachers based on improved student test scores; or rewards for out producing others within the company on some sales or service metric. We have argued that outcome-focused rewards are the most likely among all reward types to yield collateral damage—that is, to lead to gaming the system (Ryan & Deci 2017). As Ryan & Brown (2005) discussed, unlike traditional operant techniques that reinforce specific behaviors, outcome-focused rewards can reinforce any behaviors that lead to the outcome, whether or not it is best practice. Such PFP structures can thus lead to short-term routes to outcome attainment at the cost of more strategic ones. For example, high-stakes tests in schools foster “teaching to the tests,” and in organizations quarterly bonuses lead to short-term “profit taking,” often irrespective of longer-term goals. Finally, outcome-focused PFP often requires persistent monitoring and evaluating, which can be demoralizing.
Every policy and practice implemented within a work organization is likely to either support or thwart the basic psychological needs. Anyone interested in improving the work context within an organization and thus the performance and wellness of its employees could evaluate any policy or practice being considered in terms of whether it is likely to (a) allow the employees to gain competencies and/or feel confident, (b) experience the freedom to experiment and initiate their own behaviors and not feel pressured and coerced to behave as directed, and (c) feel respect and belonging in relation to both supervisors and peers. Policies or practices that are likely to support the employees in each of these three ways are likely to facilitate autonomous motivation, well-being, and high quality performance. Those that thwart any of these employee experiences are likely to promote controlled motivation or amotivation, along with ill-being and, at best, quantity but not quality of performance.
For example, work settings, in which supervisors acknowledge employees’ perspectives, encourage self-initiation, offer choices for individuals and groups, provide meaningful feedback, assign tasks that are optimally challenging, and give a rationale when requesting a behavior are likely to lead to both high-quality performance and wellness, as mediated by basic psychological need satisfaction and autonomous motivation. At the level of immediate supervisors, the evidence is abundant that when the supervisors are more autonomy supportive there are a range of positive consequences for the employees, including trust of managers higher in the organization.
SDT as a theory of work motivation has been unique in that, through differentiating motivation into autonomous and controlled types, it has been able to show that autonomous motivation but not controlled motivation of employees promotes both high-quality performance and employee wellness. The key to that evolves from the proposition that all human beings have three fundamental psychological needs—for competence, autonomy, and relatedness—which when satisfied promote autonomous motivation, wellness, and effective performance. As such, the theory has been able to significantly bolster the traditional goal of organizational psychologists—namely, facilitate profitability—and at the same time support the well-being of the employees.
Thus, understanding the functional significance of job characteristics, types of justice, managerial styles, types of leadership and specific managerial tools such as compensation, deadlines, monitoring, goal setting, is essential within today’s organizations to facilitate people motivating themselves autonomously and in turn working well and feeling good.
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