Institut for Statskundskab

Why not “just for the money”? An experimental vignette study of the cognitive price effects and crowding effects of performance-related pay

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Motivation crowding theory (MCT) argues that performance-related pay (PRP) can crowd out intrinsic motivation with detrimental consequences for the employees’ willingness to exert effort, but this mechanism is only expected, when PRP is perceived to be controlling. However, no studies have tested whether the mechanism is motivational as expected. This study finds support for these expectations using a vignette survey experimental setup of 1,152 responses (from 384 respondents). The results indicate that PRP positively affects organizational citizenship behavior (OCB), but that this effect is reduced significantly, when PRP is perceived as a control factor, because the importance of intrinsic motivation for effort is weakened. Thus, PRP can cause a cognitive shift from intrinsic to extrinsic orientation, but only if PRP is perceived as controlling. When PRP is perceived as non-controlling, the importance of intrinsic motivation can actually increase. The implications of this study are that PRP is not necessarily harmful, and that managers should pay close attention to how their employees perceive performance-based pay systems.
TidsskriftPublic Performance and Management Review
Sider (fra-til)551-580
Antal sider30
StatusUdgivet - 2017


  • Performance-related pay, motivation crowding theory, organizational citizenship behavior

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