Do you get what you pay for? Sales incentives and implications for motivation and changes in turnover intention and work effort

Abstract

This study investigated relations between pay-for-performance incentives designed to vary in instrumentality (annual pay-for-performance, quarterly pay-for-performance, and base pay level) and employee outcomes (self-reported work effort and turnover intention) in a longitudinal study spanning more than 2 years. After controlling for perceived instrumentality, merit pay increase, and the initial values of the dependent variables, the amount of base pay was positively related to work effort and negatively related to turnover intention, where both relationships were mediated by autonomous motivation. The amounts of quarterly and annual pay-for-performance were both positively related to controlled motivation, but were differently related to the dependent variables due to different relations with autonomous motivation.