Across three samples of workers, compensation (earnings and performance-contingent pay) and work design (complexity, variety, autonomy, feedback) were compared in relation to autonomous motivation, performance, and well-being. Work design strongly predicted autonomous motivation, which fuels adaptive and proactive performance and enhances well-being. Pay-for-performance showed negligible effects on motivation and negatively related to adaptive performance and thriving at work. Higher pay and performance-contingent compensation are often tied to more complex, autonomous roles, creating a confound in prior findings that linked pay-for-performance to improved performance. Job design primarily drives motivation and positive outcomes.
A lot of research seems to show that pay-for-performance does improve performance. But what this research has not taken into consideration is that more complex jobs (for example, demand expertise knowledge, the processing of a lot of information, and problem solving) and that offer more autonomy in decision making (for example, managerial roles) are remunerated at higher levels and tend to be remunerated based on meeting performance targets (for example, bonuses).
This implies that the research showing pay-for-performance improves performance may have missed an important confound: the design of the job. We know from past research that work design has substantial effects on work motivation. To determine if it is the pay or the motivating design of the job that determines performance and affects well-being, I collaborated with researchers in Australia and Europe to find the answer.
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