The Effects of Performance Measurement and Compensation on Motivation: An Empirical Study

Marco van Herpen, Mirjam van Praag, Kees Cools
2003 Social Science Research Network  
The design and implementation of a performance measurement and compensation system can strongly affect the motivation of employees. Building on economic and psychological theory this study develops a conceptual model that is used to empirically test this effect. Our survey results demonstrate a positive relationship between the perceived characteristics of the compensation system and extrinsic motivation. Intrinsic motivation is not affected by design monetary compensation, but is affected by
more » ... omotion opportunities. The compensation system also significantly affects work satisfaction and turnover intent. This paper attempts to take a preliminary step towards showing the relationship between a compensation system and performance.
doi:10.2139/ssrn.417355 fatcat:tlce3cn7dfh57bnbh4z4womgpu