The effects of monetary incentives on performance were examined in two studies. These effects were hypothesized to be through the intermediary motivational processes of self-efficacy, attractiveness ratings, goal level, and goal committment. In Study 1, 80 subjects worked solving anagrams on 8 trials under 1 of 4 monetary incentive conditions (piece rate, hourly rate, competitive bonus, and goal attainment bonus). In Study 2, 146 subjects worked solving anagrams on 4 trials under 1 of 4 monetary incentive conditions (piece rate, informed bonus, uninformed bonus, and assigned bonus). In both studies, subjects self-set goal levels both before and after the incentive manipulation. Results from both studies indicated that tying rewards to goal attainment resulted in subjects having lower goal levels and lower self-efficacy, whereas piece-rate systems resulted in higher goal levels and higher self-efficacy. In addition, goal levels and self-efficacy partially mediated the relation between inventives and performance.
Abstract