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The Risk and Reward of a Double-Edgedsword: Effects of a Merit Payprogram on Intrinsic Motivation

Temple University

Carol C. Cirka

Ursinus College

Merit pay plans are becoming increasingly popular in nonprofit organizations, despite their downside risk. One risk is the potential negative effect of the plan on employees’ intrinsic motivation. The authors investigated employee motivation in a study of a nonprofit organization before and after the implementation of a merit pay system. Results suggest that merit pay produced a decline in intrinsic motivation for employees initially highly intrinsically motivated. Justice-related factors also had an effect. Employees who indicated a preference for merit pay and believed that their performance was appraised unfairly experienced a significant decline in intrinsic motivation after the merit pay plan was implemented.

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Nonprofit and Voluntary Sector Quarterly, Vol. 29, No. 3, 400-418 (2000)
DOI: 10.1177/0899764000293003


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This Article Abstract Free Full Text (Free PDF) Free Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Deckop, J. R. Articles by Cirka, C. C. Search for Related Content Social Bookmarking                         What's this?