“It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance?
The use of performance-based pay is increasing rapidly, but empirical evidence on how and why it relates to job performance, as well as its relative strategical importance, remains unclear. The present study examined the relative importance of performance-based pay variables and support of psycholog...
| Main Authors: | , , , , |
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| Format: | Journal Article |
| Language: | English |
| Published: |
Stockholm University Press
2020
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| Online Access: | http://hdl.handle.net/20.500.11937/82440 |
| _version_ | 1848764510897176576 |
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| author | Nordgren Selar, Alexander Falkenberg, Helena Hellgren, Johnny Gagné, Marylène Sverke, Magnus |
| author_facet | Nordgren Selar, Alexander Falkenberg, Helena Hellgren, Johnny Gagné, Marylène Sverke, Magnus |
| author_sort | Nordgren Selar, Alexander |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The use of performance-based pay is increasing rapidly, but empirical evidence on how and why it relates to job performance, as well as its relative strategical importance, remains unclear. The present study examined the relative importance of performance-based pay variables and support of psychological needs variables for task and contextual performance in a sample of 582 white-collar employees in Sweden. Multiple regression results, based on survey and register data, showed that the instrumentality of the pay system related to lower levels of task and contextual performance. However, supplementary relative weight analysis (RWA) showed that, in relative terms, instrumentality of the pay system was of minor importance for performance. Performance-based pay-raise amount was positively related to contextual performance but not predictive of task performance. Procedural pay-setting justice was unrelated to both outcomes. Among the support of psychological needs variables, feedback and job autonomy had positive associations with both outcomes while social support from colleagues was not predictive of performance. Considering the explained variance (16–17%), the performance-based pay variables combined accounted for up to a third (12.6–29.2%) while support of psychological needs variables accounted for more than half of the explained variance (56.1–68.1%) in task and contextual performance. The results indicate that organizations would benefit from putting support of psychological needs to the forefront of their motivational strategies as a complement to administrating complex compensation systems. |
| first_indexed | 2025-11-14T11:20:31Z |
| format | Journal Article |
| id | curtin-20.500.11937-82440 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T11:20:31Z |
| publishDate | 2020 |
| publisher | Stockholm University Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-824402023-06-13T02:58:39Z “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? Nordgren Selar, Alexander Falkenberg, Helena Hellgren, Johnny Gagné, Marylène Sverke, Magnus The use of performance-based pay is increasing rapidly, but empirical evidence on how and why it relates to job performance, as well as its relative strategical importance, remains unclear. The present study examined the relative importance of performance-based pay variables and support of psychological needs variables for task and contextual performance in a sample of 582 white-collar employees in Sweden. Multiple regression results, based on survey and register data, showed that the instrumentality of the pay system related to lower levels of task and contextual performance. However, supplementary relative weight analysis (RWA) showed that, in relative terms, instrumentality of the pay system was of minor importance for performance. Performance-based pay-raise amount was positively related to contextual performance but not predictive of task performance. Procedural pay-setting justice was unrelated to both outcomes. Among the support of psychological needs variables, feedback and job autonomy had positive associations with both outcomes while social support from colleagues was not predictive of performance. Considering the explained variance (16–17%), the performance-based pay variables combined accounted for up to a third (12.6–29.2%) while support of psychological needs variables accounted for more than half of the explained variance (56.1–68.1%) in task and contextual performance. The results indicate that organizations would benefit from putting support of psychological needs to the forefront of their motivational strategies as a complement to administrating complex compensation systems. 2020 Journal Article http://hdl.handle.net/20.500.11937/82440 10.16993/sjwop.107 English http://creativecommons.org/licenses/by/4.0/ Stockholm University Press fulltext |
| spellingShingle | Nordgren Selar, Alexander Falkenberg, Helena Hellgren, Johnny Gagné, Marylène Sverke, Magnus “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title | “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title_full | “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title_fullStr | “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title_full_unstemmed | “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title_short | “It’s [Not] All ‘Bout the Money”: How do Performance-based Pay and Support of Psychological Needs Variables Relate to Job Performance? |
| title_sort | “it’s [not] all ‘bout the money”: how do performance-based pay and support of psychological needs variables relate to job performance? |
| url | http://hdl.handle.net/20.500.11937/82440 |