Int. Journal of Business Science and Applied Management, Volume 17, Issue 1, 2022
Better Leveraging Monetary Rewards in the 21
Workplace Using Self-determination Theory
Anaïs Thibault Landry
Department of Management, John Molson School of Business, Concordia University
1450 Guy St, Montreal, Quebec H3H 0A1, Canada
Tel: 514-466-2005
E-mail: anais.thibaultlandry@gmail.com
Konstantinos Papachristopoulos
Department of Theory, Athens School of Fine Arts
Evelpidon 13, 11362, Athens, Greece
Tel: 30-69443-52029, 30-21088-11686
E-mail: papachristopouloskostas@gmail.com
Yu-Shan Hsu
Department of Management, John Molson School of Business, Concordia University
1450 Guy St, Montreal, Quebec H3H 0A1, Canada
Tel: 514-848-2424 ext.2010
E-mail: yu-shan.hsu@concordia.ca
Yu-Ping Chen
Department of Management, John Molson School of Business, Concordia University
1450 Guy St, Montreal, Quebec H3H 0A1, Canada
Tel: 514-848-2424 ext.2910
E-mail: yu-ping.chen@concordia.ca
The purpose of this article is to understand how to better leverage monetary rewards at work using
Self-Determination Theory (SDT). According to SDT research, employees can ascribe different
functional meaning to monetary rewards. When rewards take on an informative meaning, they
positively contribute to employees’ basic psychological needs, leading to greater autonomous
motivation, and better work outcomes, while when presented in a coercive way they negatively
contribute to employees’ basic psychological needs because they lead to greater controlled motivation.
We propose that employers need to better understand employees’ attributes, consider alternative forms
of rewards and provide communication training, in order to better satisfy employees’ psychological
needs and avoid the negative outcomes of controlling monetary rewards. Our research contributes to
the understanding of both employers’ and employees’ experience of workplace cash rewards and
explores theoretical avenues on how rewards in modern work contexts need to be functionally
contextualized by personal, organizational and cultural factors (e.g., the functional meaning of rewards,
basic needs satisfaction).
Keywords: self-determination theory, meaning of monetary rewards, psychological needs, motivation,
work outcomes
Acknowledgement: This publication has received funding from the European Union’s Horizon 2020
research and innovation programme under the Marie Sklodowska-Curie grant agreement No
101028279 (Outgoing Phase in UQAM)
Int. Journal of Business Science and Applied Management / Business-and-Management.org
Compensation represents the single largest organizational cost in many industries. To illustrate,
U.S. companies allocate more than one fifth of their budgets to wages and salaries, spending between
$38 and $77 billion on cash rewards and incentives each year (Cancialosi, 2014). In this light,
companies spend a major portion of their operating budget on compensation (salary, benefits, bonuses
and other rewards, etc.) as they seek to attract, motivate, and retain top performing employees (Patnaik
& Suar, 2019). However, human resource managers and reward professionals are often puzzled by the
failure of reward strategies to increase productivity, boost job satisfaction, and enhance company
performance (Kornelakis, 2018). Moreover, while the focus in the past seems to have been solely on
the extrinsic function of money and financial payments, including monetary rewards, it now seems
necessary to adjust perspectives as the new trends on the job markets have gradually turned to an
intrinsic focus on incentives and motivation (Chen & Hsieh, 2006).
While earning a salary is fundamentally the basic premise for employment and monetary rewards
are undeniably an important aspect of any employment relationship, such extrinsic monetary rewards
have been critiqued for their ‘hidden costs’, such as a decline in the quality of the services provided
(Qian & He, 2018), the reduced volitional behavior of intrinsically-motivated workers (Gerhart &
Fang, 2015; Georgellis et al., 2011), and lower satisfaction with the work itself - especially when such
rewards are provided ‘ex-ante’ for attaining specific standards of performance (Balkin et al, 2015).
These findings support the notion of a motivational shift, in which a person’s enjoyment of and interest
in doing work they like (otherwise called intrinsic motivation) is replaced with a less powerful
motivation to do the work in pursuit of an external reward (Frey & Jegen, 2001; Krug & Braver, 2014).
Many studies also suggest that monetary rewards that are contingent on performance enhance
one’s satisfaction with having a job that requires positive customer service (Grandey et al., 2013) and
other studies provide evidence regarding the strong positive effects of extrinsic rewards, including
instances of increased performance quality in complex tasks (e.g. Garbers & Konradt, 2014). On this
point, several meta-analyses provide mixed results, suggesting more nuanced effects of monetary
rewards on employees (e.g., Cerasoli, Nicklin, & Ford, 2014; Jenkins et al., 1998).
Thus, it is of relevance to use motivational theories to understand the meaning employees give to
their monetary rewards and how this determines their behavior (Zhang, Hsee, & Yu, 2018). Taking all
these research directions into account, the purpose of this article is twofold: First, we discuss the
motivational power of monetary rewards using the lens of Self-Determination Theory (SDT; Ryan &
Deci, 2000a), a motivational theory positing that if individuals' innate psychological needs for
competence, relatedness, and autonomy are satisfied, optimal functioning and growth are likely to be
achieved. Second, we formulate four suggestions to better align and leverage informative monetary
rewards in the current reality of our 21st century workplace.
Our study contributes to the literature and the application of findings in the following ways. First,
we contribute to the study of rewards in the workplace by providing concrete recommendations that
have taken into account all relevant research studies. SDT research has consistently shown that whether
rewards have a positive effect, no effect, or a negative effect on intrinsic motivation depends on their
functional significance, which is influenced by the type of reward contingency, the type of rewards
(positive feedback versus tangible rewards) and the interpersonal context within which they are
administered (autonomy-supportive versus controlling) (Gerhart & Fang, 2015, Pink, 2009, Gagné &
Forest, 2008; Moller & Deci, 2014; Olafsen et al., 2015; Deci, Olafsen, & Ryan, 2017; Thibault Landry
et al., 2017, 2019) Nevertheless, while this is well documented, organizations have not utilized these
findings since there is a lack of a conceptual framework of what to think and what to do while applying
new approaches to reward strategies. Second, we summarize findings regarding the functional meaning
of rewards, which is a matter of high theoretical and practical importance. A series of findings
suggests that rewards can have a distinct effect on individuals’ motivation and performance, depending
on whether they take on a need‐ supportive or controlling meaning (e.g., Thibault Landry, Forest,
Zigarmi, Houson, & Boucher, 2017; Thibault Landry, Zhang, Papachristopoulos, & Forest, 2019, Black
& Deci, 2000; Grolnick & Ryan, 1989; Joussemet, Koestner, Lekes, & Houlfort, 2004; Soenens,
Vansteenkiste, Duriez, & Goossens, 2006; Williams & Deci, 1996). In this vein, we propose future
avenues in terms of how the functional meaning of rewards can be incorporated in both research efforts
as well as practical implications. Third, we provide a framework on how methodological concerns (e.g.
SDT research to a great extent has solely made use of correlational cross-sectional designs) regarding
rewards and SDT related research can be improved in the future.
Anaïs Thibault Landry, Konstantinos Papachristopoulos, Yu-Shan Hsu and Yu-Ping Chen
One possible reason that influences monetary rewards' effect on employees’ work attitudes and
behavior could be that individuals may engage in an activity based on different motivations, either for
the external, financial gain, or for its own sake and enjoyment (Frey & Jegen, 2001; Krug & Braver,
2014). Self-Determination Theory (SDT; Ryan & Deci, 2000a), an empirically derived theory of
human motivation that differentiates motivation in qualitative terms as ranging from autonomous to
controlled, can provide a theoretical lens to guide us in understanding the inconsistencies across
research findings on the effectiveness of monetary rewards on employees’ work outcomes. According
to SDT, autonomous motivation is comprised of intrinsic and identified motivation. Controlled
motivation, on the other hand, is comprised of extrinsic and introjected motivation (Deci & Ryan,
2000). Individuals are said to have autonomous motivation when they partake in an activity for fun
(intrinsic motivation) and when they view it as in line with their values and identity (identified
motivation). The inclusion of identified motivation is especially important when it comes to the
workplace. Indeed, identified motivation (Bureau et al., 2018) would appear to be key when
considering employee motivation since individuals’ work is not solely comprised of tasks that are fun.
On this point, any job is likely to have components that are less fun and intrinsically enjoyable, but
that, nonetheless, are valuable and need to be completed. In this light, it is very likely that individuals
would develop identified motivation for their job. Individuals are said to have controlled motivation
when their participation is externally driven and instrumental in making gains (extrinsic motivation),
avoiding punishment, alleviating feelings of guilt, or satisfying their ego (introjected motivation). The
inclusion of introjected motivation is also important in the context of work, since many individuals on
the job market are likely to take on jobs out of pride and reputation, and judge their work based on ego,
guilt, or shame (Moran, Diefendorff, Kim, & Liu, 2012).
In addition to conceiving motivation in more nuanced, qualitative ways (i.e., autonomous and
controlled motivation), a central assumption of SDT (Deci & Ryan, 2000) is that employee attitudes
and behaviors are dependent on whether the activities they engage in - at work, in this case - contribute
to the satisfaction of their three basic psychological needs for competence, autonomy, and relatedness.
For competence, individuals must feel that they have all the skills required so as to influence their
environment and achieve their goals (Deci & Ryan, 2000a). For autonomy, individuals have to feel that
the activity they are pursuing is congruent with their personal values and have a sense of volition when
exercising it (Sheldon & Bettencourt, 2002). For relatedness, individuals need to feel that they are and
can be emotionally connected to other people in their (work) environment (Baumeister & Leary, 1995).
According to the theory, and supported by much empirical evidence collected over the span of 40
years across the globe, these three basic psychological needs can be more or less fulfilled depending on
the context, and greater satisfaction of these needs generally leads to better outcomes (Ryan & Deci,
2008). Existing research conducted with workers occupying a wide range of positions in a variety of
organizations and industries throughout the world supports SDT and shows that greater psychological
need satisfaction at work is associated with more optimal functioning, as indicated by greater
autonomous motivation, performance, affective commitment, job satisfaction, and psychological health
(e.g., Ryan, Bernstein, & Brown, 2010; Trépanier, Forest, Fernet, & Austin, 2015; Vansteenkiste et al.,
2007; Van den Broeck et al., 2008; Van den Broeck et al., 2016).
On the flip side of need satisfaction is need frustration. Studies investigating the role of
psychological needs in individuals’ lives also point to the finding that active infringement of these
needs, otherwise called psychological need frustration, in any given setting, including the workplace, is
associated with suboptimal functioning (e.g., Shuck et al., 2015; Vansteenkiste & Ryan, 2013). Indeed,
when individuals’ basic psychological needs are actively thwarted, whether this is due to them feeling
incompetent at what they are doing (i.e., competence need frustration), being coerced into behaving in
a certain way (i.e., autonomy need frustration), or being rejected by their peers (i.e., relatedness need
frustration), they typically experience more negative and suboptimal functioning. At work, employees
who experience greater psychological need frustration report more controlled motivation and
psychological ill-being, as well as less affective commitment and job satisfaction (Gillet et al., 2012;
Trépanier et al., 2015; Van den Broeck et al., 2010). These negative employee attitudes in turn lead to
negative employee behaviors, including lower performance (Van den Broeck et al., 2010), greater
deviant behavior (Bureau et al., 2018), fewer prosocial, collaborative, and extracurricular efforts, such
as lending assistance to colleagues, sharing information and knowledge, volunteering at the office, and
participating in team initiatives (e.g., Bureau et al., 2018; Thibault-Landry et al., 2017).
SDT assumes that factors which facilitate need satisfaction may help mitigate the undermining
effect of monetary rewards, creating the appropriate supportive conditions in which performance-
contingent rewards can enhance, rather than crowd out, intrinsic motivation (Ryan & Deci, 2018). Such
Int. Journal of Business Science and Applied Management / Business-and-Management.org
supportive factors include, but are not limited to, perceived organizational support (Gillet et al., 2012),
perceived supervisor autonomy support (Gillet et al., 2012), and the perceived meaning and usefulness
of the job (Kosfeld, Neckermann, & Yang, 2017).
According to SDT, on the one hand, when employees feel their needs are satisfied satisfied, they
are likely to be motivated and demonstrate desirable attitudes and behaviors. On the other hand, when
employees feel their needs are frustrated, they are less likely to be motivated and demonstrate
suboptimal attitudes and behaviors. So, the question becomes, when employees are presented with
monetary rewards, do these rewards satisfy or thwart their needs and, as a result, lead to different
attitudes and behaviors at work, thus explaining the inconsistent findings observed in the compensation
literature so far? Research has shown that monetary rewards could have different functional meanings.
Monetary rewards can be perceived as informative when presented in a supportive way so as to
encourage individuals’ efforts and participation in the activity, and convey appreciation and
acknowledgement of their contribution. Thus, when monetary rewards are perceived as informative,
they may positively contribute to employees’ psychological needs (Gagné & Deci, 2005; Moller &
Deci, 2014; Thibault-Landry et al., 2017; 2019a; Tremblay, Blanchard, Taylor, Pelletier, & Villeneuve,
2009). Conversely, monetary rewards can be perceived as controlling when presented in an oppressive,
constraining way that pressures employees and emphasizes the performance goals that need to be
reached (Deci et al., 1989; Kuvaas, Buch, & Dysvik, 2018). Hence, when monetary rewards are
perceived as controlling, they may hamper psychological needs.
Thibault-Landry and her colleagues (2017; 2019a; 2019b) empirically tested these SDT-
postulates, exploring the functional meaning of monetary rewards, and investigating how and why
monetary rewards perceived as having an informative meaning and those perceived as having a
controlling meaning could lead to different employee psychological experiences and functioning at
work. They found empirical evidence that when it comes to informative monetary rewards, perceiving
monetary rewards as informative appeared to be associated not only with feeling meaningfully
connected, competent, and (even more so) autonomous at work, but they could potentially buffer
against feelings of incompetence, oppression, and rejection in the workplace, thus leading to optimal
functioning at work (Thibault-Landry et al. 2019a). When it comes to controlling rewards, their results
suggest that perceiving monetary rewards as controlling is associated with more negative psychological
experience in the workplace, beyond feeling restricted, to feeling actively pressured and coerced into
behaving in certain ways at work, thus leading to suboptimal functioning at work (Thibault-Landry et
al., 2019a). As explained by Ryan and Deci (2018), “performance-contingent rewards have a strong
risk of having controlling functional significance insofar as one feels pressured to meet an externally
specified standard to get the reward” (p.133). This type of controlling significance implies that
employees no longer feel in control of the tasks that they consider important, but rather begin to shift
their attention to those tasks that would dictate their reward allocation.
In the same stream of research, Thibault-Landry and her colleagues (2017; 2019a) found evidence
of a significant association between the functional meaning of monetary rewards and employees’
psychological needs, including specifically the need for relatedness. This suggests that monetary
rewards can have an effect on one’s sense of belonging and connection to others at work. This is
consistent with past research findings linking monetary rewards with collaboration and teamwork,
helping explain why, under some circumstances. That is, when perceived as controlling, monetary
rewards can be associated with less cooperation amongst peers and colleagues, as well as a lower
likelihood of engaging in pro-social behaviors like helping others. Further corroborating this,
Papachristopoulos and Xanthopoulou (2019) found that relatedness need satisfaction moderated the
relation between the informative and controlling meaning of rewards and deviant behavior in such a
way that both meanings of monetary rewards related positively to deviant behavior under conditions of
low relatedness need satisfaction, while they were unrelated to deviant behavior under conditions of
high relatedness need satisfaction.
This emphasizes the point that offering a monetary reward, as well as any other type of rewards,
occurs within the context of a social exchange between a giver and a recipient, and that, as a result, this
reward can take on different meanings for the recipients based on their perceptions of the giver’s
intention. More specifically, together, these findings suggest that it is the functional meaning
(informative or controlling) and the recipient’s interpretation of the reward, not the reward itself, which
can have motivating or de-motivating effects (Thibault-Landry et al., 2017; 2019b). Hence, for
monetary rewards to be efficient tools to motivate employees in healthy and optimal ways, there has to
be a genuine intent on behalf of the giver (i.e., the employer or the manager), and such an intent needs
to be perceived by the recipient (i.e., the employees).
Anaïs Thibault Landry, Konstantinos Papachristopoulos, Yu-Shan Hsu and Yu-Ping Chen
Figure 1: An SDT model explaining how to better leverage monetary rewards
Monetary rewards can bring optimal or sub-optimal outcomes from employees based on the
functional meaning of rewards for employees. How can organizations ensure that the monetary rewards
they offer to employees are perceived as informative, and not controlling, in order to achieve the
optimal outcomes? Such factors or boundary conditions may stem from the giver, the receiver or the
social contexts. In Figure 1 a summary is provided regarding the research findings above as well as the
potential factors and boundary conditions for the effectiveness of rewards.
3.1 The Employee
Given that employees' perceptions determine the functional meaning of monetary rewards, it is
important to understand employees' predispositions, biases, and personality traits as they may influence
whether employees perceive monetary rewards as informative or controlling. Indeed, given the same
culture and the same organization, employees tend to interpret external events differently based on their
personality, beliefs, values, and orientations (Jacobsen et al., 2014).
For example, personality traits such as individual trait competitiveness (the enjoyment of
interpersonal competition and the desire to win and be better than others; Gläser & Van Quaquebeke,
2017; Spence & Helmreich, 1983), and beliefs such as the financial contingency of self-worth (the
extent to which individuals base their self-worth on their financial success; Park, Ward, & Naragon-
Gainey, 2017) and self-efficacy beliefs (the extent to which individuals believe in their own abilities to
overcome situations; Bandura, 2010) may influence the way employees perceive and interpret the
monetary rewards presented to them. On this point, research has shown that employees’ self-efficacy
beliefs positively affect the way they perceive their workplace monetary rewards (Bandura, 2010).
Greater self-efficacy beliefs could buffer against perceiving monetary rewards as controlling, thus
mitigating against the potential negative effects of such a practice (Park & Yang 2017). Research has
also shown that employees with high financially contingent self-worth experienced less autonomy at
work and perceived financial problems more negatively and employees with such beliefs may perceive
monetary rewards to be more controlling (Park et al., 2017). On a related note, Gläser and Van
Quaquebeke (2017) argued that pay for performance may increase employees’ interpersonal deviance,
particularly when employees are high in individual competitiveness
Organizations should also take into account employees’ personal characteristics, such as their
extrinsic or intrinsic work values, and their causality orientations (the tendency to perceive actions as
originating from the self) (Deci & Ryan, 1985). Extrinsic work values focus on the consequences or
outcomes of workthe tangible rewards external to the individual, such as income, advancement
opportunities, and status. In contrast, intrinsic work values focus on the process of workthe
intangible rewards that reflect the inherent interest in the work, the learning potential, and the
opportunity to be creative. (Ryan & Deci, 2000; Kasser, 2016; Twenge, Campbell, Hoffman, & Lance,
2010). Studies have reported that person-specific orientations towards autonomy and self-initiation tend
to protect employees from the negative impact of performance-contingent rewards on intrinsic
motivation (Hagger & Chatzisarantis, 2011, p.485). As such, Hagger and Chatzisarantis (2011) showed
that causality orientations towards autonomy - as opposed to control - could effectively mitigate against
the risk of suboptimal work behavior upon the use of rewards.
Int. Journal of Business Science and Applied Management / Business-and-Management.org
Last but not least, in light of today’s increasingly age-diverse workforces, organizations face the
challenges of fostering job satisfaction among both younger and older workers. Due to age-related
differences in motives and career goals, younger versus older employees’ job satisfaction vary
differently in line with monetary rewards (Kollmann, Stöckmann, Kensbock, & Peschl, 2020).
Kollmann and his colleagues (2020) suggest that there can be no “one size fits all” monetary reward
approach to satisfy both younger and older employees (cf., Hornung, Rousseau, Weigl, Mueller, &
Glaser, 2014). Researchers (Kollmann et al., 2020; Stone & Deadrick, 2015) have further indicated that
based on the differential value and interpretation that younger and older employees place on monetary
and non-monetary rewards, aligning reward and compensation systems with the values of the age-
diverse workforces can be an effective way for organizations to attract, motivate, and retain age-diverse
3.2 The Type of Rewards
Employees nowadays put considerable thought into why they are working, what they are working
in, and where they are working, as they have become more critical of their career choice and are
looking for deeper and more personal sources of motivation (Ibarra, 1999; Iyengar, Wells, & Schwartz,
2006; Shamir, 1991). This is especially the case for younger professionals entering the job market, who
care not only about the monetary rewards they get from their work (e.g., the annual bonuses and spot
awards), but also the non-monetary rewards, such as additional time off, vacations, skill training, and a
sense of meaning and purpose (Schweyer, Thibault-Landry, & Whillans, 2018. ; Esfahani Smith &
Aaker, 2013; Whillans et al., 2016). While younger employees value recognition from peers and
organizations, they also highly value autonomy at work and they might perceive the contingencies for
some type of rewards as more controlling (Morell & Abston, 2018). Therefore, organizations should try
to consider alternative forms of rewards that fulfill employees’ needs for competence, autonomy, and
relatedness. For example, organizations may leverage other types of rewards that are not necessarily
based on money or that have a value that extends beyond money, as these may be more likely to be
perceived as conveying genuine recognition and appreciation. Non-monetary rewards such as flexible
work hours, paid and unpaid leave, skill development, a choice of assignments can thus be considered
to avoid the drawbacks that come with more traditional forms of monetary rewards and may better
fulfill their basic psychological needs (Thibault-Landry & Whillans, 2018).
Recent studies looking at non-monetary rewards, including gift certificates, travel, and luxury
goods and products, suggest that they may better convey appreciation and sincerity than monetary
rewards (e.g., Kelly, Presslee, & Webb, 2017). These forms of rewards are said to avoid “mental
accounting” (Thaler, 1999), in which employees subconsciously deposit monetary rewards into
“mental” accounts to pay routine bills, as these non-monetary rewards are consumed in fun, memorable
ways, creating positive associations with the giver the employer- which triggers a reciprocity effect,
causing higher engagement and commitment to the organization. Of course, the efficiency of non-
monetary rewards to palliate some of the problems associated with monetary rewards applies only to
the extent that these non-monetary rewards are used in a different way, and not simply as an alternative
commodity prone to the same setbacks as cash (such as in points systems). If used in a similar tit-for-tat
mentality, non-monetary rewards based on points systems rewarding “good” behavior may have the
same effect as monetary rewards used as carrots. Hence, replacing one with the other would most
probably not solve the problems encountered when rewarding specific behaviors at work with money.
Presented more appropriately as a gift, non-monetary rewards may help foster stronger, positive
associations between the employer and the employee, by creating opportunities for greater emotional
attachment to the organization (Kelly et al., 2017). In a similar vein, researchers (e.g., Frey & Gallus,
2017; Gallus & Frey, 2017) also argue that rewards, ranging from the “employee of the month” title to
prizes, decorations, orders, and other honors, even if they are purely symbolic without having
significant monetary value, can significantly raise employee performance. Indeed, Bruni, Pelligra,
Reggiani, and Rizzolli (2019) found that while both monetary and non-monetary rewards can increase
employees’ motivation to perform when presented publicly, only non-monetary rewards crowd-in
intrinsic motivation and promote virtuous attitudes. Thus, organizations should leverage other types of
rewards that are not necessarily based on cash or that have a value that extends beyond money and
research should be conducted to test how different types of rewards can take on either informative or
controlling meanings. This would help organizations, as increasing numbers of workers report their
interest in both the tangible and financial benefits they get from their work (e.g., their salary), and the
intangible benefits and rewards such as career advancement and promotions, meaning and purpose, a
positive workplace culture, and alignment with their own values, aspirations and identities (Thibault-
Landry et al., 2019b).
Anaïs Thibault Landry, Konstantinos Papachristopoulos, Yu-Shan Hsu and Yu-Ping Chen
3.3 The Organizational Context
Most importantly, giving monetary rewards in a way that conveys recognition and appreciation is
a complex relational task (White, 2017). Thus, the key players in the allocation and distribution of
monetary rewards are the managers (as the givers). This points to the importance of managers in
representing the organization. They act as significant leaders in their workplace, department, or unit, to
whom employees turn in order to decipher and understand the norms, and rules of conduct (Bass,
1999). As such, they embody organizational values and build the workplace culture (e.g. Danna &
Griffin, 1998; Rynes, Gerhart & Parks, 2005). Managers thus need be mindful of the way they treat
their employees, given that this could have a considerable impact at different scales, including on the
unit’s work climate, the organization’s culture, and, more broadly, the employer’s image (Bass, 1990).
This points to the importance of providing managers with the appropriate training and resources to be
able to take on what has been described as a “critical” role, and convey genuine appreciation and
recognition when leading reward initiatives (Gostick & Elton, 2009).
Much research underscores the importance of employees’ relationships with their immediate
supervisors, whether it be in their daily experience of the workplace, or ultimately, in their decision to
commit to and stay in the organization. For example, employees who experience more positive
relationships with their managers report greater commitment to their organization and are less likely to
quit their job, whereas the opposite appears to be true for employees who experience more negative
relationships with their managers (Kang, Gatling, & Kim, 2015). Many studies corroborate this,
showing that employees’ trust in their managers, and positive perceptions of their treatment at work,
are positively associated with their commitment to the organization and well-being at work, thus
indicating how crucial managers are in how employees perceive rewards (e.g., Kelley et al., 2017;
Wang & Yang, 2016).
From this perspective, similar to sports, where coaches’ styles influence athletes’ outcomes, in
education, where parents and teachers influence children’s behavior, and in healthcare, where
caregivers, doctors, nurses and the like have a direct effect on patients’ health and treatment adherence,
managers have a direct influence on how monetary rewards are communicated and presented to
employees, that is, in an autonomy-supportive or controlling way, and thus they significantly influence
their perceptions of such rewards. Hence, it would be important to train managers to adopt an
autonomy-supportive communication style rather than a controlling one: take into account
employees’ psychological needs (Aguinis, Joo, & Gottredson, 2013) and foster quality relationships
with their employees, so that employees are more likely to perceive the functional meaning of
monetary rewards as informative rather than controlling.
Research from SDT offers guidelines in terms of the behaviors and attitudes for managers to adopt
when seeking an autonomy-supportive communication style, as opposed to a controlling style. This
includes: fostering inner sources of motivation, relying on non-controlling language, providing
explanation and rationales, and acknowledging and accepting negative experiences and affect (e.g.,
Deci et al., 1989; Hardré & Reeves, 2009). In the specific case of reward programs, managers can
support employees’ psychological needs for autonomy by asking them for their perspective and
providing a meaningful rationale when alternative choices are not possible. They can also support
employees’ need for competence by setting an optimal level of challenge (i.e., a realistic level aligned
with employees’ skills) without just focusing on ex-ante bonuses. On the other hand, by setting
unrealistically high expectations, managers can undermine employees’ sense of competence, even
when rewards are possible and/or of high value. Managers can also support employees’ relatedness
needs by acknowledging feelings that are associated with rewards (e.g., “Do you feel fairly paid?”) and
by creating a context that does not threaten their need for connection (e.g., heightened competition, low
transparency, fairness, or controllability). So far, the studies conducted in the workplace show that
training managers is possible and leads managers to exhibit a more autonomy-supportive style, which
then leads employees to report more autonomous motivation and workplace engagement (e.g., Deci et
al., 1989; Hardré & Reeves, 2009). Ensuring that managers get adequate training and use an
autonomy-supportive communication style with their employees can thus be a useful tool to create the
necessary conditions for performance-contingent rewards to enhance, rather than crowd out, intrinsic
motivation (Ryan and Deci, 2018).
3.4 The Cultural Context
Having established the interactional nature between employers as reward givers and employees as
reward receivers, factors related to the workplace itself could influence the extent to which employees
perceive rewards as informative or controlling (e.g., Cerasoli et al., 2014; Deci et al., 1999a; Deci &
Ryan 1980; Gagné & Forest, 2008; Olafsen et al., 2015). Indeed, a study completed under an Incentive
Research Foundation (IRF) grant (Kelly, Presslee, & Webb, 2017) studied the effects of performance-
Int. Journal of Business Science and Applied Management / Business-and-Management.org
contingent monetary rewards presented within distinct workplace culture conditions in organizations.
Where monetary rewards were used in positive workplace cultures featuring employee inclusion, high
trust, and autonomy, the rewards were perceived more positively, thus suggesting an informative
meaning. On the other hand, where the workplace culture was less progressive, and even coercive (i.e.,
command & control style management, hierarchical, distrusting), the rewards were perceived more
negatively, thus suggesting a manipulative and controlling meaning.
In a similar vein, the workplace culture could further encompass justice perceptions related to the
process of reward allocation and distribution. To this end, one way to ensure procedural justice and
thus increase the probability that monetary rewards are perceived as informative, rather than
controlling, would be to maintain a credible linkage between performance and rewards. Employees
want to know what to expect, and how fairness will be ensured (Rasher, 2014). Research shows that
when employees are involved in the planning process and their opinions are considered, especially
when problems surface, they are more likely to feel performance expectations are fair, feel committed
to achieving the plans and look for constructive feedback and advice as the year unfolds (Rasher,
2014). This thus prevents any negative expectations or surprises at the end of the year - as the notion of
procedural justice encompasses the entire process from the beginning of the year when performance
plans are elaborated until the year-end discussion of development plans, salary increases, and bonus
awards. In doing so, employees’ needs for competence, relatedness, and autonomy are more likely to
be satisfied and, as a result, monetary rewards are more likely to be perceived as informative.
The workplace culture can further be tainted by the glocalization of the organization. National
culture might thus influence the degree to which monetary rewards are perceived as informative or
controlling, since research shows that cultural dimensions systematically relate to differences in
preferences for reward types, systems, and criteria as well as the occurrence of practices (Papalexandris
& Panayotopoulou, 2004; Schuler and Rogovsky, 1998; Chiang & Birtch, 2007). For example,
Nadeem, Raza, Kayani, Aziz, and Nayab (2018) indicated that monetary rewards, especially contingent
compensation, are perceived differently by employees in different cultures. Similarly, rewards based on
individual performance were found to be favored and perceived as self-fulfilling (informative) in
cultures with high individualism and high-performance orientation (Chiang, Lemanski, & Birtch,
2017). Workplace rewards may also be perceived differently based on the distribution of power and/or
the power-distance cultural background of the employees (e.g., Hofstede, 1980; Moe et al. 2018).
Hence, cross-cultural scholars (e.g., Gelfand, Aycan, Erez, & Kwon, 2017) have recently urged both
researchers and practitioners to explore the meaning of “universal” (i.e., etics) versus “culturally
embedded” (i.e., emics) HR practices, as employees may attribute different meaning toward the same
HR practices (i.e., rewards and compensation, performance evaluation). On this point, the motivational
effects of pay systems should further be considered in a poly-contextual approach since cultural
differences may also be confounded with the national legal restrictions and the economic/ institutional
context (Tsui et al., 2007).
Finally, the organization’s culture can reflect the nature of the organization, whether it is for profit
or not-for-profit, and this is likely to have an impact on the use and perception of monetary rewards
(Vansteenkiste, Ryan, & Soenens, 2020). Indeed, studies have shown that employees in public
organizations tend to value lower-powered incentive structures and intrinsic rewards to a greater extent
than those in the private sector (Crewson,1997; Perry et al., 2010). Illustrating this, in for-profit
organizations, compensation is more likely to be based on the entire organization’s performance, and
promotion is more likely to be based on the unit’s performance, which may increase the expectation
that managers will be aggressive in pushing their people to accomplish organizational goals (Bailey &
Risher, 1996).
To be competitive, for profit organizations are more likely to signal controlling monetary rewards
instead of informative monetary rewards. On the other hand, not-for-profit organizations are more
likely to offer rewards that fulfill individual values and psychological needs. For example, for-profit
organizations may be more likely to utilize monetary and/or tangible rewards, such as prizes and
money, to reinforce the importance of performance and achievement, while not-for-profit organizations
may be more likely to use non-monetary and/or intangible rewards, such as social impact, distinctions,
and honors. The not-for-profit sector typically operates under different missions, motives and values,
and realities than for-profit organizations. For example, they are usually devoted to social goals that
diverge from those of for-profit organizations, and they may not face the competitive pressures felt by
for-profit organizations. In short, practitioners in for-profit organizations may want to pay more
attention to the above proposals to avoid the pitfalls of monetary rewards given the riskier landscape
and different competitive environment of for-profit organizations. See Figure 2 for a summary of our
suggestion about how to carefully elaborate reward programs.
Anaïs Thibault Landry, Konstantinos Papachristopoulos, Yu-Shan Hsu and Yu-Ping Chen
Figure 2. Proposals for leveraging informative monetary rewards
This current article has provided some suggestions both on a theoretical and practical level
regarding a more functional way of providing rewards in the light of SDT related research findings.
Recent articles (e.g., Olafsen & Deci, 2020, Deci, Olafsen & Ryan, 2017) have made suggestions for
future research in terms of rewards strategy (e.g., examining how tangible rewards and pay affect the
internalization of regulations for work behaviors) and in this current study we aimed at integrating
these aspects in both a theoretical and applied way. In the previous section we highlighted the four
pillars that future research and practice need to focus on so that rewards can play their role in an ever-
changing work environment. With a more horizontal approach, this research suggests that more
intervention studies (e.g., Lundmark, von Thiele Schwarz, Hasson, Stenling, & Tafvelin, 2018, Kuvaas
et al., 2016) should be applied in the rewards domain in order to relate the functional significance of
various pay contingencies to motivations and work outcomes. Moreover, future research needs to
reconcile inconsistencies in the literature by considering particular conditions under which performance
contingent incentives may effectively sustain motivation in the workplace (Corduneanu, Dudau &
Kominis, 2020). On the same lines, since the functional meaning of rewards concept has lately
attracted a great deal of interest (Thibault Landry et al., 2019, 2017) more research in the field is
needed to investigate how monetary rewards are presented in the workplace, including how
organizations present reward programs to their employees and to identify the best way to leverage
monetary rewards to foster an informative meaning and intrinsic as well as identified motivation. Last
but not least, SDT scholars should contribute so that the basic SDT model for rewards in the workplace
should gain more confidence and nuance as well as theoretical establishment, with longitudinal studies
(e.g, Fernet et al., 2019), multilevel studies (e.g., Gagné, Morin, et al., 2019) and relevant meta-
analyses and metanalytic reports (e.g., Slemp et al., 2018, Deci, Olafsen & Ryan, 2017).
The current article aimed at strengthening the general claim that money in and of itself has little
value when taken in isolation, and that it is the social construct surrounding it, that is, its meaning, that
provides it with a desirable nature. As such, we reviewed evidence for organizations to help better
leverage their reward initiatives, and ensure that the rewards they offer to their employees are perceived
as informative, rather than controlling. We argue that by better understanding employees’ attributes,
considering alternative forms of rewards, providing communication training to managers, and being
mindful of the workplace and national context, organizations will be more likely to address employees’
desires, drive optimal workplace functioning, and face the reality of the 21st century. Indeed, the reality
of the workplace is becoming increasingly complex as there exists a broad spectrum of workplace
tangible and intangible, monetary and non-monetary rewards. Reward programs in modern society are
fast evolving and can now include much more solely base pay and monetary rewards like bonuses and
stock options, but also cash-like rewards such as gift cards, non- monetary tangible rewards like luxury
goods, and intangible rewards such as flexible work options.
Int. Journal of Business Science and Applied Management / Business-and-Management.org
With so many components, offering any type of reward, irrespective of its form or value, would
appear to be no simple task, there is a growing need to better study, identify, understand, and
implement specific organizational practices when giving out rewards at work to improve the likelihood
of them being perceived by employees as informative. To remain on top of our field, we need to study
these total reward strategies to help organizations best choose the specific types of rewards to include
in their reward programs, and more importantly to ensure that these rewards are perceived as
informative, contribute to satisfying employees’ psychological needs, and, ultimately, generate a
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