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Management article
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Reference no. AMSJ10-11
Authors: James Turner
Published by: Allied Business Academies
Published in: "Academy of Marketing Studies Journal", 2006
Length: 18 pages

Abstract

This paper presents research from various disciplines and various settings revealing counter-intuitive results deriving from the use of rewards. It is hypothesized that these results obtain by virtue of the salience of the reward - contrary to models such as expectancy theory which suggest that to be effective, rewards must be salient. A salient reward distracts the subject from fully engaging in the process required to obtain the reward: shortcutting. The reward also seems to interfere with a person's need for autonomy. A model is proposed for understanding the effects of incentives as major components of compensation systems. This model relates the negative effects of reward contingency on three organizational outcomes: in-role performance, extra-role performance, and turnover.

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Abstract

This paper presents research from various disciplines and various settings revealing counter-intuitive results deriving from the use of rewards. It is hypothesized that these results obtain by virtue of the salience of the reward - contrary to models such as expectancy theory which suggest that to be effective, rewards must be salient. A salient reward distracts the subject from fully engaging in the process required to obtain the reward: shortcutting. The reward also seems to interfere with a person's need for autonomy. A model is proposed for understanding the effects of incentives as major components of compensation systems. This model relates the negative effects of reward contingency on three organizational outcomes: in-role performance, extra-role performance, and turnover.

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