Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86064
Authors: 
van Herpen, Marco
van Praag, C. Mirjam
Cools, Kees
Year of Publication: 
2003
Series/Report no.: 
Tinbergen Institute Discussion Paper 03-048/3
Abstract: 
This paper analyzes empirically the relationship between pay and performance. Economic and psychological theories predict that the design and implementation of a performance measurement and compensation system affect the motivation of employees. Our survey results demonstrate a positive relationship between the perceived characteristics of the complete compensation system and extrinsic motivation. Intrinsic motivation is not affected by the design of monetary compensation, but by promotion opportunities. The compensation system also significantly affects work satisfaction and turnover intent. Our results have both managerial as well as policy implications.
Subjects: 
Performance measurement
Compensation
Promotions
Intrinsic Motivation
Extrinsic Motivation.
JEL: 
J41
J33
Document Type: 
Working Paper

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