Perceived financial incentive salience and its undermining effect: A moderated-mediation model

Abstract

How incentives are perceived by a receiver can determine how they affect their autonomy and intrinsic motivation. Guided by self-determination theory, we investigate the relationship between perceived financial incentive salience (PFIS) and change in intrinsic motivation by focusing on the mediating role of autonomy frustration and the moderating role of task heuristic. To test this model, we utilize a repeated-measure two-wave design in two field studies (n = 169 and 341) under a non-contingent versus contingent pay system. The findings demonstrated that perceived salience is a key determinant behind the undermining effect caused by financial incentives, independently of incentive contingency. In addition, task heuristic and autonomy frustration are crucial factors in understanding the nuances behind the undermining effect. Under both types of incentive systems (a) PFIS had a positive association with autonomy frustration, and (b) PFIS and autonomy frustration both related negatively to intrinsic motivation in high-heuristic tasks. However, the autonomy frustration-intrinsic motivation relationship and PFIS-intrinsic motivation relationship had considerable differences in low-heuristic tasks among non-contingent versus contingent systems. We discuss the implications of the findings for future research on incentive salience and work motivation.