The Study of Compensation Systems Through the Lens of Self-Determination Theory: Reconciling 35 Years of Debate

Although compensation specialists generally argue for incentive systems that link rewards to performance, self-determination theory argues that such contingent rewards can have detrimental effects on autonomous motivation. The authors present a model of the motivational effects of compensation systems that attempts to reconcile the self-determination theory view and the literature on compensation. This model evaluates how compensation system characteristics, such as the amount and variability of pay, can influence the satisfaction of the needs for autonomy, competence, and relatedness, which in turn influence autonomous work motivation.