The hidden costs of financial incentives at work are in the eye of the beholder



There is debate in the rewards literature about whether financial incentives undermine motivation and/or improve performance. However, to date, we have largely failed to consider the stress and coping processes involved in striving to achieve such incentives. In this program of research, we consider the role of individuals' cognitive (or stress) appraisals of the requirements of their reward scheme, and the consequences of this appraisal process for well-being. Whether an incentive is beneficial or detrimental to an employee's well-being could be “in the eye of the beholder”. In laboratory and field studies, we sought to examine the relationship between cognitive appraisals of performance-based reward requirements (i.e., whether the requirements to obtain rewards are viewed as a challenge or a hindrance) and self-reported levels of job strain. Our results suggest that it is when reward requirements are appraised as a hindrance that there are costs to well-being (including increased job strain). We further examine if the different motivational components from self-determination theory can explain these effects, and find some preliminary evidence that motivational states activated by cognitive appraisals can explain why hindrance (and not challenge) appraisals of reward requirements are associated with impaired well-being.

Speaker Bio:
Stacey joined UQ Psychology as a Lecturer* in 2013. This was following a postdoctoral research position at QUT Business. She completed her PhD in occupational health psychology at UQ Psychology in 2012. Her research focuses on employee stress and motivation. Through this work she aims to help organisations and their employees devise new strategies to work healthier while still being productive. Stacey is an organisational psychologist who consults to both private and public organisations; on issues like recruitment and selection, training and development, workload management, and operational safety. She also serves on the editorial board for the Journal of Occupational Health Psychology.