Building Support? The Importance of Verbal Rewards for Employee Perceptions of Governance Initiatives

Abstract

ABSTRACTThe relationship between managers’ use of rewards and employees’ motivation is controversial, but recent research suggests that employee perceptions of governance initiatives can help us understand the association. Experimental evidence further emphasizes the difference between verbal and material rewards, and this study therefore analyzes real-world public managers’ use of these different rewards and their employees’ perceptions of a governance initiative. This enables us to shed light on a mechanism through which rewards can be connected to motivation. Can rewards contribute to a supportive perception of governance initiatives and potentially crowd-in motivation? This is analyzed in a multi-level dataset with 82 Danish school principals and their 1,273 employees. Managers’ use of contingent verbal rewards is positively associated with employees’ perceptions of the relevant governance initiative, while the corresponding association between material rewards and employee perceptions is weak and statistically insignificant when controlling for other types of managerial behavior. Although the findings need to be tested in an experimental design, they suggest that verbal rewards are a promising tool for public managers.