Extrinsic rewards and creative performance syndrome: The mediating mechanism and interacting effects

Abstract

Despite the widespread use of extrinsic rewards (ERs) to enhance employees’ creative performance (CP), the debate on the effectiveness of these rewards on employees’ creativity remains inconclusive. The present study, therefore, aims to empirically examine the effect of ERs on CP of employees by taking intrinsic motivation (IM) as an important psychological mediator linking ERs to CP. In addition, this study examines the moderating effects of distributive and procedural organizational justice (OJ) on the ERs-IM relationship, and consequently on CP. Using survey data from 303 employee-supervisor dyads working in the banking industry of Pakistan, our results demonstrate that ERs exert an indirect but significant effect on employees’ CP through IM. Our study supports that ERs have a positive relationship with IM, and consequently with CP, particularly when the perception of distributive and procedural justice is higher. These findings are useful for managers to channelize the creative abilities of employees towards the desired direction through prudent measures and for researchers to have nuance perspective on the above relationships in the context of an emerging market i.e., Pakistan.