The effect of extrinsic rewards on public and private sector employees' psychological empowerment: a comparative approach

Abstract

This paper examines the impact of five extrinsic rewards (financial incentives, promotion opportunities, organisational prestige, relations with supervisor and relations with peers) on employees' psychological empowerment. Further, the present study compares these effects and the level of psychological empowerment between public and private employees. The results demonstrated that extrinsic rewards differentially affected both samples. Financial incentives, promotion opportunities and organisational prestige had a stronger effect on private employees' psychological empowerment, whereas relations with supervisor and peers were significant predictors of public employees' psychological empowerment. The results also indicated that private employees experience greater psychological empowerment, meaning and impact than public counterparts.