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Intrinsic motivation, external reward, and their effect on overall motivation

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DOI: 10.1080/08959285.2016.1157595
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Human Performance
ISSN: 0895-9285 (Print) 1532-7043 (Online) Journal homepage: http://www.tandfonline.com/loi/hhup20
Intrinsic motivation, external reward, and their

effect on overall motivation and performance
Rosa Hendijani, Diane P. Bischak, Joseph Arvai & Subhasish Dugar
To cite this article: Rosa Hendijani, Diane P. Bischak, Joseph Arvai & Subhasish Dugar (2016):
Intrinsic motivation, external reward, and their effect on overall motivation and performance,
Human Performance, DOI: 10.1080/08959285.2016.1157595
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HUMAN PERFORMANCE
http://dx.doi.org/10.1080/08959285.2016.1157595
Intrinsic motivation, external reward, and their effect on overall

motivation and performance
Rosa Hendijania, Diane P. Bischakb, Joseph Arvaic, and Subhasish Dugarb
a
University of Colorado; bUniversity of Calgary; cUniversity of Michigan
ABSTRACT
An unresolved debate lingers concerning the effect of performance-contingent
rewards on motivation and performance. Behavioral psychology and economics
suggest that performance-contingent rewards improve performance. In con-
trast, cognitive evaluation theory predicts that performance-contingent rewards
undermine motivation and performance. We discuss the predictions of these
two streams and develop an experiment that resolves the limitations of previous
Downloaded by [24.64.80.236] at 11:36 29 April 2016
studies by using a new measure of intrinsic motivation: self-selection into a

specific area of knowledge, as revealed by choice of academic major. Students
from mathematics-related and literature-related areas were selected and ran-
domly assigned to math and English language tests. Participants received a
participation fee or a performance-contingent payment in addition to a fee. Both
performance-contingent rewards and intrinsic motivation improved motivation
and performance, in contrast with cognitive evaluation theory’s predictions.
Introduction
Motivation is a dynamic process driven by personal, sociopsychological, and contextual factors that
interact with one another (Kanfer, Chen, & Pritchard, 2012). As Pinder (1998) posited, “The forces
that influence motivation occur both within as well as externally to the individual” (Kozlowski, 2012,
p. 457). In other words, motivation is a joint function of internal psychological processes and
environmental factors that can be properly analysed only if the characteristics of the person and
the context within which the action happens are both taken into consideration (Kozlowski, 2012).
One of the key external drivers of motivation is reward. In a variety of forms, rewards are often
utilized to influence individuals and improve their performance (Bartol & Durham, 2000; Eisenberger &
Aselage, 2009). Educational systems use praise, gold star stickers, or grades to induce students to learn
more (Covington & Müeller, 2001). Healthcare systems resort to different pay-for-performance schemes
in the form of individual (e.g., merit pay, skill-based pay, piece rates) or team-based (team incentives,
team recognition) incentives for their physicians and staff to promote the provision of high-quality care
to their patients (Campbell et al., 2007; Christianson, Leatherman, & Sutherland, 2008; Grossbart, 2006;
Van Herck et al., 2010). Organizations utilize financial rewards (pay raises, bonus plans, or stock options)
and recognition awards to encourage motivation and performance among their employees (Garbers &
Konradt, 2014; Govindarajulu & Daily, 2004).
Corroborating these real-world actions, researchers have found external rewards to be beneficial
in a number of empirical studies. In one study, Eisenberger and Aselage (2009) found a positive
effect of rewards on creative performance. In two recent meta-analyses, researchers found that
rewards and incentives were positively linked with quantitative and qualitative aspects of perfor-
mance (Cerasoli, Nicklin, & Ford, 2014; Garbers & Konradt, 2014). In another meta-analysis,
CONTACT Rosa Hendijani rosa.hendijani@colorado.edu 995 Regent Dr., Boulder, CO 80302.

Color versions of one or more of the figures in the article can be found online at www.tandfonline.com/HHUP.
© 2016 Taylor & Francis
2 HENDIJANI ET AL.
rewards showed a reinforcing effect on creative performance, especially when administered in a

positive and contingent way and accompanied by feedback and choice (Byron & Khazanchi, 2012).
In contrast with the widespread belief in rewards, as well as the supporting scientific results,
several researchers have debated the use of rewards as positive reinforcers of behavior, arguing that
rewards can have a detrimental effect on intrinsic motivation toward the task. This effect, which is
referred to as the undermining effect of extrinsic rewards on intrinsic motivation (Deci, Koestner, &
Ryan, 1999), the overjustification effect (Lepper, Greene, & Nisbett, 1973; Tang & Hall, 1995), or the
crowding-out effect (Frey & Jegen, 2001), cautions against the use of rewards, postulating that they
reduce creativity and intrinsic motivation (Kohn, 1999; Pink, 2011). There are several psychological
mechanisms described in the literature that could engender this effect, including the shifting of the
perceived locus of causality from internal to external (De Charms, 1968), attribution of motivation to
the reward rather than the task (overjustification effect) (Lepper et al., 1973), or focusing on the
reward instead of finding ways to accomplish the task (Amabile, 1996).
However, as discussed in greater detail in the next section, the underlying research has some structural
and methodological limitations (Cameron, Banko, & Pierce, 2001; Cameron & Pierce, 1994; Eisenberger &
Cameron, 1996; Madden, Dube, Hackenberg, Hanley, & Lattal, 2013). Furthermore, several factors, such as
the task type (e.g., complex vs. mundane tasks; interesting vs. boring tasks; Gagné and Deci, 2005),
performance measurement (e.g., quantity vs. quality of performance; Cerasoli et al., 2014; Jenkins, Mitra,
Gupta, & Shaw, 1998), unit of analysis (Kanfer et al., 20102), or individual differences (Covington &
Müeller, 2001), may influence the relationship between rewards, motivation, and performance (Kanfer
et al., 2012). In fact, one study indicates that under certain conditions that depend on the individual’s
motivational disposition (Covington & Müeller, 2001), external reward and intrinsic motivation can
become complementary and additive.
To address such inconsistencies, a large body of literature in psychology and economics has examined
the relationship between external rewards, motivation, and performance under a variety of conditions.
External rewards that are contingent upon performance have been of particular interest to researchers, not
only because such rewards are commonly present in everyday life but also because they may conceivably
influence a person’s motivation, and hence performance, in two opposing ways: They may have a positive
effect because they are directly linked to performance, or they may have a negative impact due to their
undermining and behavior-controlling effects (Deci et al., 1999, 2001; Deci & Ryan, 2000). However, the
effect on motivation and performance of these performance-contingent rewards is, surprisingly, still
unresolved, even though it is of obvious interest to every organization that has employees on a payroll.
Two main, and contrasting, streams of research dominate the reward literature. The first stream,
conducted by self-determination theorists in psychology, focuses on the detrimental effect of different
types of external rewards on an individual’s intrinsic motivation (for a review of these studies, see Deci et al.,
1999). Experimental results in this stream indicate that external rewards, especially in the form of
performance-contingent rewards, can produce an undermining effect (Deci & Ryan, 1980) on intrinsic
motivation; as several researchers have argued (Pinder, 1976; Salancik, 1975), this was implicitly or
explicitly interpreted by many authors as detrimental to motivation toward a task and hence performance
(Gneezy & Rustichini, 20001). In fact, as a recent review suggests, relatively little psychological research has
focused on the direct relationship between performance-contingent pay and performance in work settings,
mainly due to the dominant role of cognitive evaluation theory (CET) and other undermining theories in
the psychology literature (Koslowski, 2012; Rynes, Gerhart, & Parks, 2005).
The second stream of research, which has been conducted mostly by behavioral psychologists
(Scott, 1976) and economists (e.g., Alchian & Demsetz, 1972; Fama & Jensen, 1983), is concerned
with the effect of external rewards on performance. These studies indicate that performance-
contingent rewards improve performance, and the positive effect of performance-contingent rewards
on performance found in these studies was extended to the conclusion that external rewards improve
motivation, through which performance improves (Ariely, Gneezy, Loewenstein, & Mazar, 2009;
Frey & Jegen, 2001). Intrinsic motivation is implicitly assumed to be a constant or is completely
absent in these studies.
HUMAN PERFORMANCE 3
Although these two streams of research seem to produce contradictory results, they are not
completely congruent: Studies in the first stream focus mostly on the effect of external reward on
intrinsic motivation, with an implied relationship to performance, whereas studies in the second
stream focus on the effect of external reward on performance and imply that this effect occurs due to
internal motivation (see Figure 1 for a schematic comparison of the streams). Thus, a limitation of
previous studies in both streams is that they have not successfully tested the separate effects of
performance-contingent rewards and of intrinsic motivation on overall motivation and performance.
We define overall motivation as the sum of extrinsic and intrinsic motivation that produces a total
motivation to accomplish a task.
Another limitation of many studies of the undermining effect (e.g., Deci, 1971; Lepper et al., 1973) is
that rewards were administered in a highly salient way. Reward salience can have a significant negative
impact on motivation and performance because individuals might attribute their motivation to the
reward rather than to the task itself and feel demotivated when the reward is excluded (Ross, 1975). A
further difficulty with past studies is the operationalization of intrinsic motivation. Previous studies have
used mostly self-reports of interest and free-choice behavior as measures of intrinsic motivation. Each of
Cognitive evaluation theory (CET)
Performance- (–) (–)

contingent external Intrinsic motivation Performance
rewards
Behavioral psychology and economics
Performance- (+)
contingent external Performance
reward
(+) (+)
Motivation
Current study
(+)
Performance-
contingent external Overall motivation
reward (+)
(+) (+)
(+)
Intrinsic motivation Performance
(?)
(?)
Intrinsic motivation x
Fig. 1performance-
contingent external
reward
Figure 1. Schematic diagram of the relationship between constructs in previous studies and current study. Note. Bold arrow
indicates tested relationship; dashed arrow indicates implied relationship; question mark indicates that there is a conflict between
the two theoretical streams.
4 HENDIJANI ET AL.
these has some issues, which we discuss in the upcoming Limitations section. To resolve these difficulties,
we used participants’ self-selection into an area of knowledge—their academic major—as a measure of
intrinsic motivation. The use of a self-selection measure of intrinsic motivation addresses one of the main
drawbacks of experimental research: the applicability of experimental results to “real” people working in
the “real” world and receiving “real” incentives (cf. Harrison & List, 2004).
In the next section, we review the related literature in more detail. We then discuss our measure
of intrinsic motivation, developing hypotheses and an experiment that addresses the deficiencies of
prior studies. We then present our experimental results and put forward some conclusions and
proposals for future work.
External reward and intrinsic motivation in the literature

Self-determination theory (SDT; Ryan & Deci, 2000) states that different types of motivation can be
distinguished based on the reasons or goals that give rise to an action. The most basic distinction is
between intrinsic motivation and extrinsic motivation (external reward). Intrinsic motivation refers to
performing an activity for its innate interest to experience pleasure and satisfaction inherent in the
activity. Intrinsically motivated activities are enjoyable and purposeful in nature and are pursued for
inherent reasons rather than as a separable object of value (Pink, 2011). On the other hand, extrinsic
motivation involves engaging in an activity for external reasons, such as achieving separable desired
outcomes (e.g., rewards) or avoiding undesired outcomes (e.g., punishments; Ryan & Deci, 2000).
Rewards are one of the main categories of extrinsic motivators. They can be categorized based on
whether they are expected while a person is doing the task and, if so, on what specific behaviors they are
dependent (Ryan, Mims, & Koestner, 1983). Such reward contingencies play an important role in the effect
of external reward on intrinsic motivation and performance (Deci et al., 1999). Performance-contingent
rewards are interpreted as rewards that are based on performance. For example, they can be given for
performing up to or above a specified level of performance, a standard, or some specific criterion (e.g. doing
better than 80% of the other participants; Ryan et al., 1983).
As previously described, there are two contrasting streams in the literature that have attempted to
explain the relationship among rewards, motivation, and performance. The first stream of experimental
studies, mostly in social psychology, examines the predictions of CET and other related theories
regarding the undermining effect of external reward on intrinsic motivation. According to CET, external
rewards tend to engender an external perceived locus of causality for the task, so that individuals perceive
their actions as controlled by the external contingency without a sense of autonomy or choice for doing
the task (Deci, 1972a, 1972b, 1971; Hagger & Chatzisarantis, 2011). Among different types of rewards,
CET specifically asserts that performance-contingent monetary rewards may undermine intrinsic
motivation by making the controlling aspect of the external reward more salient. However, they can
convey positive information about the individual’s level of competence as well, and the competence-
affirmative aspect of these rewards can offset some of the negative effects on intrinsic motivation.
Therefore, according to CET, the effect of performance-contingent rewards on intrinsic motivation
depends on the salience of the controlling and competence-affirmation aspects of these rewards.
Financial reward is the independent variable and intrinsic motivation the dependent variable in these
studies.
The aggregate results of Deci et al.’s (1999) meta-analysis provided support for the undermining
effect of performance-contingent rewards on intrinsic motivation, leading to the conclusion that
performance-contingent rewards are more controlling rather than competence-affirming in general.
Considering the results of this meta-analysis, Deci et al. concluded that monetary rewards and, in
particular, performance-contingent ones undermine intrinsic motivation by controlling people’s
behavior and forestalling their responsibility for motivating themselves (Deci et al., 1999).
Later, Deci and his colleagues proposed SDT as a more complete formulation for the effect of
different types of external factors on motivation and performance (Deci & Ryan, 2000, 2002). In
contrast to CET, SDT provides a detailed description of the effect of different environmental factors
HUMAN PERFORMANCE 5
on self-determination motives. SDT also proposes that the motive for self-determination can be
satisfied in environments that include special types of extrinsic motivation. In addition, SDT
organizes different motivational conditions along a continuum starting from pure extrinsic motiva-
tion in the form of external reward at the lowest level toward pure intrinsic motivation at the highest
level of the continuum. Although SDT’s purpose is to present a wider framework of social and
environmental factors that facilitate or undermine intrinsic motivation, it holds a similar view about
the effect of external reward on intrinsic motivation; like CET, SDT asserts that tangible external
rewards diminish intrinsic motivation. Therefore, in this article, we focus both on CET as a
subtheory of SDT and on its widely discussed view on the undermining effect of external rewards
on intrinsic motivation and performance (Ryan & Deci, 2000). Overjustification theory provides
another explanation regarding the undermining effect based on self-perception theory and self-
attribution mechanism. This theory focuses more on the attribution of the cause of behavior rather
than its true cause.
The second stream of experimental studies, which is in line with standard economic theories and
behavioral theories (Scott, 1976; Skinner, 1953), has mostly attempted to examine the effect of
external reward on performance (for a review of these studies, see Camerer & Hogarth, 1999). As the
most important theories in this category, the expectancy-value theory, agency theory, and reinforce-
ment theory can be mentioned. The independent variable in these studies is contingent reward and
the dependent variable is performance. Intrinsic motivation has neither been included nor oper-
ationalized in these studies. A change in the level of intrinsic motivation is inferred from a change in
the level of performance (e.g. Ariely et al., 2009; Gneezy & Rustichini, 2000).
In addition to these two main theoretical streams, another stream has had a contingency view of
the effect of reward. Based on this theoretical stream, the effect of reward on motivation and
performance is dependent on factors such as the reward’s characteristics (reward salience, reward
timing, or the phase of reward administration), or the reward receiver’s characteristics (type of
mind-set or self-regulatory mechanism). Theories in this category include goal phase theory,
resource allocation theory, mind-set theory, and the theory of fantasy realization.
Goal phase theory distinguishes between the phases of goal choice and goal striving/pursuit (Kanfer,
2012). During the goal choice, the focus is on allocating resources to selecting one goal among different
options. During the goal striving/pursuit, the focus is on implementing steps and selecting the appropriate
self-regulatory mechanisms that are useful in realizing the selected goal. Many factors can influence the goal
choice and goal-striving phases. Goal phase theory is closely linked with mind-set theory, which focuses on
the difference between deliberative and implemental mind-sets that are associated with the goal choice and
goal accomplishment phases, respectively (Gollwitzer, 2012). During the goal choice phase, a deliberative
mind-set is required in order to decide which goal to choose among different options. The presentation of
reward at this phase can increase the desirability of the related goal compared to other options (e.g., doing
nothing or choosing to do other activities during the specific period). During the goal accomplishment
phase, however, an implemental mind-set is required to help with finding strategies to accomplish the
selected goal. At this phase, an implemental mind-set can guide thought toward finding strategies that are
beneficial for the successful completion of the related goal (Armor & Taylor, 2003; Gollwitzer & Kinney,
1989; Taylor & Gollwitzer, 1995; Webb & Sheeran, 2008). Thus, the effect of reward on motivation and
performance depends on the goal phase in which the reward is administered. Rewards can generally have a
positive effect on goal choice where the person tries to choose one goal among different options by
increasing the value of a goal relative to other options. However, the effect depends on the type of incentive
and the extent to which they are linked to performance (e.g., Moussa, 1996; Wright & Kacmar, 1995). In
addition, factors such as personal goals and self-efficacy can mediate the relationship between rewards and
performance (Kanfer et al., 2012; Lee, Locke, & Phan, 1997; Moussa, 2000). They can have a negative effect
during the goal-striving phase, where the emphasis must be on finding strategies that can help in pursuing
the selected goal.
Resource allocation theory posits that human’s mind has a limited capacity. To be able to perform
a task successfully, it is critical to allocate such limited resources to the task rather than any
6 HENDIJANI ET AL.
distracting factors, such as the external reward that is not directly relevant to goal accomplishment
(Kanfer & Ackerman, 1996). During task accomplishment, rewards can deviate thought from the
task toward the reward and lead to motivation and performance decrease. Similar to mind-set theory
perspective, this theory suggests that rewards that are presented or remain salient during the task
accomplishment phase are detrimental to motivation and performance due to distraction effect (Steel
& MacDonnell, 2012).
The theory of fantasy realization focuses on the self-regulatory mechanisms that can help one in
converting their desires to binding goals (Fiske, Gilbert, & Lindzey, 2010; Oettingen, 2000).
Individuals who choose improper self-regulatory mechanisms may indulge in the fantasies related
to receiving the reward instead of finding mental contrasting strategies that can help them in
realizing their goals. This theory differentiates between fantasies (thoughts and images of future
desires or behaviors) and expectancies in the form of mental contrasts that can help in realizing
selected goals (Kanfer et al., 2012; Oettingen, Pak, & Schnetter, 2001).
Limitations of previous studies

Deci et al.’s (1999) meta-analysis is the best available review of the undermining literature, and the results
generally support the main predictions of CET regarding the undermining effect of contingent rewards on
intrinsic motivation. However, these studies have several limitations that require further examination. First,
performance is not reported as a dependent variable in most of these studies. For example, in none of Deci’s
experimental studies are the performance results reported for the experimental task (Calder & Staw, 1975b;
Salancik, 1975). Thus, it is unclear whether any increase or decrease in the level of intrinsic motivation has
actually improved or undermined performance. In fact, it is an underpinning assumption of CET that there
is a positive relationship between intrinsic motivation and performance (Pinder, 1976). Only a few studies
have attempted to examine the real effect of intrinsic motivation on performance (e.g., Calder & Staw,
1975b; Daniel & Esser, 1980; Hamner & Foster, 1975). Examining the effect of external reward on intrinsic
motivation without measuring performance gives only a partial understanding of the relationship between
motivation and performance (Calder & Staw, 1975a).
Second, reward has been highly salient in many of these studies (e.g., Anderson, Manoogian, &
Reznick, 1976; Deci, 1971; Lepper et al., 1973; Loveland & Olley, 1979; McLoyd, 1979; Orlick &
Mosher, 1978). From an attribution theory perspective, individuals are more likely to attribute their
motivation and performance to the external reward rather than intrinsic motivation when the
reward is highly salient. In other words, in the presence of salient rewards, individuals might
perceive themselves to be extrinsically motivated and become less motivated when the reward is
no longer present. Thus, it is possible that the salience of the reward in these studies was the main
reason for the decrease in intrinsic motivation (Cerasoli et al., 2014; Ross, 1975).
Third, experimental studies that have examined the effect of external reward on intrinsic motivation
have used two main measures for intrinsic motivation: self-reports of interest and free-choice behavior.
With self-reporting, interest is measured using several questions concerning the participants’ interest in and
enjoyment of the experimental task. Participants complete the questionnaire after the experimental period.
Self-reports of interest have been used in several studies related to intrinsic motivation (e.g., Deci, Eghrari,
Patrick, & Leone, 1994; Plant & Ryan, 1985; Ryan, 1982; Ryan, Koestner, & Deci, 1991; Ryan et al., 1983). In
contrast, free-choice behavior is a behavioral measure of intrinsic motivation that is often measured by the
amount of time spent on the target task in a free period after the experimental session (e.g., Deci, 1971;
Eisenstein, 1985; Greene & Lepper, 1974). Although these two measures have several advantages, there are
some issues mostly related to the way they are used in previous experiments for assessing intrinsic
motivation.
Self-reports are commonly used for measuring variables in behavioral research (Howard, 1994;
Sacket & Larson, 1990). They are generally acceptable for assessing behavioral characteristics of the
participants. In fact, as many studies have shown, the validity of self-reported measures of different
constructs (i.e., teaching skills, assertiveness, social skill and anxiety, empathy, etc.) is comparable or
HUMAN PERFORMANCE 7
superior to that of their non-self-report counterparts (e.g., behavioral measures, role-plays, signifi-
cant-other reports, expert-judges ratings; Cole, Howard, & Maxwell, 1981; Cole, Lazarick, &
Howard, 1987; Gabbard, Howard, & Dunfee, 1986; Howard, 1994). However, there are two issues
with the use of self-reports as a measure of intrinsic motivation that we address in the current study.
One issue is that in previous studies participants provide self-reports of interest after they have
completed the task, so they are aware of the type of external reward at the time of writing the report.
This may result in a confusion and confounding of the enjoyment of external reward with the
individual’s intrinsic interest in the task (Deci et al., 1999). In other words, self-reports of interest
are, in fact, assessing the overall motivation, which is the sum of both extrinsic and intrinsic
motivations. A second issue is that most studies that use self-reports of interest do not report any
pretreatment measure of intrinsic interest. In a typical experiment, participants take part in a task
assumed by the researcher to be intrinsically motivating—the tasks used in these studies often
included solving SOMA puzzles, the most widely used task in the literature (Deca, 1971, 1972a;
Enzle & Ross, 1978; Williams, 1980); drawing pictures with colored markers (Lepper et al., 1973);
building with erector sets (Kruglanski, Friedman, & Zeevi, 1971; Pinder, 1976); and playing word
games (Weiner, 1980).
To solve these issues related to self-reports of interest, it has been recommended that self-reports
of interest be used in combination with a behavioral measure (i.e., free-choice intrinsic motivation)
for assessing intrinsic motivation (Deci et al., 1999). A free-choice measure uses the amount of time
spent on the task in a free-time period after the experimental session. It solves the confounding of
external reward and intrinsic motivation issue just explained. The foremost problem remaining is
that free-choice behavior considers time spent on the task in the free-time period as the sole
determinant of intrinsic motivation. Although the amount of time can capture the quantitative
dimension of intrinsic motivation, the qualitative dimension of intrinsic motivation (i.e., the interest/
enjoyment toward the task) cannot be captured by the free-choice measure of intrinsic motivation.
The second issue is related to the experimental studies that have used free-choice measure of intrinsic
motivation. No information is provided regarding the individual’s performance during the main
experimental session in many of these studies (e.g., Deci, 1971, 1972a, 1972b). Thus, it is unclear whether
any changes in the time spent on the task in the free-time period are due to a change in intrinsic
motivation or to a change in performance. In other words, the time spent on the task in the free-time
period could be influenced by the individuals’ performance in the experimental session (Calder & Staw,
1975a). Without information on performance, one may argue that the presence of monetary reward
during the main task may encourage participants to increase their motivation and performance during
the experimental session. Therefore, a decrease in the amount of time spent on the task in the free time
period—free-choice behavior—could be attributed to factors such as satiation or fatigue rather than any
changes in the level of intrinsic motivation (Calder & Staw, 1975a).
Although the main studies in both behavioral and cognitive evaluation streams have focused only
on part of the relationship between various motivational factors and performance, a few researchers
have attempted to address these issues by testing the interaction effect of external reward and
intrinsic motivation as independent variables on related dependent variables (e.g., Calder & Staw,
1975b; Salancik, 1975)
In one study, Calder and Staw (1975b) designed an experiment to test the interaction between
completion-contingent external reward and intrinsic motivation by manipulating both intrinsic
motivation and external reward as two independent variables. In this experimental design,
intrinsic motivation and external reward were clearly manipulated, so the design gave the ability
to test the additivity versus the interaction hypotheses between intrinsic motivation and external
reward (Calder & Staw, 1975b). The experimental task included solving 15 jigsaw puzzles. To
manipulate intrinsic motivation, the researchers used the concept of a boring versus an interest-
ing activity. They provided blank puzzles to one group (to induce low intrinsic motivation) and
puzzles with interesting pictures to another group (to induce high intrinsic motivation). External
reward had two categories of no pay versus the completion-contingent pay of $1 for completing
8 HENDIJANI ET AL.
the experimental task. Participants in the payment group received their $1 payment after
completing all 15 jigsaw puzzles. The dependent variables of this study were task satisfaction
and task persistence.
This study is one of the few that attempts to manipulate intrinsic motivation. However, the study
has some methodological issues. First, the type of task used for this study, as in many studies on
intrinsic motivation, is solving puzzles. Puzzle solving is not a good representation of real-world
tasks, especially if the participant is not familiar with puzzle solving prior to the experiment
(Hamner & Foster, 1975). Second, the manipulation check for the independent variable of intrinsic
motivation is done after the task is complete, using after-the-task self-reports of interest, with no
pretreatment measure for intrinsic motivation (Cameron & Pierce, 1994). This type of manipulation
check mixes the effect of reward and intrinsic motivation and, as was just explained, is actually
measuring overall motivation (i.e., the sum of extrinsic and intrinsic motivation) rather than pure
intrinsic motivation. Thus, one cannot determine whether the manipulation for intrinsic motivation
has actually been successful (Deci et al., 1999). Finally, this study does not measure participants’
performance, so the effect of external reward and intrinsic motivation on performance is still unclear
(Calder & Staw, 1975a).
Similar to Calder and Staw (1975b), some other researchers have also attempted to test the
interaction effect of external reward and intrinsic motivation as two manipulated independent
variables on related dependent variables (Pinder, 1976). These studies all have methodological
problems similar to the ones mentioned in Calder and Staw’s (1975b) study.
A new measure for intrinsic motivation

In this study, we use a new measure for intrinsic motivation, which addresses some of the issues
related to previous measures of intrinsic motivation. We match, or mismatch, participants’ field of
study in a university setting with the topic of a test in which they will participate. In high intrinsic
motivation treatments, students who are math majors (literature majors) were randomly assigned to
take a mathematics (English) test, which we call match treatments. In low intrinsic motivation
treatments, students who are math majors (literature majors) were randomly assigned to take an
English (mathematics) test, which we call mismatch treatments.
Although other factors including native and personal ability, need for less effort, job availability, and
social pressures may also affect an individual’s self-selection into a field of study (Zhang, 2007), we
presume that intrinsic interest has a significant effect on self-selection. Indeed, research on the selection
of major field of study at a university has found that students’ selection of their majors is influenced by
their genuine interest in the field (Adams, Pryor, & Adams, 1994; Malgwi, Howe, & Burnaby, 2005;
Zhang, 2007). In accordance with this line of research, we used major selection as a measure for intrinsic
motivation. In other words, we assume that individuals whose field of study matches the type of the test
in which they will take part have high intrinsic motivation toward the test (high intrinsic motivation
group). On the other hand, individuals whose field of study mismatches the type of the test in which they
will take part have low intrinsic motivation toward the test (low intrinsic motivation group). We did a
manipulation check later to check whether our assumption regarding the positive relationship between
field of study and intrinsic motivation is supported in our sample.
This measure of intrinsic motivation has several advantages in comparison with previous mea-
sures. First, it is based on a more realistic task type than the interesting/boring puzzles used in
previous studies of intrinsic motivation; experiment participants take part in a task that is familiar to
them and is based to a greater or lesser degree on their proven real interests over the long run. The
use of self-selection measure creates an environment that is more similar to field settings. In previous
experiments of intrinsic motivation, participants were generally locked into the experimental task
and their performance was not generalizable to real-world tasks. This experiment is similar to
nonlaboratory settings in the sense that individuals are sorted and assigned to conditions based on
their preferences and skills in their real life. Experiments that are not based on sorting describe the
HUMAN PERFORMANCE 9
preferences and behaviors of average individuals rather than the marginal ones whose behavior
predicts performance outcomes in the real world (Erikson & Villeval, 2004; Lazear, Malmendier, &
Weber, 2012). Second, we perform the manipulation check at the beginning of the experiment, not
the end, to see how well the field of study indicated intrinsic interest in the test type. Therefore, the
manipulation check results do not confound intrinsic interest towards the task with the enjoyment of
monetary reward.
Research hypotheses
In this section, we explain the research hypotheses regarding the effect of external reward and
intrinsic motivation on overall motivation and performance. The hypotheses are developed and
explained based on the predictions of the two opposing research streams regarding the effect of
external reward and intrinsic motivation. The flow diagram of our research model is displayed at the
bottom of Figure 1.
The effect of performance-contingent external reward on overall motivation and

performance
Most behavioral theories of motivation, including reinforcement theory (Skinner, 1953), agency theory,
and expectancy-value theory (Vroom, 1964), suggest that performance-contingent rewards have a positive
effect on overall motivation and performance. Based on expectancy-value theories, motivation toward a
task is the result of effort-outcome expectancy (i.e., the perceived probability of success) and the valence or
desirability of the outcome (i.e., the attractiveness of the outcome). External rewards can improve overall
motivation and performance by enhancing the subjective probability of success (i.e., rising expectancy;
Riedel, Nebeker, & Cooper, 1988; Wright & Kacmar, 1995) and by increasing the valence or desirability of
the goal upon which the reward is contingent. From the reinforcement theory perspective, rewards can
control behavior and can be used to influence behavior in a specific direction (Fiske et al., 2010; Skinner,
1953). Based on agency theory, individuals are self-interested, rational, and utility-maximizing. They are
unwilling to exert effort for a goal that does not contribute to their economic well-being. Therefore,
individuals choose and pursue goals that maximize their utility. Performance-contingent rewards increase
individuals’ utilities and are more desirable compared to no reward or noncontingent reward conditions.
Experimental studies and aggregate results of meta-analytical reviews have supported these theories by
finding a positive relationship between external reward and different measures of performance (Byron &
Khazanchi, 2012; Eisenberger & Aselage, 2009; Garbers & Konradt, 2014). Therefore, we can make the
following hypotheses regarding the effect of performance-contingent external reward on overall motivation
and performance:
H1: Performance-contingent external reward improves overall motivation.
H2: Performance-contingent external reward improves performance.
The effect of intrinsic motivation on overall motivation and performance

The relationship between intrinsic motivation and performance has not been clearly addressed by
researchers. This is due to the reliance on the implied assumption made by cognitive psychologists
that intrinsic motivation is an inherent interest toward task accomplishment, and as a result it will
automatically improve overall motivation and performance (Ryan & Deci, 2000). In line with this
implied assumption, we hypothesize the following:
H3: Intrinsic motivation improves overall motivation.

10 HENDIJANI ET AL.
H4: Intrinsic motivation improves performance.
The effect of intrinsic motivation × external reward interaction on overall motivation and
performance
There are two sets of competing hypotheses regarding the interaction effect of external reward and
intrinsic motivation on overall task motivation and performance from the additive and undermining
theories’ perspective. Consistent with additive theories of motivation such as reinforcement theory
and expectancy theory, the effects of intrinsic motivation and external reward are additive. In other
words, external reward and intrinsic motivation influence overall motivation and performance
through two different processes that produce no interaction with each other. Thus, this stream
predicts no interaction between external reward and intrinsic motivation.
H5: Performance-contingent external reward and intrinsic motivation have an additive affect on
overall motivation.
H6: Performance-contingent external reward and intrinsic motivation have an additive affect on
performance.
From the undermining effect theories’ perspective, however, intrinsic motivation and external
reward interact in a negative way. In other words, in the presence of high levels of intrinsic
motivation, rewards undermine intrinsic motivation, resulting in a decrement in overall motivation
and performance; in the absence of high intrinsic motivation, rewards improve motivation towards
the task, resulting in an increase in overall motivation and performance.
H7a: External reward decreases overall motivation for individuals with high levels of intrinsic
motivation, and increases overall motivation for individuals with low levels of intrinsic motivation.
H7b: External reward decreases performance for individuals with high levels of intrinsic motivation,
and increases performance for individuals with low levels of intrinsic motivation.
H5 and H6 predict results that are in contrast with H7a and H7b. Although H5 and H6 predict an
additive relationship between intrinsic motivation and external reward based on behavioral theories
of motivation, H7a and H7b predict that external reward will interact with intrinsic motivation,
resulting in reduced overall motivation and performance. We included hypotheses related to the
separate and interaction effects of external reward and intrinsic motivation. This was due to the
discrepancy between the two research streams explained earlier. From the behavioral theories’
perspective, external reward and intrinsic motivation are additive and have no interaction with
each other (separate effects). From the undermining theories’ perspective, the two types of motiva-
tion are interactive and undermine each other (interaction effect). To test these two sets of
contrasting predictions, we developed two sets of hypotheses to test both the separate effects of
external reward and intrinsic motivation and their interaction on overall motivation and
performance.
The mediating effect of overall motivation

Both the additive and undermining effect theories suggest that different types of motivation
(including intrinsic and extrinsic motivations) influence performance through their effect on overall
motivation. Thus, we developed the following hypothesis:
HUMAN PERFORMANCE 11
H8: Overall motivation mediates the effect of both external reward and intrinsic motivation on
performance.
Experiment participants and procedure

To test our hypotheses, we performed an experiment. Students at a medium-sized university (n = 187; 99
male, 88 female) in two fields of study (literature-related vs. mathematics-related) were randomly assigned
to the treatments of a 2 (intrinsic motivation: matched vs. mismatched topic of test) × 2 (external reward:
piece rate vs. fixed payment) between-subjects factorial design. Mathematics-related departments included
mathematics and statistics, electrical engineering, mechanical engineering, chemical and petroleum engi-
neering, computer engineering and computer science, geomatics engineering and civil engineering;
literature-related departments included art, dance, and drama; English; French, Italian, and Spanish;
Germanic, Slavic, and East Asian studies; Greek and Roman Studies; archeology; history; and philosophy.
To determine how well this measure for intrinsic motivation had worked, prior to the test participants were
asked several questions regarding their intrinsic interest toward mathematics or English language. In
particular, the participants were asked to indicate (a) their general interest toward mathematics/English
language and (b) their interest in solving math problems and answering general English-related questions.
These questions provided a self-reported measure of individuals’ intrinsic interest toward mathematics/
English language. Following Calder and Staw (1975a), we also obtained a behavioral measure of partici-
pants’ intrinsic interest toward a math/English test. To get this measure, participants were asked whether
they would choose to solve math problems or answer English questions as a more enjoyable task. To find
out whether interest played a significant role in major selection, participants were asked to select the reasons
for their field selection. The questions had several response items, including level of interest toward math/
English language, parents’ pressure, friends and relatives’ suggestion, and the availability of job opportu-
nities related to the selected field of study. Participants were asked to choose as many items as they liked and
applied to them. In addition to the questions related to manipulation check, participants also answered one
question regarding their level of confidence. Confidence was measured to examine the possibility of an
effect of the intrinsic motivation measure on the confidence of participants, particularly compared across
the matched and mismatched treatments.
After answering these questions, participants took an online test on the university’s standard course
management system consisting of questions in either mathematics or English. Using the course manage-
ment system allowed automatic grading by the system immediately after the test was submitted. Each test
consisted of 30 multiple-choice questions with one definite correct answer per question. Questions were
selected from the Graduate Management Admission Test (Graduate Management Admission Council,
2009). Students were given 50 min to answer these questions.
Finally, all participants completed a set of questions regarding their overall motivation (i.e., self-report of
interest/enjoyment), as well as demographic questions concerning their knowledge, age, gender, ethnicity,
and primary language. After completing the experiment, participants were guided to a separate room to
receive their payment and the feedback regarding their performance in the test they had completed.
Participants in the fixed payment treatments received $15 as their participation fee, which was not
contingent on their performance in the test. Participants in the piece-rate payment treatment received a
performance-contingent reward based on their performance ($0.50 per correctly answered question) in
addition to their $15 participation fee. Participants in the contingent pay treatment received an additional
payment of $15 on average based on the number of correctly answered questions. The differential payment
between the two conditions (i.e., piece-rate vs. fixed rate conditions) is consistent with the purpose of the
study, which was examining the effect of an additional performance-contingent pay on motivation and
performance compared to a baseline condition. To avoid making the controlling or competence-affirma-
tive aspects of the reward salient (Deci et al., 1999), no performance feedback was provided to the
participants during the experimental session. In addition, rewards were administered in a nonsalient
way; participants were informed of the reward contingencies at the beginning of the experiment as part
12 HENDIJANI ET AL.
of the written consent form. As was mentioned in the Introduction section, reward salience can have a
significant negative effect on the relationship between reward, motivation, and performance (Ross, 1975).
Variables
The study’s two dependent variables were performance and overall motivation. Performance was
measured by the number of correctly answered questions. Overall motivation was measured by two
measures: the amount of time spent on the test (i.e., the behavioral measure) and self-reports of
interest/enjoyment. Time spent on the task captures the quantitative aspect, and the self-report of
interest captures the qualitative of aspect of overall motivation. Self-reports of interest consisted of four
items selected from the Intrinsic Motivation Inventory (“1. I enjoyed taking the test very much, 2. I
thought this was a boring test, 3. I would describe this activity as very interesting, 4. I thought this
activity was quite enjoyable”; Ryan et al., 1983; Ryan et al., 1991; Ryan, Connell, & Plant, 1990;).
Participants answered each of these questions on a 7-point Likert scale, immediately after the experi-
mental session.
It is important to note that these measures capture both the extrinsic and intrinsic aspects of
motivation. The behavioral measure is collected during the main experimental session. Because the
reward is present at this time, the measure is influenced by both external reward and intrinsic
motivation. In other words, individuals are motivated by both the external reward and intrinsic
motivation. Thus, the behavioral measure assesses the combination of the two. Similarly, the self-
reported measure is collected right after the experiment. At this time, participants are aware of both
their level of intrinsic interest toward the task and the external reward that was associated with the
task they had accomplished. Thus, their indicated motivation is a combination of the enjoyment of
external reward and their intrinsic interest toward the task (Deci et al., 1999).
Later, we combined these two measures and created a composite measure for overall motivation.
To combine the behavioral and self-reported measures of interest, we first converted each variable to
a percentage variable by dividing the value by the maximum and then took the average of the two
measures. For the behavioral measure, the amount of time spent on the task by each participant was
divided by the total time (50 min). Similarly, for self-reports of interest, the participant’s score was
divided by 7 (the maximum rate in the scale). Finally, we used the average of these two measures as a
composite measure for overall motivation. The composite measure was created to be able to capture
both the quantitative (i.e., time spent on the task) and qualitative (i.e., interest/enjoyment) aspect of
overall motivation. However, combining the two measures is acceptable only if the two measures are
assessing the same construct (i.e., overall motivation). To address this issue, we conducted a
principal component analysis, which is explained in the Results section.
In addition to the primary measures of interest, we also gathered information on knowledge and
confidence as the variables that may be affected by our operationalization and rule out the confounding of
our results on the effect of intrinsic motivation on performance with knowledge and confidence effects.
First, there is a possibility that the operationalization of intrinsic motivation affected individuals’ level of
confidence, which in turn might influence performance. To check for this possibility, we asked all
participants to indicate their confidence level prior to the mathematics/English test using one item
(“Please indicate how confident you are that you will perform well in this test” from 1 [not at all] to
7 [very much]). Second, because our measure for intrinsic motivation is based on the match or mismatch
between field of study and test type, participants in different treatments may have heterogeneous levels of
knowledge regarding the topic of the test in which they will take part. Knowledge, in turn, might influence
performance on the test. To check the effect of knowledge on performance in the test, we controlled for
knowledge by measuring the number of math and English courses that the participants had completed in
the university. We allowed the subjects their own interpretation because in math-related majors, students
would be taking many math-related courses and non–math majors would be reading literature, so the
responses to either a question that was restricted to only math and English Department courses would be
highly positively correlated with questions that were not restrictive. As other control variables, field of
study (math-related = 1, English-related = 0), EnglishFirst (if English was the first language, this variable
was equal to 1, otherwise equal to 0), PureGuess (the percentage of answers that the participant stated
were based on pure guessing), and UnderGrad (whether the participant stated that he or she was an
undergraduate or graduate student) were also included in our model.
Following Cohen, Cohen, West, and Aiken (2013), we contrast coded our independent variables
of intrinsic motivation and external reward. Contrast coding is most appropriate for the type of
research hypotheses in which both the main effects and interaction are included in the model. We
coded participants as +0.5 in the high intrinsic motivation treatment and as −0.5 in the low intrinsic
motivation treatment. In addition, we coded participants in the piece-rate treatment as +0.5 and
participants in the fixed pay treatment as −0.5. The interaction between intrinsic motivation and
external reward is the product of these codes. Contrast codes are useful for interactions of categorical
variables because they are orthogonal and make the results of regression analysis easier to interpret,
compared to dummy variable coding (Cohen et al., 2013).
To see whether the measure for intrinsic motivation was successful, participants answered on a 7-point
scale from 1 (not at all) to 7 (very much) four interest-related questions: (a) “How interested are you in
solving general mathematics problems?” (b) “How interested are you in answering English questions?” (c)
“How interesting is mathematics to you in general?” and (d) “How interesting is English to you in
general?” We then restructured the data into a single variable called Interest and ran a multiple regression
analysis on the effect of field of study on Interest while controlling for other covariates including
confidence, knowledge, field, and EnglishFirst. The results show that our measure for intrinsic motivation
worked; there is a significant effect of field of study (literature-related = 0, math-related = 1) on interest
(β = .475, p < .01), supporting our model assumptions regarding the positive link between field of study
and interest. Participants in the math-related/literature-related fields had significantly higher interest
toward mathematics/English language compared to the participants in the other field of study. In
addition, a highly significant number of participants in the math-related fields of study chose solving
math problems as a more enjoyable task to complete compared to answering English questions (β = .495,
p < .001). Finally, approximately 79% of the participants selected interest in math/English language as one
of the main reasons for their field selection in math-related or English-related fields of study.
Data analysis
To test our hypotheses, we build our model from simple models (i.e., separate multiple
regression models) to more complex models (i.e., moderated mediation model; cf. Hayes,
2009). In Models 1 and 2, we examine the direct effect of external reward and intrinsic
motivation on overall motivation and performance using ordinary least squares regressions.
Models 1 and 2 address H1 to H3. In Model 3, we use moderated mediation model developed
by Preacher, Rucker, and Hayes (2007) to test the indirect effect of the interaction effect of
external reward and intrinsic motivation on performance via overall motivation. Moderated
mediation model has the ability to test whether the effect of a simple mediation (e.g., the effect
of intrinsic motivation/external reward on performance through overall motivation) is mod-
erated by a second variable (e.g., external reward/intrinsic motivation; Preacher et al., 2007).
This is of critical importance in testing our research hypotheses, which are built upon two
research streams with competing hypotheses regarding the effect of external reward and
intrinsic motivation on overall motivation and performance. From the additive theories
perspective, the two types of motivation (i.e., external reward and intrinsic motivation) are
additive and have no interaction with each other. From the undermining theory perspective,
however, the two types of motivation have a crossover interaction with each other, resulting in
a decrement in overall motivation and performance. Thus, moderated mediation is a suitable
model for testing our competing research hypotheses on the interaction between research
variables. In addition, because we mean centered the two independent variables, we are able
to test main effects and interactions between variables in one single model in a meaningful and
14 HENDIJANI ET AL.
interpretable way. Mean centering is important when the purpose of analysis is to test both the
unconditional effects and conditional effects of variables in a statistical analysis model (Aiken
& West, 1991; Cohen et al., 2013; Hayes, 2013; Preacher et al., 2007).
Results
Descriptive statistics and correlations
The total number of participants in the study was 187, but due to missing data there were 184
complete responses. The percentage of male respondents was 53%. There was not a significant
difference in the number of female and male participants in different treatment conditions. Table 1
provides the descriptive statistics of demographics categorized at different levels of independent
variables.
Tables 2 and 3 provide descriptive statistics and correlations between the main study vari-
ables. We provided information related to behavioral, self-report, and composite measures of
intrinsic motivation in Tables 2 and 3. There is a high correlation between the behavioral and
self-reported measures of overall motivation (r = .25, p < .001). In addition, there is a high
correlation between the three measures of overall motivation and performance. We also calcu-
lated the correlations between the composite measure of overall motivation and performance in
high intrinsic motivation (.39, p < .001), low intrinsic motivation (.22, p < .05), high external
reward (.45, p < .001), and low external reward (.29, p < .01) conditions. There is a higher
correlation between overall motivation and performance in the high external reward condition
compared to the low external reward condition. In addition, there is a higher correlation
between the overall motivation and performance in the high intrinsic motivation compared to
the low intrinsic motivation condition.
Principal component analysis

To examine whether the combining of the behavioral and self-report measures into a single measure
was acceptable, we ran a principal component analysis. Only one component was extracted. The
Eigenvalue for the first component was 1.25 (> 1) and for the second one was 0.75 (< 1). In addition,
the first component accounted for 62.49% of the variance, whereas the second component accounted
for only 37.51% of the variance. These results suggest that the two measures tapped into the broader
Table 1. Descriptive statistics for treatment demographics.

Age Gender (Male = 1) EnglishFirst Field Total
HighInt 21.98 (4.45) 0.51 (0.50) 0.48 (0.50) 0.53 (0.50) 97
LowInt 20.68 (2.57) 0.54 (0.50) 0.50 (0.50) 0.55 (0.50) 90
PieceRate 21.55 (4.45) 0.53 (0.50) 0.47 (0.50) 0.56 (0.50) 93
FlatRate 21.17 (2.84) 0.53 (0.50) 0.51 (0.50) 0.52 (0.50) 94
Total 21.36 (3.72) 0.53 (0.50) 0.49 (0.50) 0.54 (0.50) 187
Valid N 186 187 187 187 187
Note. The mean (standard deviation) is shown for the four treatment conditions and for the whole sample.
Table 2. Descriptive statistics for study variables.

N Min Max M SD
Performance 187 0 30 18.37 5.95
Overall (BehMotiv) 187 2 50 36.35 10.33
Overall (Self-report) 187 1 7 4.03 1.44
Overall (Composite) 187 0.09 1.09 0.65 0.16
IntMotiv 187 −0.5 0.5 0.002 0.50
ExtRew 187 −0.5 0.5 0.002 0.50
Table 3. Pearson’s correlations between main variables.

1 2 3 4 5 6
1 Performance __
2 Overall (BehMotiv) 0.19** __
(0.009)
3 Overall (Self-report) 0.38*** 0.25*** __
(0.000) (0.001)
4 Overall (Composite) 0.38*** 0.79*** 0.79*** __
(0.000) (0.000) (0.000)
5 IntMotiv 0.47*** 0.01 0.32*** 0.21** __
(0.000) (0.918) (0.000) (0.004)
6 ExtRew 0.06 0.24*** 0.04 0.18** −0.05 __
(0.389) (0.001) (0.570) (0.016) (0.514)
Note. Values in parentheses are the significance level of each variable included in the model.
*Significant at .05. **Significant at .01. ***Significant at .001.
construct of “overall motivation.” The components matrix results also show that the loadings for
both measures were 79%. Thus, there was a strong correlation between the two measures and the
underlying construct of overall motivation. These results suggest that combining these two measures
is acceptable. Therefore, in later analyses we use the composite measure as the measure of overall
motivation that captures both quantitative and qualitative aspects of overall motivation.
Primary analyses
We conducted a power analysis both prior to and after the experiment using GPower software to
estimate the required sample size and to examine the power in our collected sample. The a priori
analysis showed that a sample of 190 people can give a power of 80% for a small effect size. The post
hoc analysis showed that we had approximately 75% power to reject the null hypothesis related to
the effect of external reward and a power of 99% to reject the null hypothesis related to the effect of
intrinsic motivation using linear multiple regression models. In addition, we tested our mediation
hypotheses using a bias-corrected bootstrapping technique. Compared to other techniques used for
testing moderation and mediation, this method has high power to detect indirect effects and is
recommended to be used in small- to medium-sized samples (Fritz & MacKinnon, 2007; Shrout &
Bolger, 2002).
Table 4 illustrates the results of the three multiple regression analyses that were run to test the
effect of external reward and intrinsic motivation on performance. As shown in the table, the overall
F statistics for all three models were significant. Model 1 includes only the control variables. The
results of this regression indicate that the covariate Confidence (β = 1.228, p < .001) had a significant
positive effect on performance. This result is consistent with the predictions of social cognitive
theory regarding the relationship between self-efficacy and performance (Bandura, 1997). Based on
this theory, self-efficacy (i.e., self-confidence) can have a positive effect on performance through
mechanisms such as exerting more effort, increasing perseverance in face of difficulties, and setting
of higher level goals by the individual (Bandura, 1991a, 1991b; Locke & Latham, 1990). Another
significant covariate was PureGuess, defined as the percentage of answers that were based on pure
guessing (β = −0.09, p < .001). At the end of the experimental session, participants were asked the
question, “What percentage of your answers were based on pure guessing?” Adding this variable in
the model can control for the effect of randomly responding to the items instead of exerting effort
for improving performance. This result was theoretically sound; as participants answered questions
based on pure guessing instead of answering based on knowledge or calculation, their performance
decreased. Note that Knowledge did not have a significant effect on performance (β = 0.164,
p = .134), ruling out the possibility that participants’ knowledge rather than their intrinsic motiva-
tion could be the main predictor of variation in performance. The insignificant effect of knowledge
on performance can be due to the fact that the tests required only a basic knowledge of math and
16 HENDIJANI ET AL.
Table 4. Multiple regression results concerning performance.

Dependent variable: Performance
Model 1 Model 2 Model 3
(Constant) 10.616*** 13.484 13.140***
(0.000) (0.000) (0.000)
Confidence 1.227*** 0.782** 0.866**
(0.000) (0.004) (0.002)
Knowledge 0.172 0.045 0.032
(0.117) (0.669) (0.759)
PureGuess −0.09*** −0.085*** −0.084***
(0.000) (0.000) (0.000)
Age 0.057 0.028 0.014
0.564 (0.764) (0.876)
Gender 0.493 0.645 0.701
0.512 (0.393) (0.321)
EnglishFirst −0.020 0.186 0.280
0.979 (0.796) (0.696)
UnderGrad 0.803 0.534 0.758
(0.361) (0.520) (0.366)
Field 2.555*** 2.827*** 2.873***
(0.001) (0.000) (0.000)
IntMotiv 3.614*** 3.552***

(0.000) (0.000)
ExtRew 1.402* 1.423*
(0.037) (0.034)
IntMotiv × ExtRew 2.350
(0.088)
R2 (%) 39.0 46.6 47.5
Adjusted R2 36.3 43.6 44.2
F statistic 14.091*** 15.210*** 14.248***
p value .000 .000 .000
N 184 184 184
Note. We have provided the unstandardized regression coefficients for each variable. Values in parentheses are the significance
level of each variable included in the model.
English language, in line with the purpose of the study. The test questions were reviewed by the
researchers to make sure that a basic knowledge would be sufficient for answering the questions in
order to minimize the confounding effect of knowledge on motivation and performance, which
could neutralize or remove the effects of intrinsic motivation and external rewards.
In Model 2, we added the two independent variables of IntMotiv and ExtRew to the first model. Both
intrinsic motivation (β = 3.659, p < .01) and external reward (β = 1.379, p < .05) significantly improved
performance, supporting H2 and H4 regarding the positive effect of intrinsic motivation and performance-
contingent monetary rewards on performance.
In Model 3, we added the interaction between intrinsic motivation and external reward to our model.
The multiple regression analysis did not find a significant effect of the intrinsic motivation–external reward
interaction on performance (β = 2.156, p = .113). Therefore, H5 is supported and H7b is rejected. This
result is consistent with the predictions of behavioral theories of motivation regarding the additive effect of
external reward and intrinsic motivation on performance, ruling out the prediction of undermining
theories of motivation. Figure 2 shows the pattern of effects for external reward and intrinsic motivation
on performance in the four treatment conditions.
To test the hypotheses regarding the effect of external reward and intrinsic motivation on overall
motivation, we ran multiple regressions with overall motivation, as the dependent variable. Table 5
illustrates the results of the multiple regression analyses. As with the performance-related models,
Model 1 contains the covariates only, Model 2 adds the independent variables of IntMotiv and
ExtRew, and Model 3 includes the interaction term. The overall F statistic for the three models was
significant. The results of Model 2 indicate that both external reward (β = 0.06, p < .05) and intrinsic
Figure 2. The affect of external reward and intrinsic motivation on performance.
motivation (β = 0.052, p < .05) improved overall task motivation. Therefore, H1 and H3 on the
positive effect of external reward and intrinsic motivation on overall motivation are supported.
Consistent with behavioral theories’ prediction, performance-contingent rewards improved overall
motivation. Consistent with CET perspective, intrinsic motivation improved overall motivation. In
Model 3, the interaction between external reward and intrinsic motivation was added. The interac-
tion was not significant. Intrinsic motivation and external reward remained significant in Model 3,
indicating that the significance of external reward and intrinsic motivation was not related to their
interaction. Therefore, H6 is supported and H7a is rejected. This result is consistent with the
behavioral theories of motivation, which claim that external reward and intrinsic motivation are
additive and have no interaction with each other. It is in contrast with CET, which indicates that
performance-contingent monetary rewards and intrinsic motivation interact with each other and
undermine overall motivation. Figure 3 shows the pattern of effects of external reward and intrinsic
motivation on overall motivation in different treatment conditions.
Moderated mediation test

To test our research hypothesis regarding the mediating effect of overall motivation on the
Intrinsic Motivation × External Reward interaction, we used the moderated mediation analysis
developed by Preacher et al. (2007). This model has several advantages compared to conven-
tional methods for testing mediation and moderation in the literature. First, it allows us to
integrate and conduct moderation and mediation analyses simultaneously, using a unified
statistical test (Hayes, 2015). Second, the method is based on bootstrap confidence intervals.
Other mediation tests (e.g., the Sobel test) are based on the assumption of the normality of the
sampling distribution, which is violated most of the time. Compared to the normal theory
approach, which is highly conservative and may not be able to detect a mediation effect in
small and medium-sized samples, the bootstrap confidence interval has higher power and is
able to detect indirect effects in smaller samples (Fritz & MacKinnon, 2007; Shrout & Bolger,
2002).
18 HENDIJANI ET AL.
Table 5. Multiple regression results concerning overall motivation.

Dependent variable: Overall Motivation
Model 1 Model 2 Model 3
(Constant) 0.428*** 0.469*** 0.467***
(0.000) (0.000) (0.000)
Confidence 0.035*** 0.030* 0.030*
(0.000) (0.02) (0.02)
Knowledge 0.004 0.002 0.002
(0.313) (0.624) (0.645)
PureGuess 0.000 0.000 0.000
(0.356) (0.332) (0.367)
Age 0.002 0.001 0.001
(0.537) (0.702) (0.721)
Gender 0.037 0.043 0.043
(0.142) (0.086) (0.085)
EnglishFirst −0.051* –0.048 –0.048
(0.047) (0.057) (0.058)
UnderGrad –0.048 –0.048 –0.054
(0.102) (0.055) (0.064)
Field 0.039 0.043 0.043
(0.142) (0.096) (0.096)
IntMotiv 0.052* 0.052*

(0.046) (0.049)
ExtRew 0.059* 0.059*
(0.012) (0.012)
IntMotiv × ExtRew 0.012
(0.797)
R2 21.9 25.8 25.8
Adjusted R2 18.4 21.5 21.1
F statistic 6.181*** 6.044*** 5.480***
p value 0.000 0.000 0.000
N 184 184 184
Note. We have provided the unstandardized regression coefficients for each variable. Values in parentheses are the significance
level of each variable included in the model.
We used a moderated mediation model with a bias-corrected bootstrap to create 95%

confidence intervals (5,000 bootstrap samples). In the first model, we defined intrinsic motiva-
tion as the independent variable, overall motivation as the mediator, and external reward as
the moderator. In the second model, we swapped the places of intrinsic motivation and
external reward, so that external reward was the independent variable and intrinsic motivation
the moderator. In both models, related covariates (knowledge, confidence, EnglishFirst, age,
gender, UnderGrad, and PureGuess) were added to control for their effect on performance.
The results of these two analyses indicated that overall motivation mediated the effect of both
intrinsic motivation and external reward on performance, t = 2.129, p < .05, confidence
interval [0.330, 8.719]. These results provide support for H8 regarding the mediation of overall
motivation. Table 6 provides the results of the mediation test for intrinsic motivation and
external reward.
Discussion
In this study, we examined the effect of performance-contingent monetary rewards and intrinsic
motivation on overall motivation and performance, using a new measure for intrinsic motivation
that matched/mismatched the participants’ fields of study with the topic of their test. Our new
measure resolved shortcomings of previous measures of intrinsic motivation, including the con-
founding of intrinsic motivation with monetary rewards in studies using self-reports and free-choice
Figure 3. The affect of external reward and intrinsic motivation on overall motivation.
Table 6. Indirect effects bootstrapping results.

Conditional indirect affect of intrinsic motivation on performance at different levels of external reward:
Mediator External Reward Effect Boot SE Lower CI Upper CI
Overall motivation Low (−0.5) 0.378 0.242 0.034 1.118
Overall motivation High (0.5) 0.419 0.283 0.033 1.242
Conditional indirect affect of external reward on performance at different levels of intrinsic motivation:
Mediator Intrinsic Motivation Effect Boot SE Lower CI Upper CI
Overall motivation Low (−0.5) 0.294 0.202 0.01 0.871
Overall motivation High (0.5) 0.335 0.254 0.022 1.089
behavior for assessing intrinsic motivation. The manipulation check supported our hypotheses that
self-selection into a specific area of knowledge can be used as a measure for intrinsic motivation.
The results of this experiment demonstrated several important findings: First, performance-
contingent monetary rewards positively influenced overall motivation and performance, regardless
of the person’s level of intrinsic motivation. Second, the results of the multiple regression analysis on
the effect of external reward and intrinsic motivation on overall motivation show that both external
reward and intrinsic motivation can improve overall motivation. Our findings have important
implications for research in motivation, as they indicate that performance-contingent rewards can
improve both motivation and performance. Performance improvement is one of the ultimate goals
of any organizational setting; our findings support the widespread use of performance-contingent
rewards as a motivational strategy in applied settings.
However, this study has some limitations: We tested only the effect of a moderate level of
performance-contingent pay—$0.50 per correct answer—on motivation and performance.
Testing other extreme contingent payment levels such as very high and very low payments
can give better insight into the interaction effect of performance-contingent payment and
intrinsic motivation on performance. In subsequent studies, we may change the level of
20 HENDIJANI ET AL.
performance-contingent payment from very low to very high and see how it may affect overall
motivation and performance. When the compensation amount is small, subjects may feel
insulted and decrease their performance as compared to a noncontingent pay condition
(Gneezy & Rustichini, 2000). On the other hand, when the compensation level is too high,
performance may diminish due to the “choking under pressure” phenomenon (Ariely et al.,
2009; Baumeister, 1984). Another limitation is the nature of the task used in this study.
Although the task may be “real world” in academic settings, it is not a primary task in the
business world, and it would be worthwhile to examine research hypotheses using tasks that
are closer to ones that exist in work settings.
Another important factor is the choice of appropriate reward that has the capability of
reinforcing the related behavior. Identifying effective reinforcement from the viewpoint of the
reward recipient is an important issue that has not been clearly addressed in the undermining
literature. Although an intrinsic motivation is a natural component of a task, an extrinsic
reward is usually linked to the task in an arbitrary way without any proper understanding of
its effectiveness as regards reinforcing the related behavior (Madden et al., 2013). In future
studies, we may examine the effect of reward desirability and reward choice on motivation and
performance.
Several other factors may complicate the relationship between reward, motivation, and
performance and have not been addressed in this study. As one contextual factor, reward
salience can be mentioned. The reward was administered in a nonsalient, noncontrolling way
in this study. As previous scholars have suggested, reward salience can significantly decrease
motivation and performance (Ross, 1975). Other contextual factors that may influence the
effect of reward include choice (Patall, Cooper, & Robinson, 2008), the timing of the reward,
or the goal phase in which the reward is administered. We may examine the effect of these
factors in future studies.
In addition to contextual factors, individual differences can also play a significant role on
the effect of rewards on motivation and performance. As Covington and Müeller (2001)
posited, for success-oriented and overstriver individuals (those who are high on approach
dimension in the quadrapolar model of motivation), rewards and intrinsic motivation are
complementary and additive, whereas for the failure avoider and failure-approachers, rewards
either are antagonistic or have no effect on performance. In future studies, we may examine
this perspective by testing the effect of rewards on motivation and performance among people
with different motivational orientations.
Another important issue is related to the conceptualization and measurement of perfor-
mance. As Kanfer et al. (2012) argued, performance is multidimensional and dynamic. In other
words, an individual’s performance on a particular task may vary depending on the context
and time of measurement. Thus, a simultaneous assessment of both within-person and
between-person performance variance can give a better understanding of the underlying
dynamics of motivation and performance. In future studies, we would like to address this
issue by designing experiments that assess both within-person (i.e., measuring each person’s
score on a single behavior in several occasions) and between-person measures of performance.
Finally, our study focuses only on the interaction between a special type of payment scheme,
performance-contingent pay, and intrinsic motivation on motivation and performance.
Therefore, the findings cannot be generalized to the interaction between intrinsic motivation
and external reward on performance for other types of payment, such as completion-contin-
gent and task-noncontingent ones. Using our new measure for intrinsic motivation, in future
studies we can examine the interaction effect of other payment schemes and intrinsic motiva-
tion on motivation and performance.
Note
1. It should be noted that for some levels of performance-contingent external reward, Gneezy and Rustichini
(2000) found an undermining effect, but for other levels they did not.
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Intrinsic motivation, external reward, and their effect on overall motivation

Article in Human Performance · April 2016

Rosa Hendijani Diane Bischak

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Joseph Arvai Subhasish Dugar

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ISSN: 0895-9285 (Print) 1532-7043 (Online) Journal homepage: http://www.tandfonline.com/loi/hhup20

Intrinsic motivation, external reward, and their

Rosa Hendijani, Diane P. Bischak, Joseph Arvai & Subhasish Dugar

To link to this article: http://dx.doi.org/10.1080/08959285.2016.1157595

Published online: 29 Apr 2016.

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Download by: [24.64.80.236] Date: 29 April 2016, At: 11:36

Intrinsic motivation, external reward, and their effect on overall

studies by using a new measure of intrinsic motivation: self-selection into a

CONTACT Rosa Hendijani rosa.hendijani@colorado.edu 995 Regent Dr., Boulder, CO 80302.

rewards showed a reinforcing effect on creative performance, especially when administered in a

Cognitive evaluation theory (CET)

Performance- (–) (–)

Behavioral psychology and economics

External reward and intrinsic motivation in the literature

Limitations of previous studies

A new measure for intrinsic motivation

The effect of performance-contingent external reward on overall motivation and

H1: Performance-contingent external reward improves overall motivation.

H2: Performance-contingent external reward improves performance.

The effect of intrinsic motivation on overall motivation and performance

H3: Intrinsic motivation improves overall motivation.

H4: Intrinsic motivation improves performance.

The mediating effect of overall motivation

Experiment participants and procedure

Principal component analysis

Table 1. Descriptive statistics for treatment demographics.

Table 2. Descriptive statistics for study variables.

Table 3. Pearson’s correlations between main variables.

Table 4. Multiple regression results concerning performance.

IntMotiv 3.614*** 3.552***

Figure 2. The affect of external reward and intrinsic motivation on performance.

Moderated mediation test

Table 5. Multiple regression results concerning overall motivation.

IntMotiv 0.052* 0.052*

We used a moderated mediation model with a bias-corrected bootstrap to create 95%

Table 6. Indirect effects bootstrapping results.

Contemporary Educational Psychology, 25(1), 54–67. doi:10.1006/ceps.1999.1020

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IntMotiv 3.614* 3.552*