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Whether compensation serves as a motivational resource for employees is still a debated subject. It has been suggested that the effect of pay on motivation could be contingent on the satisfaction of the basic psychological needs as outlined by self-determination theory. The current research explored the role of amount of base pay as well as pay fairness discrepancy in relation to basic psychological need satisfaction, autonomous work motivation and, in turn, psychological well-being (i.e., vigor and emotional exhaustion), turnover intentions, and work performance. Managerial need support was also included in the model, so its mechanisms and its effects on the outcomes could be measured against those of pay. Using a combination of archival data and employees' self-reports from 593 Norwegian workers, results revealed that amount of base pay did not predict satisfaction of any of the basic needs, pay fairness discrepancy negatively predicted satisfaction of the needs for autonomy and relatedness and positively predicted satisfaction of the need for competence, whereas managerial need support significantly predicted satisfaction of all three needs. While there was no significant direct relation from amount of base pay to any of the outcomes, results showed a significant direct relation from managerial need support to psychological well-being (positive to vigor and negative to emotional exhaustion) and turnover intentions (negative). There was also a significant direct positive relation from pay fairness discrepancy to turnover intentions., (© 2024 The Author(s). Scandinavian Journal of Psychology published by Scandinavian Psychological Associations and John Wiley & Sons Ltd.)

The link between money and motivation has been a debated topic for decades, especially in work organizations. However, field studies investigating the amount of pay in relation to employee motivation is lacking and there have been calls for empirical studies addressing compensation systems and motivation in the work domain. The purpose of this study was to examine outcomes associated with the amount of pay, and perceived distributive and procedural justice regarding pay in relation to those for perceived managerial need support. Participants were 166 bank employees who also reported on their basic psychological need satisfaction and intrinsic work motivation. SEM-analyses tested a self-determination theory (SDT) model, with satisfaction of the competence and autonomy needs as an intervening variable. The primary findings were that amount of pay and employees' perceived distributive justice regarding their pay were unrelated to employees' need satisfaction and intrinsic work motivation, but procedural justice regarding pay did affect these variables. However, managerial need support was the most important factor for promoting need satisfaction and intrinsic work motivation both directly, indirectly, and as a moderator in the model. Hence, the results of the present organizational field study support earlier laboratory experiments within the SDT framework showing that monetary rewards did not enhance intrinsic motivation. This seems to have profound implications for organizations concerned about motivating their employees., (© 2015 Scandinavian Psychological Associations and John Wiley & Sons Ltd.)