What Matters More for Work Motivation? Compensation or Work Design?

A substantial body of literature has examined the impact of both pay and work design characteristics on workplace outcomes and the quality of motivation but rarely have these predictors been compared. Given that the design of work is naturally related to the design of pay, we examined their relative contributions to explaining variance in work motivation, and, in turn, performance and well-being outcomes. Data from three field studies revealed that work design accounted for more variance in motivation, well-being, adaptive, and proactive performance than pay characteristics. Moreover, variable pay, once controlling for work design, had mostly small but negative relations with employee outcomes, which stands in contrast to previous research findings that have not controlled for work design. Not taking work design into account when studying the effects of pay and extrinsic rewards may lead to erroneous conclusions about how much weight to put on pay as a motivator and could misdirect organizations into putting too many resources into the design of complex compensation systems, instead of paying attention to the design of work.