Motivation and monetary incentives: A closer look

Do higher levels of variable pay reduce salesperson intrinsic motivation? The pattern of findings from past sales management studies is intriguing and may suggest self-determination concepts are applicable. Testing this applicability on a cross-section of industrial salespeople, we found pay plans with higher variable proportions can lead to higher levels of intrinsic motivation. As hypothesized this relationship is stronger for younger salespeople. Younger salespeople may be reacting to the autonomy and competency implications of receiving incentive-based compensation. Results from this sample indicate that a salesperson’s age has both an interactive and direct effect on his or her level of intrinsic motivation.