Performance-Reward Contingencies: The Role and
Relationships of Perceived Equity in the
Job Performance-Job Satisfaction Question
Emmalou V a n Tilburg,
Assistant Professor
Agricultural
Education
The Ohio State University, and
Ohio Cooperative Extension Service
Accepted for Publication November 1987
Most of the research investigating the job performance-job satisfaction relationship has shown only a slight positive relationship
b e t w e e n t h e t w o ( F i s h e r , 1980).
The original hypothesis explored suggested a positive relationship between satisfaction and performance with
satisfaction
affecting
performance
(Brayfield
& Crockett,
1955).
Later
research reversed the hypothesized causality and suggested that performa n c e l e d t o s a t i s f a c t i o n , b u t stil I major I i t e r a t u r e r e v i e w s r e p o r t e d
that the relationships found were slight or non-existent (Lawler, 1973).
O n e s t u d y (Cherrington,
Reitz, & Scott, 19711, based on a model of
s a t i s f a c t i o n p r e s e n t e d b y L a w l e r a n d P o r t e r (1967),
found that an import a n t consideration
when proposing a relationship between performance and
satisfaction was the existence of a performance-contingent reward system.
Only under performance-contingent reward systems would employee
performance
be
positively
related
to
satisfaction.
This suggested that
high performance would lead to high satisfaction if employees perceived
that there was an equitable reward system within the organization. This
condition has been referred to as a perceived performance-extrinsic
reward contingency.
Also included in the Lawler model was an intrinsic reward conting e n c y ("I r e w a r d m y s e l f w h e n I p e r f o r m
wel I .").
It fol lows that the
performance-satisfaction
relationship
would
also
be
moderated
by
this
variable.
To address adequately the role of the performance-reward
contingency in the performance-satisfaction relationship, both types
o f rewards m u s t b e c o n s i d e r e d .
Figure 1 suggests the relationships
expected in the study (Van Ti I burg, 1986).
Purpose
and
Objectives
The purpose of the study was to investigate the relationship
between reward contingencies and the levels of job performance and job
satisfaction of Cooperative Extension Service county agents.
Of particular Interest was the role that perceived extrinsic rewards played In
the
job
performance-job
satisfaction
relationship.
The
objectives
of
this
study
were
to:
1.
Describe the population on each of the following variables:
s e l f - r a t i n g o f j o b p e r f o r m a n c e , o v e r a l l j o b satisfaction,
satisfaction
with the , ba
,-v . s a t i s f a c t i o n w i t h p r o m o t i o n . s a t i s f a c t i o n w i t h c c - w o r k e r s ,
s a t i s f a c t i o n w i t h t h e w o r k itself, s a t i s f a c t i o n w i t h s u p e r v i s i o n , a g e n t
performance-intrinsic
reward
contingency,
and
program area, perceived
perceived
performance-extrinsic
reward
contingency.
2.
Determine
relationships
among
selected
variables.
3.
Determine If there were moderating effects of certain
variables on the relationship between other selected variables.
Summer 1988
selected
25
Satisfaction
With
1,
Perceived Job
Performance
Overall Job
Satisfaction
Co-Workers
4
/
/
/
1
1Intrinsic 1
Reward
Contingency
F i g u r e 1.
Model
suggesting
relationships
among
variables.
The following hypotheses were developed to address Objective 2 and
Objective 3:
1.
S a t i s f a c t i o n w i t h p a y , p r o m o t i o n , a n d supervision w i l l b e positively
r e l a t e d t o t h e perceived
job performance-extrinsic reward contingency .
2.
S a t i s f a c t i o n with c o - w o r k e r s a n d t h e w o r k i t s e l f will b e positively
related to the perceived job performance-intrinsic reward contingency .
the
3.
Overall job satisfaction
wil I b e p o s i t i v e l y r e l a t e d
perceived job performance-reward contingency variables.
to
both
of
T h e p e r c e i v e d j o b p e r f o r m a n c e - e x t r i n s i c r e w a r d c o n t i n g e n c y will
4.
m o d e r a t e t h e relationships
between Job performance and all job satisfaction variables in the following way:
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High performance wil l
lead to hlgh satisfaction and low performance
wil I l e a d t o l o w s a t i s f a c t i o n o n l y w h e n t h e r e i s a
high
perceived
performance-extrinsic
reward
contingency.
No
relationship is expected between performance and satisfaction
w h e n t h e r e i s a l o w p e r f o r m a n c e - e x t r i n s i c r e w a r d contingency.
5.
The perceived job performance-intrinsic reward
moderate the relationships between job performance and
ance satisfaction variables in the following way:
contingency w i l l
all job perform-
High performance wil I lead to high satisfaction and low perf o r m a n c e wil I l e a d t o l o w s a t i s f a c t i o n o n l y w h e n t h e r e i s a
high
perceived
performance-intrinsic
reward
contingency.
No
relationship is expected between performance and satisfaction
when there is a low performance-intrinsic reward contingency.
Procedures
The design of the study was correlational in nature,
researcher to investigate relationships among variables.
allowing
the
Population
The population consisted of all Ohio Cooperative Extension Service
county agents under contract March 1, 1985.
Names were obtained from a
validated list secured from the Ohio Cooperative Extension Service.
The
validation process controlled for selection and frame error.
l a t i o n (& = 2 4 4 ) i n c l u d e d a g r i c u l t u r e a g e n t s (A = 94), h o m e ~!%%~~s
a g e n t s (E = 80), a n d 4 - H y o u t h a g e n t s (l= 70).
The entire population was used in the study (controlling sampling
error) and was referred to as a sample of all populations of Ohio Cooperative Extension Service county agents who might have been employed by
the Ohio Cooperative Extension Service at other points in time.
This
logic permitted the use of inferential statistics in the data analysis.
Data
Collection
The data were collected during the month of May, 1985 using a mail
q u e s t i o n n a i r e f o l l o w i n g s u g g e s t i o n s b y Dillman (1978).
Data for 218
agents were usable (data sample = 89%).
Generalizability
of the results
of the study was determined by comparing early respondents with I ate
r e s p o n d e n t s (Mi I l e r 8 S m i t h , 1 9 8 3 ) o n a l l v a r i a b l e s u s i n g t t e s t s
( a l p h a = .05).
No di fferences were found.
Instrumentation
The mail questionnaire contained three parts:
(a)
Likert-type
items scaled very strongly disagree = 1 to very strongly agree = 6,
(b) d e m o g r a p h i c i t e m s , a n d (c) t h e J o b D e s c r i p t i v e I n d e x ( S m i t h , K e n d a l l , & H u l i n , 1969) which measures facets of job satisfaction.
Cont e n t v a l i d i t y w a s d e t e r m i n e d u s i n g a p a n e l o f e x p e r t s . Reliability o f
Llkert-type items was determined using a pilot test of Ohio Cooperative
E x t e n s i o n S e r v i c e d i s t r i c t p e r s o n n e l p r o d u c i n g Cronbach's
alphas ranging
f r o m .70 t o .95 a n d f r o m t h e d a t a s a m p l e .77 t o .91.
Data
Analysis
Descriptive statistics, multiple regression, moderated regression
a s r e c o m m e n d e d b y P e d h a z u r (1982), P e a r s o n c o r r e l a t i o n c o e f f i c i e n t s a n d
+ tests were used for analysis of the data.
Alpha levels were set 2
p r ior i
a t .05.
Summer 1988
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Resu
Results
are
organized
by
its
objectives.
Objective 1.
A g e n t s r e p o r t e d a m o d e r a t e a m o u n t tR= 4 . 4 2 ; S D =
.76; s c a l e 1-6) o f o v e r a l l j o b s a t i s f a c t i o n b u t h a d v a t - y i n q amounts
a s s o c i a t e d w i t h s p e c i f i c c o m p o n e n t s o f t h e j o b d e p e n d i n g on the p a r t i c F i n d i n g s suggested
that many agents were
ular facet being measured.
n o t s a t i s f i e d w i t h p r o m o t i o n o p p o r t u n i t i e s (X = 1 0 . 9 6 ; S D = 7 . 1 8 , s c a l e
Similar to those findings were the results of satisfaction with
O-271L
p a y (X = 1 5 . 2 6 ; S D = 5 . 4 0 ; s c a l e O - 2 7 ) .
Agents scored medium to high
o n t h e f a c e t , thywork
itself m = 39.95, SD = 5.70; scale O-54). Most
a g e n t s w e r e e v e n m o r e s a t i s f i e d w i t h theirsupervision
tP= 4 1 .46; S D =
10.72; scale 0.54).
T h e f a c e t o f t h e j o b t h a t respondents
w e r e most
s a t i s f i e d w i t h w a s t h e i r r e l a t i o n s h l p s w i t h c o - w o r k e r s (X = 4 4 . 3 7 ; SD =
9.94; scale O-54).
Agents tended to reward themselves intrinsically for good performa n c e (intrinsic
reward contingency, X = 4.73;
S D = .67; s c a l e 1-6).
Forty-two percent of the respondents disagreed, however, that the organization had a performance-contingent reward system with the mean score
o f 3 . 6 5 ( S D = .73) o n t h e e x t r i n s i c r e w a r d c o n t i n g e n c y .
Agents rated
themselvesas
moderately high performers E = 4.73; S D = .41; s c a l e
l-6).
Objective
2.
Data for Objective 2 appear in Table 1.
Resu I t-s
supported Hypothesis 1.
Substantial
positive
relationships
were
found
between satisfaction with pay and promotion and with the extrinsic
r e w a r d c o n t i n g e n c y Cr- = .54, r = .52, r e s p e c t i v e l y ) .
A moderate pos it i v e r e l a t i o n s h i p w a s f o u n d stween s a t i s f a c t i o n w i t h s u p e r v i s i o n a n d
t h e e x t r i n s i c r e w a r d c o n t i n g e n c y (r--= .48).
Results for Hypothesis 2 were mixed.
No relationship was found
b e t w e e n satisfaction
with co-workers and the intrinsic reward conting e n c y Cc = .04), b u t a m o d e r a t e p o s i t i v e r e l a t i o n s h i p b e t w e e n t h e w o r k
I t s e l f a n d t h e i n t r i n s i c r e w a r d c o n t i n g e n c y w a s indicated b y t h e .30
correlation coefficient.
Hypothesis 3 was supported with results indicating that overall job
satisfaction is positively related to both contingency variables.
The
r e l a t i o n s h i p w a s m o d e r a t e f o r t h e e x t r i n s i c r e w a r d c o n t i n g e n c y Cr_= .36)
a n d s u b s t a n t i a l f o r t h e i n t r i n s i c r e w a r d c o n t i n g e n c y (L= .50).
Objective 3.
Data for these hypotheses appear in Tables 2 and 3.
The job performance-extrinsic reward contingency was not found to be a
moderating variable but instead was determined to have a direct effect
o n s a t i s f a c t i o n a s i n d i c a t e d b y significant
variance increments for the
contingency variables in al I regression models.
The hypothesized and
actual relationships are pictured in Figure 2.
The only significant interaction (Indicating the moderation of a
r e l a t i o n s h i p ) f o u n d w a s a s s o c i a t e d with s a t i s f a c t i o n w i t h p r o m o t i o n , b u t
the moderating variable appeared to be job performance rather than the
The interaction was ordinal and indicated that
contingency
variable.
high
performers’ satisfaction with promotion increased as perceptions of
equity of the reward system increased but at a slower rate than the
i n c r e a s e associated with l o w p e r f o r m e r s .
The intrinsic reward contingency was also not found to moderate the
relationship between performance and satisfaction.
The only significant
interaction (associated with satisfaction with supervision) was again
an indication that job performance moderated the relationship between
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4
P
Table 1
Pearson
Correlation
-
-
Coefficient
for
Perce ved
i
Job
Performmance
Perceived job performance
Overall
job
Satisfaction
satisfaction
w i t h pay
Satisfaction
tion
with
Satisfaction
itself
with
Satisfaction
workers
with
Satisfaction
vision
with
Extrinsic
gency
reward
Intrinsic Reward
gency
the
Relationships
Overa I I
Job
Sat isfaction
Between
Variables
Satisfaction
Pay
Promotion
Work
Itself
CoWorkers
Supervision
Extrinsic
Reward
Contingency
Intrinsic
Reward
Contingency
1 .oo
.26
1 .oo
-.11
.33
1 .oo
-.09
.22
.28
1 .oo
.10
.50
.26
.25
.04
.23
.22
.31
.27
1 .oo
-.05
.24
.27
.35
.26
.28
1 .oo
.04
.36
.54
.52
.36
.36
.48
1 .oo
.35
.50
.05
.04
.30
.04
.14
.11
promo-
work
1 .oo
co-
super-
contin-
contin1 .oo
Table 2
Results
of
Extrinsic
Prediction
Moderated
Reward
of
Desirability
Dependent
Variable
O v e r a l l j o b satisfaction
Satisfaction
with
promotion
Satisfaction
with
pay
Satisfaction
with
the work itself
Satisfaction
with
co-workers
Satisfaction
with
supervision
‘df
-= 1,215.
Regression
Contingency
of
of
and
the
Interaction
Self-Rating
Staying
of
of
Job
Performancein
the
Variables
Self Rating of
J o b Performancea
PerformanceE x t r i n s i c Rewarda
Change
InR2
Change
F
Job
Performance
Interactionb
Change
inR2
L
in R2
I
.48
.060
16.10”
.119
31.43*
.002
.012
3.55
.277
83.03*
.040
12.67”
.018
5.37*
.288
93.26*
.003
I .oo
.008
1 .99
.123
3.058*
.ooo
.06
.001
.12
.127
31.22”
.001
.12
.005
1 .36
.234
66 .oo*
.ooo
.08
bdf
- = 1,214.
*~<.05, krit3.98
Table
3
Results of Moderated Regression of the Interaction of Job PerformanceIntrinsic Reward Contingency and Self-Rating of Job Performance In the
Prediction
of
Desirability
Dependent
Variable
adf
-= 1,215.
*e’.o5,
30
bdf =
Staying
Variables
Self Rating of
J o b Performancea
PerformanceI n t r i n s i c Rewarda
Change
Change
In E2
OveralI j o b s a t i s faction
Satisfaction
with
promotion
Satisfaction
with
pay
Satisfaction
with
the work itself
Satlsfactlon
with
co-workers
Satisfaction
with
supervision
of
F
Interactionb
Change
in A2
L
in E2
L
.008
2.32
.192
55.66*
.007
2.04
.012
2.58
.006
1.34
.008
1.85
.018
3.86
.008
1 .72
.004
.85
.ooo
0.00
.070
18.26*
.006
I .42
.001
.13
.001
.17
.010
2.13
2.44
.028
6.26*
.020
4.62*
.011
1,214.
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Hypothesized
Performance
)
Satisfaction
T
Reward
contingencies
Actual
Performance
b~
Reward
Figure
reward
Satisfaction
Contingencies
Hypothesized and actual relationships
2.
contingencies
and
satisfaction.
between
performance,
the contingency variable and satisfaction and not the reverse.
(The
c h a n g e i n RL w a s .02, a n d a g a i n t h e m a g n i t u d e s u g g e s t s t h e q u e s t i o n o f
p r a c t i c a l ggnificance.)
T h i s i n t e r a c t i o n w a s d i s o r d i n a l a n d sduu a a e s t e d
that if agents were high performers, their satisfaction with supervision would increase as their perceptions of the intrinsic contingency
increased, but if they were low performers, the opposite relationship
was true.
Conclusions
and
Recommendations
High satisfaction with intrinsic components of the job (co-workers
and the work itself) and lower satisfaction with extrinsic components
(pay,
promotion, s u p e r v i s i o n ) a s w e l l a s l o w s c o r e s o n t h e e x t r i n s i c
r e w a r d c o n t i n g e n c y a n d h i g h s c o r e s o n t h e in t r insic
reward contingency
indicate that agents tend to reward themselves for high performance
while they perceive that the organization does not.
The extension service should investigate the actual
reward contingencies in place to
determine equity of the reward system.
In addition, importance must be
placed on administrative awareness of perceptions and attitudes of
emp I oyees.
The high correlations between the contingency variables and measures of satisfaction indicate that organizations concerned with satisf a c t i o n l e v e l s a m o n g e m p l o y e e s s h o u l d - p a y p a r t i c u l a r a t t e n t i o n t o perceptions o f e q u i t y o f t h e r e w a r d s y s t e m .
The lack of significant intera c t i o n s b e t w e e n p e r f o r m a n c e a n d perceived
equity indicate that, genera l l y , I f t h e c o n d i t i o n e x i s t s (perceived e q u i t y o r i n e q u i t y ) , I t e x i s t s
regardless of performance level.
References
B r a y f i e l d , A . H., & C r o c k e t t , W . H . ( 1 9 5 5 ) .
employee performance.
Psychological Bulletin,
Employee attitudes
52, 3 9 6 - 4 2 4 .
(Continued
Summer 1988
and
o n p a g e 54)
31