Work performance, affective commitment, and work motivation: the roles of pay administration and pay level

Abstract The purpose of this study was to investigate employee attitudes and behaviors among knowledge workers under different forms of pay administration and pay levels. To examine these issues, I collected data from two business units in a large Norwegian multinational company with pay plans combining individual and collective performance and behaviors as the foundations for individual bonuses; one with two collective components (profit and behavior of the unit and the organization) and one with an individual component in addition to the two collective components. After controlling for organizational tenure, education, gender, perceived unit support, perceptions of distributive and procedural justice, and type of pay plan, the key findings are that base pay level, but not bonus level, was positively related to both self‐reported work performance and affective unit commitment, and that these relationships were partly mediated by intrinsic motivation. Furthermore, moderation analyses revealed that the relationships between bonus level and the outcome variables were not affected by type of pay plan. Implications and directions for future research on pay in knowledge intensive organizations are discussed. Copyright © 2006 John Wiley & Sons, Ltd.