Monetary Incentives, Motivation, and Job Effort in the Public Sector

Abstract

What effects do financial incentives have on the effort made by public managers? How do different types of work motivation (i.e., intrinsic, extrinsic, and public service motivation) moderate this effect? We addressed these questions using experimental data from a sample of executives working for the Italian central government and found that monetary rewards had no significant effect on the intended effort of the study participants. Furthermore, the relationship between financial incentives and intended effort, which was insignificant overall, was negatively moderated by the intrinsic motivation of the participants, positively moderated by extrinsic motivation, and unaffected by public service motivation.