The Effects of Locus of Control and Challenges on the Relationship between Contingent Rewards and Intrinsic Motivation

Organizations are currently considering the benefits and disadvantages of offering contingent rewards such as commissions and bonuses to their employees. This study examined whether the individual and combined effects of contingent rewards, locus of control orientation and challenges resulted in an increase or decrease in 122 graduate student's intrinsic motivation and performance. Student subjects were given the task of recording as many research citations as possible during a fifteen minute period of time. Subjects also completed a number of measures including Rotter's Locus of Control Scale, a perceived challenge question and the Intrinsic Motivation Inventory. Three multivariate analyses of covariance (MANCOVA) were used to determine differences in intrinsic motivation and performance. Findings suggested that External's performed worse when presented with a challenging task. It was also found that subjects had higher levels of intrinsic motivation when a contingent reward was present. Low observed power and low effect sizes may have contributed to an overall deficiency in results.