Impact of alternative compensation systems on pay valence and instrumentality perceptions

Abstract

Tested the hypothesis that the attractiveness of pay (valence) and perceptions about the linkage between performance and pay would be higher among incentive-paid employees than among employees paid by time worked. Results obtained on 273 male and female production employees of a consumer goods firm generally support the hypothesis. Type of pay system accounted for 3% of the variance in valence and for 40% of the variance in instrumentality perceptions after 5 personal variables (pay level, age, sex, marital status, and tenure) were controlled. Implications of the results for designing pay systems and for future research on expectancy theory are discussed. (PsycInfo Database Record (c) 2025 APA, all rights reserved)