Beyond the Bonus Check: A qualitative study unraveling the complexities of employee motivation in a PFP environment

Abstract: This thesis is a qualitative single-case study of employee motivation in a PFP environment within a Swedish business unit of one of the world's largest project development- and construction companies. The aim is to investigate how employees perceive and experience the impact of a PFP bonus system on their motivation. The study embraces employees currently covered by the bonus system as well as employees no longer covered by the bonus system. The study applies Chiang and Jang's modified version of Victor Vroom's expectancy theory and suggests that the extrinsic factors in instrumentality and valence, in this case, should be divided into monetary and non-monetary in order to encapsulate all aspects of the motivation question. Results indicate that the bonus alone does not impact perceived motivation to put in additional effort, mainly due to a weak link between individual effort and bonus outcomes, and strong employee preferences for intrinsic and non-monetary rewards. The findings contribute to the field of performance management, incentives and pay-for-performance, by complementing and supporting, but also to some extent questioning existing literature regarding the potential impact of pay-for-performance systems on employee motivation.