From Incentives To Conflict: Unraveling The Effects of Pay For Performance On Counterproductive Work Behavior

Authors:

Abstract: We examine the impact of pay for performance (PFP) systems on employee work behavior, particularly its influence on interpersonal conflict. By integrating social interdependence theory and conflict management theory, we propose that PFP systems facilitate counterproductive work behavior toward customers through competitive orientation, and this effect is moderated by the ethical climate. We found support for our hypotheses across a multi-wave, multi-source survey (N = 724). Our findings provide insights into how organizations can effectively utilize PFP to motivate employees, while concurrently managing potential conflict and fostering a cooperative work environment.

Track: ORG

Keywords: Pay for performance; competition, conflict management, ethical climate