The impact of self-efficacy training and monetary rewards on worker performance

Although a considerable body of research exists that supports the use of monetary incentives in the workplace, the effectiveness of monetary rewards continues to be a much debated topic in the organizational behavior literature. At least part of this controversy can be attributed to our relatively limited understanding of the different cognitive mechanisms that affect how monetary incentives work. One construct that has been receiving considerable attention in the management literature is self-efficacy. The purpose of this dissertation is to further explore the role that self-efficacy has in both the implementation and effectiveness of monetary incentive plans. Given the clear relationship between individual levels of self-efficacy and task performance, it was hypothesized that the effectiveness of a traditional monetary incentive system could be enhanced by boosting worker\u27s self-efficacy levels prior to the administration of a contingent monetary reward. The subjects for this study were 38 workers who were responsible for process billing and mailing work for the organization\u27s financial institution customers. The intervention consisted of two parts. First, the subjects participated in a training session that was designed to increase the worker\u27s level of self-efficacy. Following this, a monetary incentive program was introduced which rewarded the workers for increasing their performance above baseline measures. The results supported the hypotheses. First, the training session did result in a significant increase in the worker\u27s self-efficacy. This, combined with the monetary rewards, resulted in a significant increase in performance. Probably the most significant finding was that both self-efficacy levels and performance remained high in the reversal phase of this experiment several months after the monetary intervention was withdrawn. This finding may indicate that monetary rewards are only needed during the learning phase of a task. This is when they direct and focus worker attention on the task. This study provides beginning support that cognitive factors do interact with monetary rewards, thus having significant implications for the implementation and administration of incentive plans