The Impact of Pay for Performance on Employees' Creativity: Moderating Effect of Person-job Fit and Mediating Effect of Creative Self-efficacy

Over the past three decades, a debate has being burgeoning in academic circles over the effects of extrinsic rewards on the likelihood of generating creativity. The learning theoretical approach has suggested that promised reward may bolster creativity by establishing a contingency between novel behavior and reinforcement. This view has been supported by a variety of studies, in which rewards offered for high performance have indeed increased creativity. However, a competing humanist approach has made the very opposite prediction, asserting that promised reward should undermine creativity by reducing perceived autonomy and thereby undermining the intrinsic motivation posited to drive creativity. It has also been proposed within this camp that promised rewards reduce creativity by drawing attention toward the rewards rather than the creative process. In previous studies, the relationship between pay for performance (PFP) intensity and creativity is inconclusive. In this study, we propose a process model based on social cognitive theory to explain how and when PFP affect individual creativity. Based on the cognitive evaluation theory and the learned industriousness theory, it is hypothesized that there is an inverted U shape relationship between PFP and creativity, and the impact of PFP on creativity is mediated by creative self-efficacy based on the social cognitive theory. Additionally, taking an interactional perspective, it is proposed that the interaction between PFP and person-job fit would be significant such that for those employees rating high on person-job fit, the positive effect of intermediate level of PFP on creativity would be stronger and the negative effect of high level of PFP on creativity would be weaker, and this interaction will also be mediated by employees’ creative self-efficacy. Data were collected from 296 dyads of employees and their immediate supervisors in 44 enterprises. The questionnaire for employee included PFP, creative self-efficacy, and person-job fit. Employees’ creativity and job complexity was rated by their immediate supervisors. Theoretical hypotheses were tested by hierarchal regression analysis. Results of analyzing the matched sample showed that PFP had unique reversed U shape indirect effects on employee creativity via creative self-efficacy. Further, moderated path analysis revealed person-job fit augmented intermediate PFP’s direct positive effect on creative self-efficacy and indirect positive effect on creativity, and attenuated high PFP’s direct negative effect on creative self-efficacy and indirect negative effect on creativity. In contrast to previous studies, the research demonstrated that employees would achieve highest creativity at intermediate level of PFP, this result clarified the relationship between objective incentive intensity and employees’ creativity in workplace. Second, by examining the mediating effect of creative self-efficacy, the results contributed to our understanding on the mechanism through which PFP influence creativity. Finally, through investigating the moderating effect of person-job fit, we confirmed it as an important bounded condition of the effect of PFP on employees’ creativity.