Skip to main content

Advertisement

SpringerLink
Log in

Relationships Between Leader-Contingent and Non-contingent Reward and Punishment Behaviors and Subordinates’ Perceptions of Justice and Satisfaction, and Evaluation of the Moderating Influence of Trust Propensity, Pay Level, and Role Ambiguity

  • Published:
Journal of Business and Psychology Aims and scope Submit manuscript

Abstract

Purpose

This research evaluates how reward and punishment behaviors are related to employee satisfaction, and how perceptions of justice mediate the effects of these behaviors. This study also seeks to examine the connection between some boundary conditions and the efficacy of reward and punishment behaviors.

Design/Methodology/Approach

Data were collected using questionnaires, and hypotheses were tested using a sample of 3,065 managers from 41 business units.

Findings

We found that contingent financial and social rewards were positively related to fairness and satisfaction, whereas punishment behaviors exert a negative influence. Findings reveal that high-trust propensity and low-pay level strengthen the positive influence of rewards on distributive justice, whereas high role ambiguity increases the positive effect of reward behaviors and the negative influence of non-contingent punishment (NCP) on superior satisfaction.

Implications

This study provided evidence that using contingent rewards is more effective in promoting positive attitudes at work than using contingent punishments. Our findings add to the evidence that organizations would benefit from encouraging their managers to use financial and social rewards and reducing the administration of NCP among performing employees.

Originality/Value

This study represents a first attempt to examine an integrated model of the effects of reward and punishment behaviors. It also contributes to this field by empirically evaluating the impact of individual and situational boundary conditions in the efficacy of these leader behaviors.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

References

  • Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (pp. 267–299). New York: Academic Press.

    Google Scholar 

  • Aiken, L., & West, S. (1991). Multiple regression: Testing and interpreting interaction. Thousand Oaks, CA: SAGE.

    Google Scholar 

  • Alexander, S., & Ruderman, M. (1987). The role of procedural and distributive justice in organization behavior. Social Justice Research, 1(2), 177–198.

    Article  Google Scholar 

  • Ball, G., Tevino, L., & Sims, H. (1992). Understanding subordinate reactions to punishment incidents: Perspectives from justice and social effect. Leadership Quarterly, 3(4), 307–334.

    Article  Google Scholar 

  • Bandura, A. (1986). Social foundation of thought and action: A social cognitive theory. Englewood Cliffs, NJ: Prentice Hall.

    Google Scholar 

  • Bateman, T. S., Strasser, S., & Dailey, R. C. (1982). Toward proper specification of the effects of leader punitive behavior: A research note. Journal of Management, 8(2), 83–93.

    Article  Google Scholar 

  • Baumeister, R. F., Bratslavsky, E., Finkenauer, C., & Vohs, K. D. (2001). Bad is stronger than good. Review of General Psychology, 5(4), 323–370.

    Article  Google Scholar 

  • Bianchi, E., & Brockner, J. (2012). In the eyes of the beholder? The role of dispositional trust in judgments of procedural and interactional fairness. Organizational Behavior and Human Decision Processes, 118, 46–59.

    Article  Google Scholar 

  • Blader, S., & Tyler, T. (2009). Testing and extending the group engagement model: Linkages between social identity, procedural justice, economic outcomes, and extrarole behavior. Journal of Applied Psychology, 94(2), 445–464.

    Article  PubMed  Google Scholar 

  • Bloom, M., & Michel, J. G. (2002). The relationships among organizational context, pay dispersion, and managerial turnover. Academy of Management Journal, 45(1), 33–42.

    Article  Google Scholar 

  • Byrne, B. M. (2001). Structural equation modeling with AMOS: Basic concepts, applications, and programmaing. Hillsdale, NJ: Lawrence Erlbaum Associates.

    Google Scholar 

  • Cameron, J., Pierce, D., Banko, K., & Gear, A. (2005). Achievement-based rewards and intrinsic motivation: A test of cognitive mediators. Journal of Educational Psychology, 97(4), 641–655.

    Article  Google Scholar 

  • Chughtai, A. A., & Buckley, F. (2008). Work Engagement and its Relationship with State and Trait Trust: A Conceptual Analysis. Journal of Behavioral and Applied Management, 10(1), 47–71.

    Google Scholar 

  • Cohen, J., Cohen, P., West, S., & Aiken, L. (2003). Applied multiple regression/correlation analysis for the behavioral sciences (3rd ed.). Hillsdale, NJ: Lawrence Erlbaum Associates.

    Google Scholar 

  • Cohen-Charash, Y., & Spector, P. E. (2001). The role of justice in organizations: A meta-analysis. Organizational Behavior and Human Decision Processes, 86(2), 278–321.

    Article  Google Scholar 

  • Colquitt, J. A., Conlon, D. E., Wesson, M. J., Christopher, O. L. H., & Ng, K. Y. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology, 86(3), 425–445.

    Article  PubMed  Google Scholar 

  • Colquitt, J. A., Scott, B. A., Judge, T. A., & Shaw, J. C. (2006). Justice and personality: Using integrative theories to derive moderators of justice effects. Organizational Behavior and Human Processes, 100, 110–127.

    Article  Google Scholar 

  • Colquitt, J. A., Scott, B. A., & Lepine, J. A. (2007). Trust, trustworthiness, and trust propensity: A meta-analytic test of their unique relationships with risk taking and job performance. Journal of Applied Psychology, 92, 909–927.

    Article  PubMed  Google Scholar 

  • Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125, 627–668.

    Article  PubMed  Google Scholar 

  • Deci, E., & Ryan, R. (1980). The empirical exploration of intrinsic motivational processes. In L. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 13, pp. 39–80). New York: Academic Press.

    Google Scholar 

  • DeConinck, J. B., & Stilwell, C. D. (2004). Incorporating organizational justice, role states, pay satisfaction and supervisor satisfaction in a model of turnover intentions. Journal of Business Research, 57(3), 225–231.

    Article  Google Scholar 

  • Dionne, S. D., Yammarino, F. J., James, L. R., & Atwater, L. E. (2002). Neutralizing substitutes for leadership theory: Leadership effects and common-source bias. Journal of Applied Psychology, 87, 454–463.

    Article  PubMed  Google Scholar 

  • Dirks, K. T., & Ferrin, D. L. (2002). Trust in leadership: Meta-analytic findings and implications for research and practice. Journal of Applied Psychology, 87(4), 611–628.

    Article  PubMed  Google Scholar 

  • Eisenberger, R., & Cameron, J. (1996). Detrimental effects of reward—reality or myth? American Psychologist, 51, 153–1166.

    Article  Google Scholar 

  • Eisenberger, R., Hungtington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational support. Journal of Applied Psychology, 71, 500–507.

    Article  Google Scholar 

  • Eisenberger, R., Rhoades, L., & Cameron, J. (1999). Does pay for performance increase or decrease perceived self-determination and intrinsic motivation? Journal of Personality and Social Psychology, 77, 1026–1040.

    Article  Google Scholar 

  • Evans, M. G. (1985). A Monte Carlo study of the effects of correlated method variance in moderated multiple regression analysis. Organizational Behavior and Human Decision Processes, 36, 305–323.

    Article  Google Scholar 

  • Farh, J. L., Podsakoff, P. M., & Cheng, B. S. (1987). Culture-free leadership effectiveness versus moderators of leadership behavior: An extension and test of Kerr and Jermier’s “substitutes for leadership” model in Taiwan. Journal of International Business Studies, 18, 43–60.

    Article  Google Scholar 

  • Fisher, C. D., & Gitelson, R. (1983). A meta-analysis of the correlates of role conflict and ambiguity. Journal of Applied Psychology, 68(2), 320–333.

    Article  Google Scholar 

  • Folger, R., & Cropanzano, R. (1998). Organizational justice and human resource management. Beverly Hills, CA: SAGE.

    Google Scholar 

  • Folger, R., & Konovsky, M. A. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal, 32(1), 115–130.

    Article  Google Scholar 

  • Frank, R. H. (1985). Choosing the right pond: Human behavior and the quest for status. New York: Oxford University Press.

    Google Scholar 

  • Gardner, J., Van Dyne, L., & Pierce, J. (2004). The effects of pay level on organization-based self-esteem and performance. A field study. Journal of Occupational and Organizational Psychology, 77, 307–322.

    Article  Google Scholar 

  • George, J. M. (1995). Asymmetrical effects of rewards and punishments: The case of social loafing. Journal of Occupational and Organizational Psychology, 68, 327–338.

    Article  Google Scholar 

  • Gostic, A., & Elton, C. (2007). The carrot principle: How the best managers use recognition to engage their people, retain talent, and accelerate performance. New York: Free Press.

    Google Scholar 

  • Graen, (1978). Role-Making process within complex organizations. In M. Dunnette (Ed.), Handbook of industrial and organizational psychology (pp. 1201–1245). Chicago: Rand McNally.

    Google Scholar 

  • Greitemeyer, T., & Weiner, B. (2008). Asymmetrical effects of reward and punishment on attributions of morality. The Journal of Social Psychology, 148(4), 407–420.

    Article  PubMed  Google Scholar 

  • Hinkin, T. R., & Schriesheim, C. A. (2008). An examination of “non-leadership”: From laissez-faire leadership to leader reward omission and punishment omission. Journal of Applied Psychology, 93(6), 1234–1248.

    Article  PubMed  Google Scholar 

  • House, R. J. (1971). A path goal theory of leader effectiveness. Administrative Science Quarterly, 16, 321–338.

    Article  Google Scholar 

  • House, R. J., Schuler, R. S., & Levanoni, E. (1983). Role conflict and ambiguity scales: Reality or artifacts? Journal of Applied Psychology, 68(2), 334–337.

    Article  Google Scholar 

  • Ilies, R., & Judge, T. A. (2005). Goal regulation across time: The effect of feedback and affect. Journal of Applied Psychology, 90, 453–467.

    Article  PubMed  Google Scholar 

  • Jackson, S., & Schuler, R. (1985). A meta-analysis and conceptual critique of research on role ambiguity and role conflict in work settings. Organizational Behavior and Human Decision Processes, 36, 16–78.

    Article  Google Scholar 

  • James, L. R., & Brett, J. M. (1984). Mediators, moderators and tests for mediation. Journal of Applied Psychology, 69, 307–321.

    Article  Google Scholar 

  • Judge, T., & Piccolo, R. (2004). Transformational and transactional leadership: A meta-analytic test of their relative validity. Journal of Applied Psychology, 89, 755–768.

    Article  PubMed  Google Scholar 

  • Judge, T. A., Piccolo, R. F., Podsakoff, N. P., Shaw, J. C., & Rich, B. L. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77, 157–167.

    Article  Google Scholar 

  • Kerr, S., & Jermier, J. M. (1978). Substitutes for leadership: Their meaning and measurement. Organizational Behavior and Human Performance, 22, 375–403.

    Article  Google Scholar 

  • Khon, A. (1993). Punished by rewards. Boston: Houghton-Mifflin.

    Google Scholar 

  • Kluger, A., & Denisi, A. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and preliminary feedback intervention theory. Psychological Bulletin, 119, 254–284.

    Article  Google Scholar 

  • Kuvass, B. (2006). Work performance, affective commitment, and work motivation: The role of pay administration and pay level. Journal of Organizational Behavior, 27, 365–385.

    Article  Google Scholar 

  • London, M. (2003). Job feedback: Giving, seeking, and using feedback for performance improvement. Hillsdale, NJ: Lawrence Erlbaum Associates.

    Google Scholar 

  • Lowe, K., Ktoeck, K., & Sivasubramaniam, N. (1996). Effectiveness correlates of transformational and transactional leadership: A meta-analytic review of the MLQ literature. The Leadership Quarterly, 7, 385–425.

    Article  Google Scholar 

  • Luthans, F., & Stajkovic, A. D. (1999). Reinforce for performance: The need to go beyond pay and even rewards. Academy of Management Executive, 13, 49–57.

    Google Scholar 

  • Masterson, S. S., Lewis, K., Goldman, B. M., & Taylor, M. S. (2000). Integrating justice and social exchange: The differing effects of fair procedures and treatment on work relationships. Academy of Management Journal, 43(4), 738–748.

    Article  Google Scholar 

  • Mayer, R., Davis, J., & Schoorman, F. (1995). An integrative model of organizational trust. Academy of Management Review, 20, 709–734.

    Google Scholar 

  • McKnight, D. H., Cummings, L. L., & Chervany, N. L. (1998). Initial trust formation in new organizational relationships. Academy of Management Review, 23, 473–490.

    Google Scholar 

  • Moorman, R. H. (1991). Relationship between organizational justice and organizational citizenship behaviors: do fairness perceptions influence employee citizenship? Journal of Applied Psychology, 76(6), 845–855.

    Article  Google Scholar 

  • Peng, T., & Peterson, M. (2008). Nation, demographic, and attitudinal boundary conditions on leader social rewards and punishments in local government. Journal of Organizational Behavior, 29, 95–117.

    Article  Google Scholar 

  • Peterson, S. J., & Luthans, F. (2006). The impact of financial and nonfinancial incentives on business-unit outcomes over time. Journal of Applied Psychology, 91, 156–165.

    Article  PubMed  Google Scholar 

  • Pillai, R., Schriesheim, C., & William, E. (1999). Fairness perceptions and trust as mediators for transformational and transactional leadership: A two-sample study. Journal of Management, 25, 897–933.

    Article  Google Scholar 

  • Pinder, C. (1987). Valence-instrumentality-expectancy theory. In R. Steers & L. Porter (Eds.), Motivation and work behavior (4th ed., pp. 69–88). New York: McGraw-Hill Book Company.

    Google Scholar 

  • Podasakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.

    Article  Google Scholar 

  • Podsakoff, P. M., Bommer, W. H., Podsakoff, N. P., & Mackenzie, S. B. (2006). Relationships between leader reward and punishment behavior and subordinate attitudes, perceptions, and behaviors: A meta-analytic review of existing and new research. Organizational Behavior and Human Decision Processes, 99, 113–142.

    Article  Google Scholar 

  • Podsakoff, P. M., & Mackenzie, S. B. (1995). An examination of substitutes for leadership within a levels-of-analysis framework. Leadership Quarterly, 6, 289–328.

    Article  Google Scholar 

  • Podsakoff, P. M., Niehoff, B. P., Mackenzie, S. B., & Williams, M. (1993). Do substitutes for leadership really substitute for leadership? An empirical examination of Kerr and Jermier’s situational leadership model. Organizational Behavior and Human Decision Processes, 54, 1–44.

    Article  Google Scholar 

  • Podsakoff, N. P., Podsakoff, P. M., & Kuskova, V. V. (2010). Dispelling misconceptions and providing guidelines for leader reward and punishment behavior. Business Horizons, 53(3), 291–303.

    Article  Google Scholar 

  • Podsakoff, P. M., Todor, W. D., Grover, R. A., & Hubert, V. L. (1984). Situational moderators of leader reward and punishment behaviors: Fact or fiction? Organizational Behavior and Human Performance, 34, 21–43.

    Article  PubMed  Google Scholar 

  • Preacher, K., Rucker, D., & Hayes, A. (2007). Addressing moderated mediation hypotheses: Theory, methods, and prescriptions. Multivariate Behavioral Research, 42(1), 185–227.

    Article  Google Scholar 

  • Rizzo, J., House, R., & Lirtzman, S. (1970). Role conflict and ambiguity in complex organizations. Administrative Science Quarterly, 15, 150–163.

    Article  Google Scholar 

  • Ronan, S. (1986). Equity perception in multiple comparison: A field study. Human Relations, 39(4), 333–346.

    Article  Google Scholar 

  • Rotter, J. (1966). Generalized expectancies for internal vs external control of reinforcement. Psychological Monographs, 80, 1–28.

    PubMed  Google Scholar 

  • Rotter, J. (1967). A new scale for the measurement of interpersonal trust. Journal of Personality, 35, 651–665.

    Article  PubMed  Google Scholar 

  • Rotter, J. (1971a). A new scale for the measurement of interpersonal trust. Journal of Personality, 35, 651–665.

    Article  Google Scholar 

  • Rotter, J. B. (1971b). Generalized expectancies for interpersonal trust. American Psychologist, 26, 443–452.

    Article  Google Scholar 

  • Rotter, J. B. (1980). Interpersonal trust, trustworthiness, and gullibility. American Psychologist, 35, 1–7.

    Article  Google Scholar 

  • Rubin, R. B., Bommer, W. H., & Bachrach, D. G. (2010). Operant leadership and employee citizenship: A question of trust? Leadership Quarterly, 21, 400–408.

    Article  Google Scholar 

  • Shaffer, V., & Arkes, H. (2009). Preference reversals in evaluation of cash and non-cash incentives. Journal of Economic Psychology, 30, 859–872.

    Article  Google Scholar 

  • Shrout, P., & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: New procedures and recommendations. Psychological Methods, 7(4), 422–445.

    Article  PubMed  Google Scholar 

  • Sims, H., & Szilagyi, A. (1975). Leader reward behavior and subordinate satisfaction and performance. Organizational Behavior and Human Performance, 14, 426–438.

    Article  PubMed  Google Scholar 

  • Skarlicki, D., & Latham, G. (1996). Increasing citizenship behavior within a labor union: A test of organizational justice theory. Journal of Applied Psychology, 81(2), 161–169.

    Article  Google Scholar 

  • Smith, C., Organ, D., & Near, J. (1983). Organizational citizenship behavior: Its nature and antecedents. Journal of Applied Psychology, 68, 653–663.

    Article  Google Scholar 

  • Sobel, M. E. (1982). Asymptotic confidence intervals for indirect effects in structural equation models. In S. Leinhardt (Ed.), Sociological Methodology (pp. 290–312). San Francisco: Jossey-Bass.

    Google Scholar 

  • Stajkovic, A. D., & Luthans, F. (1997). A meta-analysis of the effects of organizational behavior modification on task performance, 1975–95. Academy of Management Journal, 40, 1122–1149.

    Article  Google Scholar 

  • Stajkovic, A. D., & Luthans, F. (2003). Behavioral management and task performance in organizations: Conceptual background, meta-analysis, and test of alternative models. Personnel Psychology, 56, 155–194.

    Article  Google Scholar 

  • Taylor, S. (1991). Asymmetrical effects of positive and negative events: The mobilization-minimization hypothesis. Psychological Bulletin, 110(1), 67–85.

    Article  PubMed  Google Scholar 

  • Thierry, H. (1998). Compensating work. In P. Drenth, H. Thierry, & C. De Woulff (Eds.), Handbook of work and organizational psychology (pp. 291–319). Hove: Psychological Press.

    Google Scholar 

  • Thierry, H. (2001). The reflexion theory on compensation. In M. Erez, U. Kleinbeck, & H. Thierry (Eds.), Work motivation in the context of a globalizing economy (pp. 149–166). Mahwah, NJ: Erlbaum.

    Google Scholar 

  • Tremblay, M., & Roussel, P. (2001). Modelling the role of organizational justice: Effects on satisfaction and unionization propensity of Canadian managers. International Journal of Human Resource Management, 12(5), 717–737.

    Google Scholar 

  • Tremblay, M., Sire, B., & Balkin, D. (2000). The role of organizational justice in pay and employee benefit satisfaction, and its effects on work attitudes. Group & Organization Management, 25(3), 268–289.

    Article  Google Scholar 

  • Tyler, T., Degoey, P., & Smith, H. (1996). Understanding why the justice of group procedures matters: A test of the psychological dynamics of the group-value model. Journal of Personality and Social Psychology, 70(5), 913–930.

    Article  Google Scholar 

  • Tyler, T. R., & Lind, E. A. (1992). A relational model of authority in groups. In M. Zanna (Ed.), Advances in experimental social psychology (Vol. 25, pp. 115–191). New York: Academic Press.

    Google Scholar 

  • Van Dyne, L., Vandewalle, D., Kostova, T., Latham, M., & Cummings, L. (2000). Collectivism, propensity to trust and self-esteem as predictors of organizational citizenship in a non-work setting. Journal of Organizational Behavior, 21, 3–23.

    Article  Google Scholar 

  • Villa, J. A., Howell, J. P., Dorfman, P. W., & Daniel, D. L. (2003). Problems with detecting moderators in leadership research using moderated regression. The Leadership Quarterly, 14, 3–23.

    Article  Google Scholar 

  • Walumbwa, F. O., Wu, C., & Orwa, B. (2008). Contingent reward transactional leadership, work attitudes, and organizational citizenship behavior: The role of procedural justice climate perceptions and strength. The Leadership Quarterly, 19, 251–265.

    Article  Google Scholar 

  • Warr, P., & Routledge, T. (1969). An opinion scale for study of managers’ job satisfaction. Occupational Psychology, 43, 95–109.

    Google Scholar 

  • Weiss, H., & Cropanzano, R. (1996). Affective event theory: A theoretical discussion of the structure, causes, and consequences of affective experiences at work. Research in Organizational Behavior, 18, 1–74.

    Google Scholar 

  • Weiss, H., Suckow, K., & Cropanzano, R. (1999). Effects of justice conditions on discrete emotions. Journal of Applied Psychology, 84, 786–794.

    Article  Google Scholar 

Download references

Acknowledgments

This research was supported in part by Grants from the Social Sciences and Humanities Research Council of Canada and from the Omer DeSerres Chair of Retailing of HEC-Montréal.

Author information

Authors and Affiliations

  1. Departments of Human Resource and Management, HEC-Montréal, 3000, Côte-Sainte-Catherine Road, Montreal, QC, H3T 2A7, Canada

    Michel Tremblay, Christian Vandenberghe & Olivier Doucet

Authors
  1. Michel Tremblay
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Christian Vandenberghe
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Olivier Doucet
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Michel Tremblay.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Tremblay, M., Vandenberghe, C. & Doucet, O. Relationships Between Leader-Contingent and Non-contingent Reward and Punishment Behaviors and Subordinates’ Perceptions of Justice and Satisfaction, and Evaluation of the Moderating Influence of Trust Propensity, Pay Level, and Role Ambiguity. J Bus Psychol 28, 233–249 (2013). https://doi.org/10.1007/s10869-012-9275-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10869-012-9275-4

Keywords

Search

Navigation