Motivation exchange rate: the real value of incentives

The purpose of this paper is to describe how individuals compare the value of different types of incentive. This is similar to comparison in the financial field for currency exchange. The proposed exchange rate between incentives is referred to here as motivation exchange rate (MER).

Survey-based empirical data were analyzed to test for the existence of MER, based on 330 samples collected from a number of organizations. Partial least square-based structural equation modeling was applied to test the research model, specifically examining the exchange rate between intrinsic motivation and monetary incentives.

Individuals place their own value on job enjoyment. The present analysis suggests that MER exists between intrinsic motivation and monetary incentive and varies among individuals.

The motivation literature has shown that individuals have their own preferences for different types of incentives. When studying employees’ working behavior, scholars have traditionally focused on preferred incentives. However, the present study reveals that these predominant incentives may change when employees are sufficiently compensated by other types of incentive; how much is “sufficient” depends on MER, as elaborated here.