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Rewards and employee creative

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self-efficacy, reward importance, and locus
of control

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DOI: 10.1002/job.1943

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Journal of Organizational Behavior, J. Organiz. Behav. 36, 5974 (2015)
Published online 2 July 2014 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/job.1943

Research Article
Rewards and employee creative performance:
Moderating effects of creative self-efcacy, reward
importance, and locus of control
MUHAMMAD ABDUR RAHMAN MALIK1, ARIF N. BUTT1 AND JIN NAM CHOI2*
1
Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan
2
Graduate School of Business, Seoul National University, Seoul, South Korea

Summary The effects of extrinsic rewards on creative performance have been controversial, and scholars have called
for the examination of the boundary conditions of such effects. Drawing upon expectancy theory, we attend
to both reinforcement and self-determination pathways that reveal the informational and controlling func-
tions of creativity-related extrinsic rewards. We further identify the individual dispositions that moderate
these two pathways. Specically, we propose that extrinsic rewards for creativity positively predict creative
performance only when employees have high creative self-efcacy and regard such rewards as important.
We likewise propose that extrinsic rewards positively affect the intrinsic motivation of employees with an
internal locus of control, thus enhancing their creative performance. Results based on a sample of 181 em-
ployeesupervisor dyads largely supported these expectations. The current analysis enriches the creativity
literature by combining different perspectives in a coherent framework, by demonstrating the positive
effects of extrinsic rewards on intrinsic motivation, and by demonstrating that the rewardscreativity
relationship varies across employees depending on their individual differences. Copyright 2014 John
Wiley & Sons, Ltd.
Keywords: rewards; creative performance; intrinsic motivation; creative self-efcacy; locus of control;
expectancy; self-determination

Organizations offer various types of rewards to employees to enhance their performance (Amabile, 1996). The
effectiveness of rewards in inuencing employee performance is critical because it affects the achievement of organiza-
tional goals. Despite the importance of rewards and their widespread use in organizations, empirical evidence supporting
the effectiveness of rewards is at best mixed (Eisenberger & Shanock, 2003). Thus, scholars have recently called for an
investigation into the boundary conditions within which rewards affect employee performance (Byron & Khazanchi,
2012). The present study explores the potential contingencies that determine the nature of the rewardsperformance
relationship, particularly focusing on individual differences.
One performance dimension that has received increasing interest among practitioners and researchers alike is the creative
performance of employees (Coelho, Augusto, & Lages, 2011). Creative performance is dened as the generation of
products, ideas, or procedures that satisfy two conditions, namely, they are novel or original, and they are potentially
relevant for, or useful to, an organization (Oldham & Cummings, 1996, p. 608). Although organizations provide various
rewards to promote the creative performance of employees, issues persist regarding the functions of these rewards in
enhancing creative performance. A recent meta-analysis by Byron and Khazanchi (2012) identied three moderators that
affect the rewardscreative performance relationship. These moderators are reward contingency, performance feedback,
and the extent to which the context offers choice or imposes control. Therefore, these authors suggest that the effects of
rewards on creative performance depend on the nature of rewards and the context in which the rewards are being offered.

*Correspondence to: Jin Nam Choi, Graduate School of Business, Seoul National University, Shinlim-dong, San 56-1, Gwanak-gu, Seoul 151-742,
South Korea. E-mail: jnchoi@snu.kr

This work was partially supported by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2011-327-250-
20130030) granted to Jin Nam Choi.

Received 29 January 2013

Copyright 2014 John Wiley & Sons, Ltd. Revised 25 April 2014, Accepted 12 May 2014
60 M. A. R. MALIK ET AL.

Employing expectancy theory as an overarching theoretical driver, we develop an integrative framework that
accounts for the effects of extrinsic rewards on the intrinsic motivation and creative performance of employees.
Drawing on previous research, we maintain that extrinsic rewards have both positive and negative effects (Deci,
Koestner, & Ryan, 1999; Eisenberger, Pierce, & Cameron, 1999), and the relative magnitude of these conicting
effects determines the net effect of these rewards.

In many cases, rewards have conicting effects, being experienced to some extent as controlling and to some extent as infor-
mational these two processes work against each other, so additional factors must be taken into account in predicting the
likely effect of such rewards (Deci et al., 1999, p. 628, italics added).

We use expectancy and self-determination theories to explain the informational and controlling aspect of extrinsic
rewards, respectively. Although researchers have attempted to identify the boundary conditions within which rewards
affect creative performance (Byron & Khazanchi, 2012; Yoon & Choi, 2010), previous studies have overlooked an
important theoretical perspective. The existing literature is largely based on the assumption that rewards affect
individuals in a similar fashion, regardless of their individual differences. Personality theories, however, suggest that
the effects of contextual factors (i.e., extrinsic rewards) on human behavior depend on individual differences that
result in different perceptions and attributions of the same context (Ajzen, 1991). To ll the gap in the existing liter-
ature, we propose that the effects of rewards are not only determined by the nature of rewards and the context in which
they are offered (Byron & Khazanchi, 2012), but also by the personality traits of employees to whom the rewards are
offered. Hence, we suggest that individual dispositions are among the additional factors that determine the effects
of rewards on creative performance, thus varying the effects of extrinsic rewards from one individual to another.
The effects of rewards on the creative performance of employees depend on their personal traits, which play a signif-
icant role in the interpretation of the rewards. In line with expectancy theory (Vroom, 1964), we propose that the positive
effects of extrinsic rewards on creative performance are realized only when the target employees value the given rewards
and exhibit a strong belief in creative self-efcacy. In addition, drawing on self-determination theory (Gagn & Deci,
2005), we advance that employees with an internal locus of control are more likely to experience the positive effects
of rewards on their intrinsic motivation and subsequently on their creative performance. Hence, the increase in the
creative performance of employees in the presence of rewards is partially attributed to an increase in their intrinsic
motivation toward the activity.
In summary, the present study investigates the individual differences of employees that allow them to experience
either the positive or negative effects of extrinsic rewards. This exploration of potential boundary conditions mean-
ingfully expands the rewardscreative performance debate, which has focused mostly on the main effects of
rewards. Considering the previous nding that creative performance is affected only by the rewards contingent on
creativity (Eisenberger, Pierce, et al., 1999), we focus on extrinsic rewards that pertain to creativity. Thus, through-
out this paper, extrinsic rewards refer to the rewards that are contingent on creative performance and not the rewards
that are dependent on general task performance. Hypotheses are empirically tested using the data on181 employee
supervisor dyads collected from business organizations in Pakistan.

Relationship between Extrinsic Rewards and Creative Performance

Extrinsic motivation refers to the desire to perform an activity to achieve an outcome other than the activity itself
(Deci & Ryan, 1985). Rewards that induce extrinsic motivation among individuals are termed as extrinsic rewards.
These rewards include nancial incentives such as bonus and incentive pay, and non-nancial incentives such as
recognition and appreciation, as well as better career prospects such as promotion opportunities in the future.
Extrinsic rewards have both informational and controlling aspects (Deci et al., 1999) that occur through the mech-
anisms of expectancy (Vroom, 1964), reinforcement (Komaki, 2003), and self-determination (Gagn & Deci, 2005),
as explained later.

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 61

Informational aspect of rewards: reinforcement and expectancy pathway

Expectancy theory identies three conditions that result in high motivation to perform a task, namely, (i) expectancy
or the belief that greater effort will increase performance, (ii) instrumentality or the belief in the systems that gauge
performance and offer performance-based rewards, and (iii) valence or the value assigned by individuals to specic
rewards (Vroom, 1964). The fundamental idea of expectancy theory is based on the reinforcement perspective,
which endorses the utilitarian view of human nature and assumes that external reinforcements can strengthen any
behavioral dimension, such as force, duration, novelty, and variability (Skinner, 1938). This perspective maintains
that extrinsic rewards lead employee efforts in the desired direction and elicit behavioral changes toward creativity
when the given rewards are contingent on creative performance (Eisenberger & Cameron, 1998). This core mecha-
nism of reinforcement corresponds with the instrumentality component of expectancy theory (Vroom, 1964), which
suggests the presence of performance-contingent rewards as a prerequisite of motivation to perform. The rewards
used in the current study were contingent on creative performance, hence fullling the instrumentality of the given
rewards. Drawing on expectancy theory, we propose that the creative self-efcacy of employees and the importance
that employees assigned to the given rewards fulll the other two conditions for work motivation (i.e., expectancy
and valence). Therefore, creative self-efcacy and reward importance are expected to moderate the effects of extrin-
sic rewards for creativity on the creative performance of employees.

Creative self-efcacy
Self-efcacy is dened as the belief of individuals in their ability to perform a given task and to meet situational
demands (Bandura, 1997). Self-efcacy related to a specic domain more effectively predicts the behavior related to this
domain (Choi, 2004). In this research context, we employ creative self-efcacy, which refers to the belief (that) one has
the ability to produce creative outcomes (Tierney & Farmer, 2002, p. 1138). In contrast to prior studies that have
demonstrated the direct or mediated effects of creative self-efcacy on creative performance (Choi, 2004; Gong, Huang,
& Farh, 2009), the present study focuses on its moderating role.
As previously stated, expectancy theory (Vroom, 1964) suggests that individuals become motivated to engage in a
task when they are condent that their efforts will improve performance. Individuals with high creative self-efcacy
have condence in their ability to perform creatively. Thus, in the presence of creativity-contingent extrinsic
rewards, these individuals become highly motivated to perform creatively and are condent about the results of their
efforts. This positive expectation of favorable outcomes guides and molds their behavior that generates the expected
outcomes, thus initiating a virtuous cycle through self-fullling prophecy (Eden, 1984; Peterson & Seligman, 2004).
Thus, extrinsic rewards will be effective in generating creative performance for individuals with high creative self-
efcacy because of the expectancy to perform creatively and the virtuous cycle between efcacy and performance.
Hence, we hypothesize that
Hypothesis 1: Creative self-efcacy moderates the relationship between extrinsic rewards for creativity and
employee creative performance, such that this relationship is positive for those with high creative self-efcacy.

In contrast, individuals with low creative self-efcacy have a low expectancy belief that they can successfully
perform creative tasks even when they put in substantial efforts (Dewett, 2007). With the low expectancy regarding
their efforts toward creative performance, these employees regard extrinsic rewards for creativity as a threat that
imposes demands they cannot fulll (Putwain, Kearsley, & Symes, 2011). Thus, instead of pursuing the rewards
promised for creative performance, employees with low creative self-efcacy avoid the situation or intentionally
ignore the task demands for creativity so that they can attribute the lack of rewards to the fact that they just did
not do the task and not because they failed to perform it. This case is similar to the situation of evaluation
apprehension (Cottrell, 1972) in which the employees with low creative self-efcacy doubt their ability to perform
creatively; thus, they avoid the situations in which they recognize the possibility of negative outcomes. Because of
low expectancy of performing creatively, employees with low creative self-efcacy will intentionally divert their

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
DOI: 10.1002/job
62 M. A. R. MALIK ET AL.

efforts to other performance dimensions, thus exhibiting low creative performance (McFall, Jamieson, & Harkins,
2009). Hence, we hypothesize that
Hypothesis 2: Creative self-efcacy moderates the relationship between extrinsic rewards for creativity and
employee creative performance, such that this relationship is negative for those with low creative self-efcacy.

Reward importance
Expectancy theory (Vroom, 1964) identies valence as a basic requirement for any reward to affect individual
behavior. External reinforcements, such as rewards and punishments, can inuence human behavior when the
reinforcement is valued by the target individuals (Eisenberger, Rhoades, & Cameron, 1999). Empirical evidence
indicates that rewards can inuence individual behavior to the extent that rewards are perceived as valuable and
relevant by their recipients (Schwab, Olian-Gottlieb, & Heneman, 1979). In a similar vein, we advance that extrinsic
rewards enhance creative performance only for those who value such rewards, thus suggesting the moderating role
of reward importance of the relationship between extrinsic rewards and creative performance. Although theoretically
plausible, this moderation effect has yet to be tested, especially in the perspective of rewardscreative performance
relationship. To ll this gap, we advance the following moderation hypothesis:
Hypothesis 3: The importance of extrinsic rewards moderates the relationship between extrinsic rewards for cre-
ativity and employee creative performance, such that this relationship is positive for those who perceive extrinsic
rewards as important.

Controlling aspect of rewards: self-determination pathway

According to self-determination theory (Ryan & Deci, 2000a), rewards that emphasize external regulation or control are
apt to decrease the intrinsic motivation of employees. Thus, different from the expectancy and reinforcement pathway
driven by the instrumentality and valence of rewards that directly affect the target behavior, the self-determination
pathway based on the changing sense of control driven by rewards may affect intrinsic motivation, which more directly
affects creativity as established by previous studies (Amabile, 1983; Sagiv, Arieli, Goldenberg, & Goldschmidt, 2010).
In this perspective, extrinsic rewards diminish intrinsic motivation and creativity only when they reduce the perception
of self-control (Gagn & Deci, 2005). Moreover, cognitive evaluation theory suggests that the perception of being
externally controlled, triggered by extrinsic rewards, is important in predicting the effects of these rewards:

rewards can be interpreted by recipients primarily as controllers of their behavior or, alternatively, as indicators of their
competence. In the former case, rewards are predicted to thwart satisfaction of the need for autonomy and undermine intrinsic
motivation. In the latter case, however, rewards are predicted to enhance intrinsic motivation (Deci et al., 1999, p. 628).

Research on personality traits suggests that the perceptions of individuals about the extent of their control over their
behavior and the situation depend on their locus of control beliefs. Thus, locus of control can operate as a critical bound-
ary condition for the effects of rewards on intrinsic motivation. Locus of control refers to the perception of who is in
control of the events around us (Rotter, 1966). Research reveals that individuals can be classied into two categories,
namely, internals and externals. Individuals with an internal locus of control attribute their successes and failures to their
own capabilities and efforts; they have high expectations of their own control over situations and events that affect them.
Individuals with an external locus of control perceive that external factors control the events around them; they exhibit a
low sense of control over situations (Rotter, 1966). The denition of locus of control suggests that individuals differently
perceive their typical levels of self-control over events and situations. Accordingly, the inuence of external factors on
perceived self-control depends on the locus of control beliefs of a person, and different individuals can perceive the same
external factor differently.

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 63

Cognitive evaluation theory suggests that the effects of extrinsic rewards on intrinsic motivation and creativity are
determined by how individuals interpret those rewards (Deci et al., 1999). Individuals with an internal locus of con-
trol are less likely to view external factors (i.e., extrinsic rewards) as controllers of their behavior and are therefore
less likely to experience feelings of being externally controlled in the presence of these rewards (Gagn & Deci,
2005). Consequently, these individuals may view the rewards contingent on creative performance as an opportunity
and as indicators of their competence not as a threat to their self-control or autonomy, thus experiencing the positive
effects of rewards on their intrinsic motivation (Earn, 1982).
Hypothesis 4: Locus of control moderates the relationship between extrinsic rewards for creativity and employee
intrinsic motivation to perform creatively, such that this relationship is positive for those with an internal locus
of control.

In contrast, individuals with an external locus of control are more likely to interpret rewards as controllers of their
behavior or external regulation (Gagn & Deci, 2005). These individuals are more likely to experience the feeling of
being externally controlled because they have a trait-like vulnerability to the external attribution of events and
contextual stimuli (Richmond & de la Serna, 1980). Thus, extrinsic rewards will negatively affect their perceptions
of control and self-determination, reducing their intrinsic interest in the creative activities on which the rewards are
contingent. Hence, we hypothesize that
Hypothesis 5: Locus of control moderates the relationship between extrinsic rewards for creativity and employee
intrinsic motivation to perform creatively, such that this relationship is negative for those with an external locus
of control.

Finally, existing empirical studies have demonstrated the role of intrinsic motivation as a key driver of creativity
(Grant & Berry, 2011; Zhou, Zhang, & Montoro-Snchez, 2011). In the moderation hypotheses developed earlier, we
proposed that extrinsic rewards enhance the intrinsic motivation of employees with an internal locus of control. We further
expect that intrinsic motivation in turn affects the creative performance of employees (Zhang & Bartol, 2010). This effect
is likely to be even stronger in this study because we focus more specically on intrinsic motivation to perform creatively
instead of intrinsic motivation in general. The overall framework and hypotheses are summarized in Figure 1.
Hypothesis 6: Intrinsic motivation to perform creatively is positively related to the creative performance of employees.

Method

Sample and data collection procedure

The data for this study were collected from employees registered in executive training programs at two private
universities in Pakistan. A total of 275 questionnaires were distributed, 239 of which were completed and returned. After
the exclusion of the questionnaires with substantial missing information or unreliable response patterns, 225 usable
responses were identied. The participants provided the e-mail addresses of their supervisors in the questionnaire.
Two weeks after the survey data collection, e-mails were sent to the supervisors. The supervisors who had not responded
were likewise reminded a week after via e-mail. Supervisors who responded to the e-mail rated the creative performance
of focal participants on a four-item scale. A total of 181 e-mails from supervisors (out of 225 sent) were received within
three weeks (response rate = 80.4 percent). Thus, the nal sample for this study included 181 pairs of focal employees
and their supervisors.
The nal analysis sample comprised responses from 73 organizations (41 percent service and 59 percent manufactur-
ing industries). The sample had a low rate of female responses (14 percent), which is consistent with the low

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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64 M. A. R. MALIK ET AL.

Figure 1. Theoretical framework

employment rate of females in Pakistan. The average years of education, work experience, and age of the focal partic-
ipants were 15.2, 13.3, and 36.8 years, respectively. The participants were from diverse functional backgrounds, includ-
ing nance, planning, human resources, marketing, and operations. The participants were employed at different
hierarchical levels, ranging from clerical staff to senior managers.

Measures

Scales with established reliability and validity were applied to operationalize the variables of this study. All of the
items, other than the locus of control, were rated on a ve-point Likert scale, ranging from strongly disagree to
strongly agree. The questionnaires were administered in English, the ofcial language in Pakistan.

Extrinsic rewards for creativity

We assessed extrinsic rewards for creativity with an eight-item scale ( = 0.85) developed by Yoon and Choi (2010).
The scale was based on the items from Ryan and Deci (2000b), Deci et al. (1999), and Baer, Oldham, and Cummings
(2003). The eight items were When I perform creatively, I receive nancial rewards, such as incentives or bonuses;
When I perform creative work, it affects my promotion; If I suggest new ideas for tasks, this approach inuences
my performance evaluation; I get recognized by my supervisor when I suggest new ideas for the task; My
coworkers recognize me when I perform creatively at work; When an employee exhibits creative performance, my
company offers some treats such as a celebration dinner; When I perform creatively at work, my company offers
corresponding benets in return; and When I perform creatively at work, my manager or the top management
compliments me publicly.

Creative self-efcacy
One of the most reliable scales for operationalizing self-efcacy is the one developed by Schwarzer (1999). We
modied ve items of this scale to measure creative self-efcacy ( = 0.75). One sample item from Schwarzer
(1999) and its corresponding measure of creative self-efcacy are as follows: When I am confronted with a prob-
lem, I usually nd several solutions and When I am confronted with a problem, I usually nd several innovative
and unique solutions. Another modied item is With my creative skills, I can handle unforeseen situations.

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 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 65

Importance of extrinsic rewards

The importance of extrinsic rewards was operationalized by a three-item scale ( = 0.84) developed by Yoon and
Choi (2010). A sample item is Extrinsic rewards, such as nancial incentives, promotions, and respect that I can
obtain from my creative performance, are quite meaningful to me.

Locus of control
We measured the locus of control using the scale developed by Rotter (1966). This scale consisted of nine pairs of
items. Each pair comprised two statements, with one representing an internal locus of control and the other an
external locus of control. Respondents were asked to select one statement from each of the nine pairs. Items for
the internal locus of control were scored as one, whereas those for the external locus of control were scored as zero.
The total score of a respondent represents the strength of his or her internal locus of control. A sample pair of
statements is as follows: Most misfortunes are the result of the lack of ability, ignorance, laziness, or all three
(internal locus) and In the long run, the bad things that happen to us are balanced by good ones (external locus).

Intrinsic motivation for creativity

Several established scales measure intrinsic motivation, such as Work Preference Inventory (Amabile, Hill,
Hennessey, & Tighe, 1994). However, our aim in this study was not to gauge generalized intrinsic motivation but
to measure intrinsic motivation to perform creatively within the context of a given task that can be driven by extrin-
sic rewards for creativity. Hence, we used a scale that specically operationalized intrinsic motivation to perform
creatively using the six items developed by Yoon and Choi (2010). This scale was constructed based on the items
from Ryan and Deci (2000b), Deci et al. (1999), and Baer et al. (2003). Sample items include I feel satisfaction
when I perform creatively and I feel a sense of achievement when I suggest new task ideas. The scale exhibited
high reliability index ( = 0.86).

Creative performance
We measured creative performance using four items ( = 0.76) developed by Scott and Bruce (1994). As previously
explained, the creative performance of focal employees was rated by their supervisors to avoid potential common
source bias. Sample items include This person generates creative ideas and This person searches for new technol-
ogies, processes, techniques, and/or product ideas.

Control variables
We considered education (years of formal education) and work experience (years of work experience) as control
variables in our analysis because previous studies have reported that these demographic variables affect the creative
performance of employees (Hirst, Knippenberg, & Zhou, 2009). With the respondents coming from different
industries and having different hierarchical levels, we likewise controlled for the effects of their respective industries
(service = 0 and manufacturing = 1) and position (rank-and-le employees = 1, rst-line supervisors = 2, and high-
level managers = 3).

Results
To check the validity of the present measures, we conducted a conrmatory factor analysis using AMOS for
the measurement model, including the ve self-reported variables and supervisor-rated creative performance.
The results indicated that a six-factor model ts the data better ( 2 = 429.3, df = 334, CFI = 0.95, RMSEA =
0.04) than any of the alternative ve-factor or four-factor models ( 2 difference tests, all p < 0.01), and all
of the factor loadings were highly signicant (all p < 0.001). This analysis indicated the empirical validity
and distinctiveness of the study variables. Table 1 presents the scale means, standard deviations, and inter-
scale correlations.

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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66 M. A. R. MALIK ET AL.

Table 1. Means, standard deviations, and correlations among study variables.

Variable Mean SD 1 2 3 4 5 6 7 8 9

1. Education 15.22 2.86

2. Experience 13.31 9.81 0.01
3. Industry 0.60 0.49 0.06 0.30**
4. Hierarchical position 2.13 0.76 0.37** 0.08 0.14
5. Extrinsic rewards 3.20 0.69 0.11 0.02 0.05 0.01
6. Creative self-efcacy 3.88 0.51 0.11 0.11 0.03 0.14 0.01
7. Importance of extrinsic 3.97 0.76 0.15 0.24** 0.16* 0.20** 0.12 0.01
rewards
8 Locus of control 4.56 1.93 0.09 0.03 0.05 0.17* 0.08 0.02 0.17*
9. Intrinsic motivation 4.26 0.52 0.10 0.01 0.06 0.06 0.12 0.38** 0.06 0.10
10. Creative performance 3.27 0.43 0.05 0.06 0.01 0.04 0.01 0.28** 0.19* 0.17* 0.33**
*p < 0.05; **p < 0.01.

Moderation of the extrinsic rewardscreative performance relationship

We examined the main effects of extrinsic rewards on employee creative performance prior to testing the moderation
hypotheses. As reported in Model 1 (Table 2), extrinsic rewards did not show any signicant direct effect on creative
performance ( = 0.01, p > 0.05).
Hypotheses 1 and 2 propose that the effects of rewards on creative performance would be positive for employees
with high creative self-efcacy, whereas the same effect would be negative for those with low creative self-efcacy.
These hypotheses were tested by hierarchical regression analysis in which the interaction term was introduced after
entering the control variables and the main effects of the interacting variables (Model 3, Table 2). All of the variables
involved in the interaction terms were centered to reduce the problem of multicollinearity (Aiken & West, 1991).
The results suggested that creative self-efcacy was a signicant predictor of creative performance ( = 0.27,
p < 0.001), and it signicantly moderated the relationship between extrinsic rewards and creative performance
( = 0.21, p < 0.01). Figure 2 graphically represents the pattern of this signicant interaction by comparing two sub-
groups formed at one standard deviation above and below the mean values of the moderator (Anderson, 1986). This
simple slope analysis (Aiken & West, 1991) revealed that the relationship between extrinsic rewards and creative

Table 2. Moderated effects of extrinsic rewards on creative performance.

Outcome variable: employee creative performance

Independent variables Model 1 Model 2 Model 3 Model 4 Model 5

Education 0.06 0.09 0.10 0.02 0.07

Job experience 0.08 0.09 0.05 0.13 0.09
Industry 0.04 0.01 0.01 0.01 0.01
Hierarchical position 0.01 0.01 0.05 0.03 0.02
Extrinsic rewards for creativity 0.01 0.02 0.02 0.04
Intrinsic motivation 0.35***
Creative self-efcacy (CSE) 0.27*** 0.24**
Extrinsic rewards CSE 0.21** 0.19**
Importance of extrinsic rewards 0.21** 0.17*
Extrinsic rewards importance of extrinsic rewards 0.23** 0.20**
R2 0.01 0.13*** 0.14** 0.10** 0.20***
*p < 0.05; **p < 0.01; ***p < 0.001.

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 67

Creative Performance
4 High CSE

Low CSE

1
Low Extrinsic Rewards High

Figure 2. Moderation of the extrinsic rewardscreative performance relationship by creative self-efcacy (CSE)

performance was positive for employees with high creative self-efcacy ( = 0.20, p < 0.05), whereas the relation-
ship was negative for those with low creative self-efcacy ( = 0.22, p < 0.05). This interaction pattern is consis-
tent with Hypotheses 1 and 2.
Hypothesis 3 proposes the moderating role of the perceived importance of extrinsic rewards; that is, the effects of
rewards on creative performance would be positive for employees who regard these rewards to be important. The
importance of extrinsic rewards demonstrates both a signicant main effect and a signicant interaction with extrin-
sic rewards ( = 0.21 and 0.23, respectively, both p < 0.01, see Model 4, Table 2). As shown in Figure 3, extrinsic
rewards have a signicant positive effect on the creative performance of employees who perceived the rewards as
important ( = 0.22, p < 0.05). Interestingly, although not hypothesized, the results likewise revealed that extrinsic
rewards were negatively related to the creative performance of employees who did not perceive them to be important
( = 0.27, p < 0.05). In sum, the overall interaction pattern supports Hypothesis 3.

Moderation of the extrinsic rewardsintrinsic motivation relationship

In Hypotheses 4 and 5, we posit that the effects of extrinsic rewards on intrinsic motivation to perform creatively
would be positive for employees with an internal locus of control and negative for employees with an external locus

5
Creative Performance

High
4 Importance
of Extrinsic
Rewards
3

Low
2 Importance
of Extrinsic
Rewards

1
Low Extrinsic Rewards High

Figure 3. Moderation of the extrinsic rewardscreative performance relationship by the importance of reward

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68 M. A. R. MALIK ET AL.

of control. As reported in Model 2 (Table 3), locus of control signicantly moderated the relationship between
extrinsic rewards and intrinsic motivation ( = 0.16, p < 0.05). The ndings indicated that the effects of extrinsic
rewards signicantly vary for individuals with an internal versus an external locus of control. Employees with an
internal locus of control experienced signicantly higher positive effects of extrinsic rewards on their intrinsic
motivation to perform creatively compared with employees with an external locus of control. Figure 4 graphically
illustrates this interaction. Simple slope analysis revealed that extrinsic rewards are positively and signicantly
related to the intrinsic motivation of employees with an internal locus of control ( = 0.21, p < 0.05), whereas the
effects of extrinsic rewards on intrinsic motivation of employees with an external locus of control were negative,
although statistically non-signicant ( = 0.09, p > 0.05). Thus, Hypothesis 4 was supported by the data, whereas
Hypothesis 5 was not supported, as the pattern was in the hypothesized direction but not statistically signicant.

Positive effects of intrinsic motivation on creative performance

To test Hypothesis 6 regarding the effects of intrinsic motivation for creativity on actual creative performance, we
used regression analysis, outlined in Model 2 (Table 2). The results indicated that intrinsic motivation to perform
creatively was a signicant predictor of the creative performance of employees ( = 0.35, p < 0.001), thus
conrming Hypothesis 6.

Table 3. Moderated effects of extrinsic rewards on intrinsic motivation.

Outcome variable: intrinsic motivation

Independent variables Model 1 Model 2

Education 0.08 0.08

Job experience 0.01 0.02
Industry 0.08 0.0
Hierarchical Position 0.01 0.01
Extrinsic rewards for creativity 0.10 0.06
Locus of control (LOC) 0.08 0.09
Extrinsic rewards LOC 0.16*
R2 0.03 0.05
*p < 0.05; **p < 0.01; ***p < 0.001.

5
Intrinsic Motivation for Creative

4
Internal LOC
Performance

2
External LOC

0
Low Extrinsic Rewards High

Figure 4. Moderation of the extrinsic rewardsintrinsic motivation relationship by locus of control (LOC)

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DOI: 10.1002/job
 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 69

When Hypotheses 4, 5, and 6 are considered together, they effectively suggest the possibility that intrinsic
motivation mediates the interaction effect of extrinsic rewards and locus of control on creative performance. To
explore this possibility, we employed the procedure outlined by Preacher, Rucker, and Hayes (2007) and tested
the signicance of the indirect effect of the interaction term, consisting of locus of control and extrinsic rewards,
on the creative performance of employees. The results indicated that extrinsic rewards have a signicant positive
indirect effect on creative performance via intrinsic motivation for employees with an internal locus of control
(conditional indirect effect = 0.05, z = 2.11, p < 0.05). In contrast, the indirect effect was not signicant for employees
with an external locus of control. This pattern indicates that extrinsic rewards exert different levels of indirect effects
on the creative performance of employees depending on their locus of control.

Post-hoc analyses
To check the robustness of our ndings, we performed several post-hoc analyses. First, the scale used to measure
extrinsic rewards included nancial (i.e., bonuses and pay increases) and non-nancial (i.e., recognition and praise)
rewards. To check if these two types of extrinsic rewards have a similar relationship with intrinsic motivation and
creative performance, we repeated the moderation analysis for both types of rewards. The results suggested that
neither of these rewards has a signicant main effect on intrinsic motivation or on creative performance. Reward
importance and creative self-efcacy signicantly moderated the relationship between nancial rewards and creative
performance ( = 0.20 and 0.17 for reward importance and creative self-efcacy, respectively, both p < 0.05), as
well as between non-nancial rewards and creative performance ( = 0.22 and 0.21 for reward importance and
creative self-efcacy, respectively, both p < 0.05). Locus of control moderated the relationship between nancial
rewards and intrinsic motivation ( = 0.17, p < 0.05); however, the moderation was not signicant for the non-nancial
rewardsintrinsic motivation relationship ( = 0.13, p > 0.05).
Second, the results indicated that locus of control and creative self-efcacy directly affect creative performance. These
ndings are consistent with those from previous studies (Gong et al., 2009; Jaswal & Jerath, 1991). We likewise
observed a signicant direct effect of the importance of extrinsic rewards on creative performance, which was counter-
intuitive, considering the non-signicant link between extrinsic rewards for creativity and creative performance. Thus,
we performed an additional moderation analysis to gain a better understanding of this direct effect. We consequently
observed that the relationship between the importance of extrinsic rewards and creative performance is positive and
signicant only in the presence of extrinsic rewards ( = 0.22, p < 0.05) (see Figure 5). When extrinsic rewards are

5
Creative Performance

4 More
Extrinsic
Rewards

Less
2 Extrinsic
Rewards

1
Low High
Importance of Extrinsic Rewards

Figure 5. Moderation of the importance of extrinsic rewardscreative performance relationship by the presence of extrinsic
rewards

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70 M. A. R. MALIK ET AL.

absent, the relationship between reward importance and creative performance is not signicant ( = 0.05, p > 0.05).
This pattern indicates that the direct effect of reward importance is meaningful only with the co-presence of extrinsic
rewards.

Discussion
The present study signicantly advanced the debate regarding the rewardscreative performance relationship in
three aspects. First, it identied and empirically validated expectancy or reinforcement and self-determination as
two distinct pathways linking extrinsic rewards and employee creativity that can be affected by different moderating
contingencies and mediating processes. Second, it highlighted the overlooked role of personal dispositions in the
rewardperformance relationship by showing that the effects of extrinsic rewards on the creative performance of em-
ployees depend on their values and personal dispositions. Failure to consider these individual differences as boundary
conditions could explain the inconsistent ndings that characterize the rewardscreativity relationship (Eisenberger &
Shanock, 2003). Finally, the study suggested that extrinsic rewards can actually enhance the intrinsic motivation of em-
ployees to perform creatively when they have an internal locus of control, thus being buffered from the potential threat of
the controlling and constraining functions of rewards. We underscore the following theoretical and practical implica-
tions of this study as well as its limitations that may inspire future research.

Theoretical implications
This study meaningfully extended the thoughts on the role of rewards in driving the creative performance of
employees. It endorsed previous studies that identied the negative effects of extrinsic rewards on creative perfor-
mance (Amabile, 1985; Sagiv et al., 2010). Our analysis conrmed that rewards can reduce creative performance
when offered to employees with low creative self-efcacy and employees who perceive the rewards as unimportant.
The present study likewise validated that rewards enhance creativity, as reported by several researchers (Burroughs,
Dahl, Moreau, Chattopadhyay, & Gorn, 2011; Eisenberger & Aselage, 2009). Within the framework of two distinct
pathways based on expectancy and self-determination, we explored the boundary conditions that engender either the
positive or negative effects of rewards on creative performance. Examining the boundary conditions instead of the
direct effects of rewards allowed us to offer new critical insights into the rewardsperformance research (Byron &
Khazanchi, 2012; Choi, 2004). In this respect, meta-analytic reviews indicated that the relationship between extrinsic
rewards and creativity depends on the nature of rewards, feedback, and task-related contingencies (Byron &
Khazanchi, 2012; Eisenberger, Pierce, et al., 1999). The present study expanded this literature and provided a more
nuanced explanation by demonstrating the moderating role of individual differences for the rewardperformance
relationship.
The current analysis revealed the signicance of creative self-efcacy in the perspective of the rewardscreative
performance relationship. The moderating function of this individual disposition makes intuitive sense. When individ-
uals nd a task to be intrinsically motivating, they will constantly attempt to perform the task for its own sake because
performing the task itself is enjoyable and satisfying. However, for employees performing the same task to obtain
extrinsic rewards, the efcacy belief to successfully perform the task becomes important. If individuals believe that they
lack the skills required to complete the task, they would not be motivated to perform because of the low probability of
achieving extrinsic rewards (Sternberg, 2006). Hence, creative self-efcacy has signicant instrumental values in
materializing the potential expectancy of extrinsic rewards toward the actual creative performance.
In addition, extrinsic rewards tend to promote the creative performance of employees who regard these incentives as
important. Existing studies have reported that the impact of rewards on performance varies between signicant positive
to non-signicant, depending on the importance that employees associate with the rewards (Eisenberger, Pierce, et al.,
1999). Unexpectedly, our analysis indicated that unimportant rewards may actually affect the performance negatively.

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 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 71

Results suggested that employees who perceived extrinsic rewards for creativity to be unimportant exhibited lower
levels of creative performance, and their creative performance further decreased with an increase in extrinsic rewards.
Several explanations clarify this relationship. Conservation of resources theory (Hobfoll, 1989, p. 513) suggests that
people strive to retain, protect, and build resources. Employees who view the rewards contingent on creative perfor-
mance as unimportant may decide to protect their cognitive resources by shifting their attention toward other perfor-
mance dimensions that result in outcomes they value, and may consequently ignore creative performance. Learned
industriousness theory (Eisenberger, 1992) likewise maintains that when employees focus their resources on a particular
performance dimension (i.e., productivity and accuracy), other performance dimensions are neglected and fall below
their normal performance level. Hence, the unimportant rewards for creativity may encourage employees to concentrate
on other performance dimensions at the expense of creativity. Although these are plausible explanations, future
researchers can explore the underlying mechanism through which unimportant rewards diminish creative performance.
Finally, the present study identied an intermediate mechanism through which extrinsic rewards exert positive
effects on creative performance. The analysis indicated that extrinsic rewards can enhance the intrinsic motivation of
employees who have an internal locus of control. Moreover, the indirect effects of extrinsic rewards on the intrinsic
motivation of employees and on their creative performance (through intrinsic motivation) were signicant for
employees with an internal locus of control but not for employees with an external locus of control. Self-determination
theory suggests that some forms of extrinsic rewards can positively affect intrinsic motivation through the identication
and integration processes (Gagn & Deci, 2005). The current study moves a step further by identifying individual
dispositions that increase the likelihood of employees to experience the positive effects of extrinsic rewards on their
intrinsic motivation and subsequently on their creative performance. The present study adds to the existing literature
by demonstrating that the positive effects of extrinsic rewards on creative performance occur not only through the
reinforcement and expectancy pathway, but also through the self-determination pathway. Moreover, considering that
the existing literature tends to portray the role of extrinsic rewards as detrimental to intrinsic motivation and creativity
(Cooper & Jayatilaka, 2006), the current ndings raise the need to reconsider the role of extrinsic rewards. Specically,
our analysis suggests that extrinsic and intrinsic motivations are not constantly related in zero-sum style and can be
pooled in a synergistic manner to predict creative performance.
Post-hoc analyses revealed that an internal locus of control is particularly important for materializing the positive
effects of nancial rewards compared with non-nancial rewards. One explanation for this nding might be the more
controlling nature of nancial rewards (i.e., bonuses and incentives) compared with non-nancial rewards (i.e., recogni-
tion and appreciation), and thus, their effects could substantially differ for employees with an internal versus an external
locus of control. The controlling aspect of non-nancial rewards is relatively less salient, and hence, it may have similar
effects on employees with both internal and external loci of control. Future research can further investigate the varying
effects of nancial and non-nancial rewards on employees with different dispositions.

Practical implications
This study provided several important managerial implications. The creative performance of employees cannot be
enhanced by simply offering them incentives for creativity. The present results indicated that extrinsic rewards only
promote the creative performance of employees who value these rewards but actually hinder the creativity of employees
who discount their value. Resonating the notion of valence in expectancy theory (Vroom, 1964), this pattern highlights the
practical signicance of providing remunerations and incentives that are in line with employee needs and values to channel
their efforts toward an intended direction (cf. cafeteria benet plan; Dennis-Escofer, 2008). Rewards that are regarded as
unimportant by employees must be avoided at all costs. Such rewards may not only waste resources for the organization
but can also suppress the behavior that the organization intends to promote. The current analysis indicates that the rewards
perceived to be unimportant can actually backre; hence, managers must be cautious in selecting rewards for employees.
The current study likewise indicated that the effects of extrinsic rewards on creative performance depend on employee
values and dispositions. The same extrinsic reward that enhances the creative performance of one employee may impede

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
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72 M. A. R. MALIK ET AL.

that of others, depending on their personal dispositions. The study demonstrated that creative self-efcacy is important
in materializing the intended benets of organizational interventions, such as incentives and praises for creative
performance, whereas locus of control is important in materializing the positive effects of nancial rewards. Thus,
managers should consider not only reward contingency and performance feedback when offering rewards (Byron &
Khazanchi, 2012), but also the employees to whom the rewards are targeted. Future research with a similar focus can
help managers design and offer incentives or compensation packages and other managerial interventions that can foster
employee creativity.

Study limitations and directions for further research

The results of this study should be considered with the following limitations. First, although supervisors evaluated the
creative performance of employees 2 weeks after they reported the predictors and moderators, this duration of temporal
separation may be insufcient to ensure the causal inuences between the two sets of variables. Second, although the
present data collected from the employees of a number of different organizations in diverse industries enhance the
generalizability of the ndings, certain industry-specic or organization-specic patterns may have been overlooked.
Future studies may explore potential industry and/or organizational contingencies that may modify the role of rewards
in enhancing employee creativity. Thus, further research efforts can be directed toward the exploration of additional
moderators, particularly those related to the group or organizational context, in the rewardsperformance link.
Finally, this research was one of the rst studies to identify individual dispositions as potential moderators of the
rewardscreative performance relationship. The study was conducted in a specic contextual and cultural setting of
Pakistani organizations. The cultural dimensions of Pakistan, marked by high uncertainty avoidance, power distance,
and collectivism, are different from those of the countries in Europe and North America where the majority of the previous
rewardsperformance research has been conducted. Thus, the present research requires validation through similar studies
conducted in different cultural settings before generalizability across different contexts and cultures can be claimed.
Despite these limitations, this study meaningfully expanded the creativity literature. Although the rewardscreative
performance relationship has been substantially explored, efforts to identify the moderators of the relationship remain
scarce and have mostly focused on the nature of extrinsic rewards and feedback or task-related contingencies (Byron
& Khazanchi, 2012; Eisenberger et al., 1999; Yoon & Choi, 2010). The present ndings indicated that the prevailing
focus on the direct effects of extrinsic rewards on creativity may fail to examine the intriguing underlying dynamics. A
more productive approach may be applied to examine the boundary conditions within which extrinsic rewards can affect
creative performance positively or negatively. We likewise identied one mechanism through which extrinsic rewards
positively affect intrinsic motivation and creative performance. The identication of other mechanisms through which
extrinsic rewards affect creative performance is another area that requires additional research. Moreover, this study indi-
cated that rewards that are perceived as unimportant can negatively affect employee performance. Researchers may ex-
plore the underlying mechanisms, such as resource preservation and the negative affective reactions resulting from
the perceptions of control and unimportant rewards, which are responsible for the negative effects of these rewards.

Author biographies
Muhammad Abdur Rahman Malik is an assistant professor of organizational behavior at the Suleman Dawood
School of Business, Lahore University of Management Sciences, Pakistan. He earned his Ph.D. in Management from
Lahore University of Management Sciences, Pakistan. His research interests include employee creativity, rewards,
and motivation.
Arif Nazir Butt is a professor of organizational behavior and human resource management at the Suleman Dawood
School of Business, Lahore University of Management Sciences, Pakistan. He earned his Ph.D. in Management

Copyright 2014 John Wiley & Sons, Ltd. J. Organiz. Behav. 36, 5974 (2015)
DOI: 10.1002/job
 MODERATORS OF THE REWARDSCREATIVITY RELATIONSHIP 73

from the McGill University, Canada. His research interests include negotiation and conict management, and lead-
ership and innovation.
Jin Nam Choi is a professor of management at Seoul National University, South Korea. He earned his Ph.D. in
Organizational Psychology from the University of Michigan. His research interests include innovation implementa-
tion, organizational creativity, and multilevel processes of human behavior in organizations.

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