This study examined faculty behavior under merit
pay Plans at four liberal arts colleges to determine
whether there was a relationship between faculty
motivation (effort) and the degree to which
institutional pay plans and individual expectancies
conformed to Lawler's theory of the conditions
necessary for an effective monetary incentive structure
(Lawler 1971, 1981, 1990). These conditions are: 1) A
perception that performance and merit awards are
linked; 2) Monetary rewards are highly valued; 3) Award
size is large enough to make an impact; and 4)
Information about rewards are publicly disclosed. The
study proposed the question: Is there an association
between motivation levels among faculty subject to
merit pay plans and the presence of the theory
conditions, or do other factors relate to faculty
motivation? Using questionnaires to faculty, statistical correlation techniques tested for
associations between reported faculty behavior and
Lawler's four theory conditions.
Lawler's theory did not apply to this group of
faculty. The reward size condition showed the expected
positive association, however, contrary to theory
hypothesis, the perception of the pay-performance link
was negatively related. Of the faculty characteristics
examined, faculty with higher salaries and those with
tenure reported less willingness to give additional
effort to most activities.
The faculty had highly inaccurate perceptions of
the actual merit payments awarded to others at their
institutions. The perception of the strength of the
pay-performance link indicated that faculty believe the
determination of reward recipients is unpredictable
with respect to one's performance. These faculty
members valued monetary rewards, yet responses to merit
pay in the form of greater effort was weak. The
stronger response to merit pay by the faculty at the
non-merit pay institution suggests that familiarity
with a merit pay system in practice breeds a more
skeptical attitude because it has not proven as
equitable or fruitful in operation as the faculty
expect in the abstract. The findings suggest a need to look more closely
at the role of intrinsic rewards, the perceived pay-performance relationship factor, and the process of
determining rewards
