Excessive Extrinsic Rewards in Workplace Relationships

Excessive rewards are viewed as a means of eliciting the maximum potential trust and cooperation from employees by stimulating their motivation. By taking the management perspective, this chapter addresses the scant but conflicting behavioral studies of psychologists and economists and the existing presumptions in psychological contract theory about the provision of excessive extrinsic rewards to employees. To help readers contextualize the key concepts used throughout the chapter, we define the following terms: Trust in the context of business and organization, is defined as trusting behavior (Korsgaard et al., 2015) with the expectation of cooperation. Employee cooperation is defined as a cooperative behavior in terms of work outcomes or affective decisions, with employees being motivated and obligated to perform (Shore & Barksdale, 1998), committed to the organization (Gambetta, 1988) and willing to reciprocate (Falk & Fischbacher, 2006). Finally, excessive extrinsic rewards are defined as monetary rewards provided by the employer and perceived by the employee to exceed their own expectations or to exceed the employer’s initial promise.