The Psychological Empowerment and Effects of Extrinsic Rewards on Employee’s Intrinsic Motivation and Creativity

Purpose - It has been argued that intrinsic motivation is an important driver of employee attitudes. The aim of this study was to establish conceptual model that exceptionally integrates psychological empowerment, intrinsic motivation and individual creativity. Specifically, present study clarified why (through intrinsic motivation) and when (extrinsic rewards) psychological empowerment is positively related to employee creativity. Furthermore, this study explored three factors conditioning the effects of intrinsic motivation: relationship with coworker, compensation and job security. Design/methodology/approach - The study was administered on 217 employees belonging to five public service oriented organizations in Ulaanbaatar, Mongolia. The data was analyzed by Smart PLS 2.0. Findings - The study found that intrinsic motivation partially mediated the relationship between (a) meaning and creativity, (b) self-determination and creativity, and (c) impact and creativity, except the (d) competence and creativity. The study also revealed that even though the three conditional factors interact with intrinsic motivation. The leverage of intrinsic motivation on employee creativity was only enhanced by compensation. This study integrated different perspectives of psychological empowerment and provides important insights into the mechanisms linking empowerment and creativity. Research limitations/implications - The study explored how psychological empowerment may affect the employee creativity from the intrinsic motivation perspective, while future researches should incorporate other mediating or even moderating variables. Practical implications - The present study attempted to contribute to investigating the medical service employee’s psychological empowerment and, also examining the comparative effect of intrinsic motivation on employee’s creativity. Theoretical and practical implications of the results, as well as recommendations for future research are discussed.