What affects the performance of knowledge workers?

Purpose: The purpose of this research is to examine pay satisfaction, intrinsic and extrinsic job satisfaction and performance for employees at a large software company.

Design: This paper draws on a case study using a survey, open-ended comments, in a large IT company in Australasia.

Findings: We find that Information Technology (IT) professionals, our knowledge workers, who are satisfied with pay, have higher job satisfaction. We find support for intrinsic job satisfaction as a mediating variable in the pay satisfaction to job performance relationship. Whereas, extrinsic and overall job satisfaction did not have a mediating role. Further, the positive association between pay satisfaction and intrinsic job satisfaction challenges the arguments of the crowding out theory.

Research implications: For knowledge intensive industries such as IT, intrinsic job satisfaction is a powerful driver of individual performance. Pay satisfaction as a lever for improving performance, seems to influence intrinsic satisfaction. This would suggest further research into extrinsic and intrinsic motivation, including examining autonomous motivation along the lines of Gagne and Deci (2005).

Practical implications: Our findings have implications for designers of pay for performance plans used to align highly skilled and motivated IT professionals who are at the coal face in creating value for the business and customers.

Novelty: This paper examines pay satisfaction, job satisfaction and performance for knowledge workers in an IT company, and draws on multiple theoretical perspectives.