Purpose: This paper aims to explore the complex relationships between intrinsic and extrinsic motivation, pay satisfaction and job satisfaction at the retailer that uses a pay-for-performance plan for front-line employees. Design/methodology/approach – This paper draws on a single organization case study acrossseven stores, and uses a survey, archival documents, open-ended questions and researcher interactionwith employees and managers.

Findings: The results provide some support for the complementary nature of intrinsic and extrinsic motivation. Intrinsic motivation was positively associated with pay and job satisfactions, whereas extrinsic motivation was negatively associated with job satisfaction, and not associated with pay satisfaction. The qualitative insights indicate that pay fairness is important, and those who perceived pay was not fair generally made comparisons with others or felt that pay did not reflect their effort. It is also found that the majority of employees perceived that goals were clear.

Research limitations/implications: The dominance of extrinsic motivation without including behavioural, social, and psychological factors in agency theory research is questioned. The research finds no support for "crowding out", but rather finds some evidence of "crowding in" where intrinsic motivation is enhanced, to the detriment of extrinsic motivation.

Practical implications: The findings highlight that managers should enhance both intrinsic and extrinsic motivation, and pay employees well to increase job satisfaction.

Originality/value: Few studies examine incentives for front-line employees, and there is evidence that minimum wage employees can have high intrinsic motivation. Perceptions of pay fairness can vary across motivation levels, age, and gender.