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Project Team Rewards
Literature Review
work because of the work (Armstrong 2002:56). Extrinsic motivation is generated by
external stimulus such as rewards (Armstrong 2002).
Figure 1: Rewards -> Motivation -> Performance -> Success
Employees’ motivation directly affects their performance. The higher the employees’
performance, the more likely is project or organisational success. This relationship is
illustrated in Figure 1
and is widely accepted in the literature (e.g. Arthur 2001,
Armstrong & Murlis 2004, Wilson 2003, and Rosenbloom 2001). While it is widely
accepted that these four factors are linked, debate exists over how they are linked. This is
particularly true for the relationship between rewards and motivation. 
Figure 2: Three Perspectives on Rewards
Three perspectives were identified in the literature about how rewards affect motivation
and hence reward practice (see Figure 2
for illustration). First, ‘extreme’ opponents of
rewards argue that rewards negatively affect employees’ motivation under any
circumstances. Accordingly, the extreme reward opponents completely refuse the use of
rewards. In contrast the ‘extreme’ proponents of rewards argue, rewards positively affect
employees’ motivation under any circumstances. Accordingly, they advocate the use of
one universal reward style and propose a best practice approach. Finally, ‘modest’ reward
proponents argue that the rewards’ effect on employees’ motivation may be both, positive
negative. The effect depends on some variable factors that lead to different “good
practices” in rewarding but no “universally best practice” (Armstrong & Murlis 2004:xi). 
Figure 1: Rewards -> Motivation -> Performance -> Success
Figure 2: Three Perspectives on Rewards
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