June 1996 // Volume 34 // Number 3 // Research in Brief // 3RIB1

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Incentive Systems and Their Influence on the Capacity for Change

Proponents of Incentive Theory claim that employees contribute to organizations in response to the "incentives" they are provided. Incentives can be classified as material, solidary, status, or purposive. Dependence on particular incentive systems may determine the magnitude of organizational flexibility. This research examines the incentive systems operating in one Extension organization and how these systems affect the organization's capacity for change. The findings include Extension staff members' preferences for incentives based on: age, position, gender, job assignment, and ethnic background. These findings provide insights into feasible strategies for promoting organizational flexibility and for rewarding individuals for innovation.

Rebecca Dollman
Extension District Agent
The Alabama Cooperative Extension System
Auburn University, Alabama
Internet address: rdollman@acenet.auburn.edu

Extension agents have been historically recognized as individuals imbued with such qualities as: faith, enthusiasm, courage, vision, judgment, and integrity (Smith and Wilson, 1930). Current Incentive Theorists would classify these agents as "purposive" employees.

Incentive Theory can be traced to Chester Barnard, who first described organizations as cooperative groups with mechanisms for distributing incentives to members (Barnard, 1938). Peter Clark and James Q. Wilson expanded this concept by classifying and defining incentives as follows (Clark & Wilson, 1961; Wilson, 1989):

  1. Material: tangible rewards e.g., salary, fringe benefits;

  2. Solidary: intangible rewards e.g., socializing, camaraderie;

  3. Status: intangible rewards e.g., prestige, recognition;

  4. Purposive: intangible rewards e.g, a sense of group mission.

Incentives Influence Organizational Change

Clark and Wilson claimed that an understanding of organizational dependence on particular incentive systems would lead to the prediction of organizational behavior, especially in the area of organizational flexibility.

Organizations can be classified according to their dominant incentive systems. For example, utilitarian organizations rely on material incentives. These organizations can be very flexible since activities may be changed when needed, as long as adequate material incentives are provided to members.

Solidary and status organizations provide fun, fellowship, or special honors as incentives. Solidary/status organizations are less flexible, since actions meant to improve the group's image may conflict with actions needed to promote change.

Purposive organizations are the least flexible since they rely upon their stated goals as incentives to attract and hold members. Yet, it is often difficult to delineate specific goals that are acceptable to all members. Flexibility is further reduced when small groups within the organization attempt to specify ends that alienate other members. Attempts to change stated purposes may drive out members who are dedicated to a particular goal, since such commitment is difficult to redirect.

Though Extension's historic importance has been acknowledged, its current purpose and contributions are in question (Cigler, 1984; Feller, 1987; Flint, 1994). Goals, programs, and activities which were appropriate in the past may appear to be less important or even irrelevant to members of today's changing society. Thus, the goals of this study of Incentive Systems in the Alabama Cooperative Extension Service (ACES) were to determine how members are motivated and how their interest in particular incentives affects the organization's capacity for change.


The initial research instrument contained questions adapted from numerous sources from academic literature dealing with participants' interest in purposive, solidary, status, and material incentives (dependent variables). To help to refine the final questionnaire, ten ACES employees participated in one of three focus groups and four employees were personally interviewed. These individuals were selected to represent the "typical" employee, since they represented three different levels of educational attainment and four different geographic locations. The final version of the questionnaire utilized two formats: forced ranking and a Likert-like scale. Ten questions requested personal data (independent variables) utilized in grouping responses. A coding system was used to preserve the confidentiality of individual responses. Questionnaires were mailed to all ACES employees in June, 1995.Six hundred and forty employees (83%) returned usable questionnaires.

SPSS software (UNIX version) was used for data analyses. Principal Components Analysis was used to select the research questions which most accurately measured the concepts being studied. Mean scores for each group considered in this analysis were converted to standardized scores. These standardized scores were utilized in determining a factor score for each case. Factor scores were used in t tests and Least Significant Difference tests to determine statistical differences between pairs of variables (Only t test results are displayed here because of the format constraints of this journal).


  1. ACES employees will maintain substantial interest in material incentives from the time they join ACES until they reach 51 years of age, at which time their interest in material incentives will decline.

  2. ACES employees' preferences for purposive incentives will vary according to position in the organization. ACES Academic/Field Staff (working in education, research, and administration) will be highly motivated by purposive incentives. Support Staff (working in institutional positions) will continue to be primarily motivated by material incentives.

  3. ACES Academic/Field Staff members' preferences for purposive, solidary, and status incentives will vary according to gender. Males will rate solidary and status incentives higher than females. Females will rate purposive incentives higher than males.

  4. ACES employees' preferences for purposive, solidary, and status incentives will vary according to ethnic origin. African- Americans will rate solidary and status incentives higher than Caucasians. Caucasians will rate purposive incentives higher than African-Americans. (Other ethnic groups were not considered because these groups had insufficient members to meet the predetermined minimum standard of seven cases per group.)

Table 1
Factor Set A (Forced Ranking Method)
p < 0.05 Factor 1
Factor 2
Factor 3
 22-50 yrs. old -.129 .056 .009
 51+ yrs. old .263 * -.033 -.038
(Position in ACES)
 Support Staff -.350 -.170 -.084
 Acad/Field Staff .120 * .057 * -.011
 Male -.057 .046 .166 *
 Female .002 * .001 -.094
(Ethnic Origin)
 Caucasian -.140 .110 * .010
 African-American .342 * -.257 -.085
Factor Set B (Likert Scale)
p < 0.05 Factor 1
Factor 2
Factor 3
Factor 4
 22-50 -.026 -.093 .101 * .052
 51+ .054 .027 -.272 -.087
(Position in ACES)
 Support -.299 -.364 .372 * .077
 Acad/Field .128 * .168 * -.078 -.042
 Male .074 .056 -.042 -.030
 Female -.038 -.039 -.034 .021
(Ethnic Origin)
 Caucasian -.012 -.081 .029 .001
 African-Am .080 .188 * .001 -.004
An "*" next to a factor score indicates a significantly higher interest in a particular incentive than the other group with which it is being compared. Each analysis utilizes standardized scores in (two) detailed) t tests for equality of variance. A composite factor, such as Factor A1 (Purposive/Material), identifies a "bipolar eigenvector" (Grimm & Yarnold, 1995, p. 106). This factor may be viewed as a spectrum with purposive incentives on the positive end of the scale and material incentives on the opposite, negative end of the scale. Column headings are abbreviated as follows: Pur means Purposive, Mat means Material, Sol means Solidary, Sta means Status.

Findings and Implications for ACES

This research attempted to apply the incentive typology developed by Clark and Wilson (1961) and extended by Wilson (1989) to the problem of implementing organizational change in ACES. Two issues were investigated: a) whether the types of incentives traditionally used to recruit and retain employees now constrain ACES's ability to adapt to a new environment, and b) whether subgroups among ACES employees differ significantly in their reliance on various types of incentives.

Age: Interest in material incentives from ACES seems to remain high until an employee reaches 51 years of age and approaches retirement eligibility. According to the Clark and Wilson theories of organizational flexibility, employees aged 22- 50 (who express considerable interest in material incentives) could be expected to be fairly flexible. These employees should accept change if material rewards are offered as incentives for implementing that change. Employees who have reached 51+ years of age may be less inclined to accept organizational change that affects their valued incentives. Though some research points to the value of hiring older workers (Horton & Eidgahy, 1990), this study indicates that older employees may be more effective in carrying on existing programs than in initiating new ones.

Position in ACES: Support staff are probably the most flexible employees in ACES, since they respond positively to material incentives. Support Staff are also less interested in purposive, solidary, and status incentives than most other groups. Thus, promoting change among Support Staff should be greatly enhanced through the provision of material incentives.

Gender: An Academic/Field staff employee's gender appears to have some influence on preferences for incentives received from ACES, but these differences were less pronounced than expected. Males may be more influenced by status incentives, while females may be more influenced by purposive incentives. Females may be somewhat less interested in material incentives than males. There were no significant differences observed in interest in solidary incentives. Thus, the data suggest that males (who appear to be less purposive and more materialistic) may be more receptive to change affecting valued incentives than females. (Note that the results were very similar when employees were grouped according to job assignments in either Agriculture (mostly males) and Family Programs (mostly females).

Ethnic Origin: The data support the conclusion that African -Americans in ACES are more interested in purposive incentives than Caucasians. Additionally, African-Americans in ACES may be somewhat less interested in material incentives than Caucasians. One may speculate that African-Americans seeking other incentives (such as abundant material incentives) may choose to work in other organizations where these incentives are more readily available. Based on Clark and Wilson's theories, these findings would lead one to expect African-Americans in ACES to be somewhat less receptive than Caucasians to changes that affect their perceptions of the organizational purpose. Caucasians were found to be more interested than African-Americans in solidary incentives. There appeared to be no differences in preferences for status or solidary/status incentives. Thus, considering all these findings, one would expect African-Americans to be somewhat less accepting of organizational change that affects valued incentives than Caucasians. Note that the differences based on ethnic origin were less pronounced and in the opposite direction from the researcher's expectations.

Conclusion: attracting and retaining ACES employees may require that all four types of incentives (material, purposive, solidary, and status) be continually offered by the organization. Though material incentives are desirable to promote organizational flexibility, the current scarcity of material resources may necessitate enhancement of other incentive systems which also appear to be highly valued by some ACES employees.


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