Prior research has suggested that matching individual characteristics with task expectations and requirements leads to improved performance. The objective of this study was to examine the role of locus of control, an important individual characteristic, in moderating the impact of performance-contingent incentives and participation on performance. The results, based on a laboratory experiment, indicate that locus of control moderates the performance effects of both participation and incentives. The interaction with incentives is a substitute type in which either the person factor (locus of control) or the situation factor (incentives) blocks the effects of the other factor. The interaction with participation is a blocking type, wherein external orientation diminishes the performance effect of participation.
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