Expanding the understanding of motivation in the theory of public service contracting

The understanding of what drives efficient performance is only partial in the standard theory of public service contracting where performance essentially is explained as dependent on extrinsic incentives. In this paper I claim that intrinsic motivations and the dynamics between intrinsic motivations and extrinsic incentives also have a role for explaining performance. This role is not limited to shifts from the public to the private service sector, as suggested by current supplements to standard theory, but it is also extended to play a part in on-going and recurrent contractual relationships with private service providers. In order to address my claim, I provide an embedded case study based on qualitative data of motivations and motivational dynamics within a set of external contractual relations managed through a performance management scheme by a public contracting agency. I find that motivations among staff are rooted in both intrinsic as well as extrinsic motives and the provision of extrinsic incentives through the performance management scheme provokes different motivational reactions among staff with importance for both performance and management.