Can budget ambiguity crowd out intrinsic motivation? Longitudinal evidence from federal executive departments

While some scholars have assessed how various features of organizational structure shape intrinsic motivation, the role of budgets and, in particular, programme funding has been overlooked. To address this gap in the literature, we examine how programme funding decisions impact employee motivation. Referencing previous work, we hypothesize that funding choices that emphasize some programmes over others signal clearer organizational goals for employees, thereby increasing intrinsic motivation. In contrast, departments that do not use their budgets to signal clear goals can run the risk of reducing their employees’ intrinsic motivation. We empirically investigate this hypothesis within the context of the US Federal executive departments, constructing a longitudinal dataset (2010–15) from multiple sources. Findings support our hypothesis. Employees in departments that more evenly fund their programmes report lower levels of intrinsic motivation.