We developed an emotion-driven cognitive account of how miscalibrated bonus expectations impact employee performance. Results from Study 1 suggest that both joy and hostility have adverse effects on cognitive performance immediately subsequent to bonus communication. While joy mediated the effect of over-met bonus expectation on cognitive performance, both joy and hostility mediated the effect of under-met bonus expectation on cognitive performance. Study 2 replicated the findings from Study 1 and found further that the effects of miscalibrated bonus expectations on cognitive performance persisted for 12 hours. In a field experiment of 401 freelance editors (Study 3), joy mediated the effect of miscalibrated bonus expectations on freelance editors’ cognitive performance as well as task performance assessed both immediately and one week after the bonus communication. Theoretical and practical implications of these results are discussed.
