The empirical evidence from the econometrics of self-reported job satisfaction and from organisational psychology on job performance raises the main issues regarding the relationship between job performance and job satisfaction (i.e. the sign and the direction of causality), and the connected issues of the effectiveness of economic incentives for job performance and job satisfaction with respect to individuals’ characteristics and contextual variables. This paper provides a survey of the literature on the topic in an attempt to integrate the results from the different lines of research within a single framework. The conventional economic view of the effectiveness of incentives is extended on the basis of the psychological concepts of intrinsic motivations, self-esteem, and life satisfaction.