Pay-for-performance (P4P) has recently been introduced in Nigeria to improve quality of health services. Its early results show significant variation between implementation sites. Literature suggests this might be explained by differences in design, context and implementation of the scheme. This study aimed to explore how context and implementation influence P4P in Nigeria. Semi-structured in-depth interviews with 36 health workers explored their views and experiences on how contextual and implementation factors influenced the impact of the P4P scheme. Data were analysed using the framework approach. Four themes captured the views and experiences of participants. Uncertainty of earning the incentive and inadequate infrastructure reduced health worker motivation and performance results; whilst adequate health worker understanding of the scheme and good managerial skills (health facility level) improved motivation and performance. Minimising delays in incentive payments, effective communication and improving the health workers understanding of the P4P scheme are likely to improve the outcomes of pay for performance programmes, independent of their design.