Employee Motivation Techniques: Extrinsic Rewards Vs. Intrinsic Rewards

What is employee motivation?  Abraham Maslow’s motivation theory, hierarchy of needs- used the content approach when describing employee motivation. Maslow argued that employees have five levels of needs: physiological, safety, belonging and love, esteem, and self-actualizing and that the lower needs must be fulfilled before moving upward to the next need (Maslow, 1954).  B. F. Skinner’s theory suggests that when managers use positive reinforcement it will bring about positive outcomes and negative reinforcement will produce negative results (B.F. Skinner, 1957).   

There are two types of motivation: extrinsic motivation and intrinsic motivation. Extrinsically motivated workers are motivated by incentives and external rewards and intrinsically motivated workers are simply self-motivated.  However, we should not just assume that intrinsically motivated workers do not want to be rewarded for his or her performance nor should we assume that extrinsically motivated workers lack job satisfaction.  Frederick Herzberg, “the father of job enrichment”, suggested that motivation factors (intrinsic) relate to the job itself, such as job recognition, achievement, and positive feelings about the job will create job satisfaction. And Hygiene factors (extrinsic) such as pay, benefits, supervisor, etc. will produce negative feelings about work (Fred Herzberg, 1959). 

 Good managers aim to find the most effective techniques in which to motivate their employees in an effort to achieve organizational goals. Managers often use tangible rewards as incentives to motivate their employees to perform at their best. These motivating factors might include, salary increase, promotion, free lunches, gift cards and other valuable perks. Conversely, some managers repeatedly use negative stimulus such as verbal warnings and threats to motivate their employees to complete assigned task. And in these cases, some workers will complete their task only to avoid punishment. And when esteem level is low- productively will also be low. Negative motivation will only produce negative results.  

It’s for certain that extrinsically motivated individuals seek to be rewarded for doing what is expected of them. But when the job, the pay, or the company environment extracts motivation from these workers they might be less inspired to produce excellent work results. Things such as pay, promotion, and job security are external factors that motivate the extrinsically motivated worker to perform at their best.  When employees are satisfied with their jobs, pay, and the company overall, productivity is at its highest.

So we understand that intrinsically motivated workers get pleasure out of completing a task, recognition, or the job itself.  These individuals don’t normally look for tangible rewards and incentives as a means of motivation but instead are motivated from within.  They might receive some recognition and praise from their managers or none at all. But that does not make them feel any less satisfied about their work.  In a sense, intrinsic motivation is more profitable than extrinsic motivation because the intrinsic individual isn’t bribed by external rewards but looks forward to completing his task simply because he enjoys his work.  Unlike extrinsic motivation, it’s difficult to stimulate intrinsic motivation in someone because this type of motivation comes from the heart. An individual must have a genuine fascination for a particular task or thing.

In conclusion, extrinsic rewards vs. extrinsic rewards: which technique is most effective in motivating employees?  Well…it simply depends upon the individual!  We must keep in mind that what motivates one may not motivate another.  You can’t force an individual to enjoy his or her work. Self-motivation comes natural to some.  Nor can you always count on motivating your staff with tangible rewards. Simply because the reward you promised them may not be what they desired. For example, you may reward them with a 5% raise but they were expecting a 10% raise.  So in this case- the motivation technique was not as effective as it could have been because the reward was not satisfying to the individual(s).  

 Realistically, employee motivation is most achieved by the enticement of desired extrinsic rewards. And in most cases, a combination of both inspires an individual to work at his best…knowing that he will be rewarded for good performance, could ultimately increase his job satisfaction. How long is an individual willing to work without receiving tangible rewards?  At some point the intrinsic worker will expect to receive something tangible, too.  In short, intrinsic motivation combined with extrinsic motivation is most effective. Take away all external rewards and you take away the motivation. Take away the motivation and you will no doubt get negative results.