Extrinsic vs. Intrinsic Motivation

What propels you and your team to achieve?

This is a vital question for business owners, managers, and staff in any business, as motivation is an essential influence on employee performance and employee engagement, two of most companies’ top concerns.

According to a 2019 Gallup study, companies with high employee engagement experience higher productivity, better retention, fewer accidents, and 21% higher profitability.

Engagement is directly correlated with business success and is increasingly a focus for today’s employers. However, many business owners could likely tell tales of engagement strategies that didn’t work as planned – financial incentive programs that seemed to lower rather than improve performance, or public praise of employee efforts that was met with apathy. Employers may also have anecdotes about employees who were unexpectedly engaged – perhaps given a task that management worried might be too difficult, only to shine in the work.

To understand employee engagement, employers need to understand two key drivers of workers’ behaviour: intrinsic motivation and extrinsic motivation.

Intrinsic Motivation & Employee Engagement

According to Canadian Organizational Behaviour, intrinsic motivation comes from within the individual. It derives from doing a task that a person finds satisfying for its own sake, rather than as a means to achieve some other end. Intrinsically motivated behaviour is tied to our sense of competency – when we have the skills and knowledge to do a task well, and we can see meaningful outcomes from the task, we are more motivated to complete it.

Intrinsic motivation is also connected to a sense of autonomy – people feel more independent when their rewards come from within rather than controlled by an external source. As such, intrinsic motivation can be very influential in terms of heightening both employee performance and employee engagement, because it empowers people.

How can employers and employees create a work environment that cultivates intrinsic motivation?

There are lots of possible strategies, and not all of them will work for every employee. Designing jobs that allow for some level of autonomy – independent decision-making at times, for example – is a good place to start. Employers also need to fill these jobs with employees who have the right skills and knowledge, but who also have room to grow. Work should challenge employees, and as employees increase their knowledge and skills, they may need to take on new responsibilities in order to stay engaged.

Employers can also help ensure that employees understand how their roles fit into the greater structure of the organization, emphasizing that their work has purpose and meaning. This can be discussed during the hiring process as well as during regular goal setting and development meetings.

Research indicates that, at organizations with high engagement, team leaders help workers use their strengths, give staff members recognition, and hold frequent coaching sessions with employees.

Additionally, an ideal workplace provides opportunities for curiosity and exploration to support intrinsic motivation. Employees tend to respond well when they have at least occasional time to test out new ideas and master new skills.

Extrinsic Motivation & Employee Engagement

Extrinsic motivation occurs when workers are driven to complete tasks in order to receive something that is beyond their own control. That is, they look outward rather than inward to have their needs fulfilled. Extrinsic motivation plays some role in most employees’ efforts, because employees get regular pay to complete work. However, extrinsic motivation is also part of those rewards that go beyond wages and salaries. For example, extrinsic motivation might be a response to the promise of a financial bonus, additional vacation days, or public recognition.

Extrinsic motivation can also be a response to personal relationships. An employee may work overtime to complete a project because she doesn’t want the work to fall on a colleague or because she fears criticism from a manager, not because she gains satisfaction from finishing the task. The result here is extrinsically motivated, as it is driven by avoidance of disapproval from someone else or anxiety about another’s feelings.

Notice that we’re also talking about positive and negative reinforcement – terms that many parents will know. That is, extrinsic motivation can involve either avoidance of an unpleasant consequence or pursuit of a pleasant one (or both).

Most employers would likely agree that positive reinforcement is more effective: employees who are constantly stressed out or labouring to avoid punishment will probably be less willing to stay at an organization. The trick with positive extrinsic motivation, though, is to understand just what it is that will motivate employees.

Some employees will work hard if the promised reward is tickets to an NHL game, for instance, while others will not care less.

To design an effective reward system, get to know your employees and ask them what rewards they would respond to, rather than trying to read their minds or assuming that they are motivated by the same things that you are.

Does Extrinsic Motivation Lower Intrinsic Motivation?

There are two primary theories about the way that intrinsic and extrinsic motivation interact. The first is that one reinforces the other: an employee who is performing an intrinsically motivating task will only be further motivated with an external reward. For example, if employees who enjoy their work are promised an extra day off at the end of a major project, they may be even more driven to complete the project on time and on budget.

The opposing theory is that extrinsic motivation undermines intrinsic motivation, because an external reward reduces the employee’s feeling of autonomy.

Independence is a key component of intrinsic motivation, so removing it may lower the incentive to work hard.

For instance, a satisfied employee who is offered a financial incentive above his regular salary may actually feel less motivated or may unintentionally lower his performance because the goal of the work has now become quantitative and external, rather than qualitative and internal.

Experts who reconcile these two views suggest that one way to ensure that extrinsic motivators do not undermine intrinsic motivators is to offer rewards that are unexpected. Getting a gift card to thank an employee who went the extra mile on a project, for example, will likely not diminish and could even boost intrinsic motivation, whereas offering the gift card as a motivator before project completion may in fact have the opposite effect.

Intrinsic and Extrinsic Motivation and Personality

One final note: managers looking to foster either intrinsic or extrinsic motivation should be aware that motivators can vary widely depending on personality. For instance, some members of your sales team may be driven by external approval and additional financial rewards, while others may be more driven by the satisfaction of closing the deal for its own sake.

There are several personality assessments, such as DISC and EQi, that can help managers and employees better understand themselves and their teams, and help employers create effective motivational strategies. Implementing a soft skills training program to address motivation and engagement can also improve retention and business performance.

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Sunnie holds a PhD in English from Dalhousie University, and has published her writing in several academic journals, as well as in magazines, newspapers, and blogs. She combines years of experience as a professor in English with practical experience in the private sector as a trainer in writing and analytical thinking.

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