Extrinsic Vs. Intrinsic Employee Rewards

Extrinsic is something that happens outside of yourself while intrinsic means something that is created within. When these ideas are applied to workplace motivation, extrinsic means outside forces used to encourage better performance. Intrinsic means creating a sense of self-motivation for better performance. Both styles have pros and cons in employee motivation, and the most beneficial for employee satisfaction and organizational productivity might be a combination of the two styles.

Extrinsic Rewards

Examples of extrinsic rewards for employees are bonuses, additional time off, gift cards and even praise. An employee that has shown motivation and enthusiasm for a project might receive a reward to recognize her work. The employee feels good to be recognized for her performance and likely will continue to perform at a higher level on the next project. The downside to this type of extrinsic reward is that the reward quickly becomes an expected reward for job performance. If you provide a reward such as a gift card for a project and then do not do so for the next two special projects, the employee might lose the motivation to excel. The employee likely still will perform the job adequately, however, not with the same high-intensity level as when she receives a reward.

Intrinsic Rewards

Intrinsic rewards are ones that come from within the employee. For example, an employee might decide to take on a task outside of his normal duties. It might be because he simply sees a need and wants to help the company, he might want a new job skill or he might want to show management that he is capable of increased responsibility. The benefit to this type of internal reward is that it originates within the employee; he has a great deal of personal satisfaction when he accomplishes the task. The downside to intrinsic rewards are that the employee might take on a new challenge to prove himself, but feel taken advantage of if he must continue the extra duties without recognition. If the employee is not promoted, given a raise or a bonus, he might decide to take his new skills to another company where he is recognized for the skills.

Using Rewards

One approach to take with employee rewards is to use both intrinsic and extrinsic methods. For example, you might notice that an employee is eager to learn a new job duty. Allow the employee to take on the task for her own internal reasons. If she shows dedication to the the new job duty, determine what type of rewards you can give. It might be a bonus, a small raise or sometimes even simply changing her job title to reflect the increased responsibility. Praise should be high on the list of rewards. Even if an employee is only doing her own job and not stretching to take on new tasks, public recognition for a job well done is free and it is considered the highest level of motivation, according to TMC, a performance management company.

Communication

If you aren't sure if your employee reward's system is working or if you see a level of employee negativity, discuss the issue with the employee. By having regular communication with an employee, you learn about his motivations and might learn creative ways to reward him. For example, you might learn that the employee is bored because he has been doing the same job for years. Training him on a new job miught increase his enthusiasm for the job. Or, you may learn that an employee wants to continue her education, but doesn't have the time or resources. You might have an in-house training program that helps her learn a new skill. The employee might be reluctant to speak outright about what the company should give as a reward. However, as you communicate with employees, you will learn how to blend extrinsic and intrinsic rewards to maintain a motivated, fully-engaged workforce.

References

• TMC: Performance Management Featured Article
• Marios Alexandrou: Employee Motivation