Lecture Outline:

Introduction
Extrinsic Motivation in the Workplace: Factors,
Types & Examples
Factors to Encourage Motivation
Reward Systems & Employee Behavior: Intrinsic &
Extrinsic Rewards
Intrinsic Rewards in the Workplace
Extrinsic Rewards in the Workplace

Want to encourage and inspire motivation? You need to know what motivation is really.
Motivation is an employee's intrinsic enthusiasm about and drive to accomplish
activities related to work. Motivation is that internal drive that causes an individual
to decide to take action.
An individual's motivation is influenced by biological, intellectual, social and
emotional factors. As such, motivation is a complex, not easily defined, intrinsic
driving force that can also be influenced by external factors.
Sometimes, simply receiving a paycheck is not enough of an incentive to keep
employees dedicated and focused. Managers must think of new ways to hold an
employee's attention and interest on a project, or the company as a whole. Many
companies employ motivational tactics and rewards systems, both of which have
advantages and disadvantages.
Companies use both positive reinforcement and negative reinforcement to
motivate employees. Many managers believe that using positive motivation
techniques encourages employees to produce more and better quality work. For
example, some companies select an employee as "Employee of the Week."
This technique praises the winning employee, while positively encouraging other
employees to keep trying to do well. Other managers believe negative
reinforcement motivates employees to stop bad behavior. For example, a company
may issue a written-warning system, or threaten employees with termination to
get them to perform a certain way.

Companies reward their employees with both tangible

goods, as well as praise. For example, a sales
department may offer a monthly bonus to the highest
earner. Not all tangible rewards come in the form of
money. Some companies host free lunches, or give
away company gear to good workers. Many managers
choose to reward their best employees by simply
praising them for a job well done, or by recognizing
the hard work they put in to a project.
By using positive reinforcement to motivate
employees, a manager may build a good relationship
with his employee that fosters a sense of trust. In a
good manager-subordinate relationship, employees
may feel respected and comfortable in their working
environment. Providing rewards, both tangible and in
the form of praise, can make employees happier.
Happier employees often perform better at work.

Using negative enforcement as a form of

motivation could cause employees to become
dissatisfied with their jobs.
Unhappy workers typically produce less quality
work, become sluggish or fail entirely to meet
deadlines . Applying too much motivation or
offering too many rewards can also have a
negative effect. Employees can become overconfident.
They may feel that they are the bosses' favorite
workers, even if they start to slack off on their
projects or test the limits of their working
relationship with their supervisors.

Extrinsic motivation is an important concept for managers to

understand. We will learn what it is, some of its key factors, and
different types of extrinsic motivation.

Why Is It Important?

Extrinsic motivation is an important tool an organization can use

to motivate members of an organization to accomplish
organizational tasks. Knowing its advantages and disadvantages
will help a manager decide when it's effective to use and when
it's not.
Definition

Extrinsic motivation is a means of encouraging an activity based

upon external consequences resulting from performing the
activity. The most common examples of extrinsic motivations are
rewards and punishments.

Factors to Consider

Some factors need to be considered before you decide to use extrinsic motivation.
You will often use extrinsic motivation in situations in which the activities are
uninteresting and provide little, if any, internal satisfaction. Stuffing envelopes is a
good example of the type of task that probably requires extrinsic motivation. You
also need to consider the level of control that will be necessary in developing
extrinsic motivators.

Types of Extrinsic Motivators

Some extrinsic motivators provide the organization more control over motivation
than others. The classic motivators of reward and punishment are considered the
most controlling and are often referred to as external regulation. In other words,
your task performance is completely controlled by the related rewards and
punishments. For example, if you exceed your sales quota, you may get a bonus,
but if you miss your sales quota by a significant amount, you may be fired.
Sometimes extrinsic motivators can be partially internalized. This may occur if you
are motivated by self-esteem, ego, or guilt. Such partially internalized motivation
is called introjected regulation. For example, let's say that you work as a member
of a team for a special project. While you obtain no internal satisfaction from your
task, you would feel guilt or shame if you let your team down. Thus, you have
internalized the motivation - guilt - but you still perform the task because
external forces are influencing your behavior.

These are some of the factors that are present in a

work environment that many employees find
motivating.

Management and leadership actions that empower

employees,
Transparent and regular communication about
factors important to employees,
Treating employees with respect,
Providing regular employee recognition,
Feedback and coaching from managers and leaders,
Above industry-average benefits and compensation,
Providing employee perks and company activities,
and
Positively managing employees within a success
framework of goals, measurements, and clear
expectations.

Have you ever wondered why some employees are more

motivated than others to work at a higher level of productivity?
This lesson explains how managers use intrinsic and extrinsic
rewards to reinforce positive employee behavior.

Effective Reward Systems

A motivated workforce can be a significant factor in

organizational success. When employees are motivated to work
at higher levels of productivity, the organization as a whole runs
more efficiently and is more effective at reaching its goals. This
is in contrast to an unmotivated workforce, who can negatively
disrupt an organization and distract employees from their work.
For this reason, it is imperative that managers understand the
power of reward systems and how they are used to influence
employee behavior.

Rewards are positive outcomes that are earned as a result of an

employee's performance. These rewards are aligned with organizational
goals. When an employee helps an organization in the achievement of
one of its goals, a reward often follows. There are two general types of
rewards that motivate people: intrinsic and extrinsic.

Intrinsic Rewards

Intrinsic motivation is internal to the person in that it is something that

you have to offer yourself and is driven by personal interest or
enjoyment in the work itself. Because intrinsic motivation exists within
the individual, achieving it does not depend on others. Some people
believe that the most powerful rewards come from inside a person.
Think of that sense of accomplishment you feel once you have overcome
a significant challenge or completed an assignment or work project that
required a good deal of effort. Intrinsic motivation provides that
personal pat on the back or natural high that reflects a person's ability,
competency, growth, knowledge and self-control over their endeavors.
Employees who are intrinsically motivated tend to work at higher levels
of productivity and strive to develop professionally. Intrinsic rewards
include things such as: personal achievement, professional growth,
sense of pleasure and accomplishment.

In a knowledge economy where the greatest asset an employee can offer an

organization is their intelligence, experience, problem solving ability and changesavvy persona, intrinsic rewards are especially important to workers. In fact,
Frederick Herzberg, who is one of the leading theorists of workplace motivation,
found intrinsic rewards to be much stronger than financial rewards in increasing
employee motivation. This is not to say that employees will not seek financial
rewards in addition to intrinsic rewards, rather it just means that money is not
enough to maximize motivation in most employees. People want to feel like their
contributions matter.
For example, an employee might want to reach a sales quota set by his manager
to earn the bonus that is attached to it, but unless the employee feels a sense of
accomplishment as part of making those sales, the motivation to achieve the
quota is less powerful. To help employees with their intrinsic motivation,
managers should:
provide meaningful work
allow workers to make choices through a high level of autonomy
provide opportunities for employees to show their competence in areas of
expertise
facilitate professional development so that employees can expand on their level of
knowledge
offer frequent opportunities for employees to reward themselves
allow employees the opportunity to connect with those with whom they serve to
obtain valuable feedback
give them a path to monitor their progress with milestones along the way

Extrinsic motivation is based on tangible rewards. Unlike intrinsic

motivation that is self-administered, extrinsic motivation is external to
the individual and is typically offered by a supervisor or manager who
holds all the power in relation to when extrinsic rewards are offered and
in what amount. Extrinsic rewards are usually financial in nature, such as
a raise in salary, a bonus for reaching some quota or paid time off.
However, extrinsic rewards can also be as simple as getting the better
office, verbal praise, public recognition or awards, promotions and
additional responsibility.
These material rewards can be motivating to employees because pay,
time off, advancement and recognition are important to most workers.
Just imagine how de-motivating it would be to underpaid, overworked
and unappreciated, and you can quickly see how important extrinsic
rewards are to organizational success. An extrinsically motivated person
will work on a task that they do not particularly care for simply because
of the anticipated satisfaction that will come from some extrinsic
reward. For example, the employee may not be interested in the product
he is selling, but reaching the quota means the bonus, therefore he is
motivated to put forth the effort he needs to meet the sales quota.

Providing employees with extrinsic rewards is

relatively straightforward and usually built into
performance reviews or individual projects.
They are particularly useful in the short-term for
motivating employees to work towards one
specific organizational goal. Meeting the sales
quota for a bonus is an example of offering an
extrinsic reward for a short-term goal.