Intrinsic and extrinsic motivation is essential in encouraging your employees to be more productive. They are passionate about doing daily tasks and achieving your company’s targets. In addition, when adopting a new competitive strategy – to respond to changes in the business environment, your company is easier to execute if your employees are motivated.
Then, ensuring employees are motivated also has an impact on loyalty. They feel at home working in your company, enabling low turnover. As a result, costs for recruiting, training, and developing new employees can be minimal.
How to motivate your employees can be through salary or bonuses. You can also develop programs to increase their internal drives, such as autonomy, challenge, and curiosity. And in general, we can divide motivation into two categories based on its source: internal and external motivation.
What is intrinsic motivation?
Intrinsic motivation is encouragement from within your employees. It makes them eager to do a job or complete a task, even without rewards.
For example, some employees are eager to do daily jobs because it suits their interests. Others may prefer challenging work to actualize the skills they have developed so far. Or, in other cases, they work hard because they have greater autonomy and flexibility to get their work done. It’s all intrinsic motivation.
The importance of intrinsic motivation
Several reasons explain why intrinsic motivation is important in managing your human resources. Being an impetus for perseverance and creativity are two reasons.
Motivated employees are diligent in doing the task. They work on tasks more for pleasure than for external rewards. Or, they do so because they get a challenge, which they need to develop themselves and actualize their competence. As a result, they love their job.
Loving work is also important to foster creativity. For example, when employees encounter a problem, they will solve it. They will be diligent in exploring possible solutions and are willing to make sacrifices as long as the problem is resolved – even if it requires them to work overtime.
In contrast, external factors such as rewards tend to have a detrimental effect on creativity. Say, employees are motivated by bonuses. They will develop creativity and explore solutions to problems only if they get a bonus. If your company doesn’t offer bonuses, for example, because of having financial difficulties, they’re probably not willing to do that.
Examples of intrinsic motivation
Let’s take Daniel Pink’s theory to start with an example of intrinsic motivation. He formulated three aspects to intrinsically encourage satisfaction – and motivate – employees at work. They are autonomy, mastery, and purpose. When employees get fair compensation, these three factors play more role in motivating employees.
Autonomy is related to the independence to actualize abilities and expertise. Your employees are pleased and excited when they have flexibility in doing their jobs. This flexibility can be related to when or how they do the work. So, they can develop new ideas to train or actualize their knowledge and abilities.
Mastery underscores the personal need for your employees to become experts in their jobs and roles. As a result, they try to get better from time to time, either through learning by doing or training. As a result, they can finish tasks faster and have more time for what they enjoy.
Purpose is about clear reasons why they should do the job. Employees are more excited when they see the benefits of their work. They feel they have a clearer direction for their daily activities and contribute to the company.
Other motivating factors are:
- Curiosity. Curiosity fosters a love for exploring and learning. Employees are eager to learn new things, even if it’s not their regular job.
- Challenge. Some employees may like a challenge because it is how they grow to be experts. Instead, they perceive the routine job as boring.
- Control. Employees are motivated if they have control over their work, what happens, and make decisions for the desired outcome.
What is extrinsic motivation?
Extrinsic motivation is the urge to perform a task or job to get a reward or avoid punishment. In other words, it must be stimulated by external factors. Examples are salaries and bonuses.
Several factors must be present to eliminate employee dissatisfaction, even if they do not motivate them. Salary is an example. No one will be willing to work in your company without being paid. But, even if your employees get a salary, it doesn’t always motivate them to do better. Other examples are fair company policies and good working conditions. In Herzberg’s theory, we call these factors hygiene factors.
Meanwhile, other factors play a role in motivating employees and providing job satisfaction. Promotion is an example. Employees are motivated to perform well to gain promotion to a higher position.
The importance of extrinsic motivation
Not all employees are internally motivated. Some employees need external stimuli to encourage them to perform better. Understandably, they spend time and effort contributing to your company. Thus, they expect to get commensurate compensation.
Your employees work not only for pleasure, but to sustain daily life. So, when they get better rewards, such as high salaries, they can be motivated to do better for the company.
External motivation becomes crucial when your company needs employees to complete difficult or uninteresting jobs. Instinctively, they will refuse such work. But, if you give high rewards, it can motivate them to do it. They are willing to make sacrifices to do something they instinctively don’t like to be better compensated.
Examples of extrinsic motivation
Rewards for external motivation can take many forms, perhaps monetary or non-monetary. Salaries, bonuses, commissions, ownership of shares in the company they work for are examples. Praise or fame are other examples.
Salary or wages are compensation to employees who are paid per month, per unit of output, or per hour worked. Employees work hard to earn higher salaries. So, they can fulfill their needs and desires. Often, they pursue promotions because they want a higher salary. Or they move to another company in pursuit of higher compensation.
Commission is compensation whose value is based on the sales generated, expressed as a percentage. It’s common for payments to salespeople. They are motivated to sell more to earn higher commissions.
An employee stock ownership plan (ESOP) motivates employees by allowing them to become shareholders in the company they work for. Their wealth increases when the company’s stock price rises. Knowing the stock price goes up if the company’s performance is superior, they will be motivated to give their best to the company because, in the end, it increases their wealth.
Compliments get employees excited to work hard on a task or project. Thus, getting genuine compliments contributes to job satisfaction and improves their image. For example, one time, an employee received a compliment from the director. It makes them even more proud, and they try hard to maintain or improve it.
Competition encourages employees to strive to be the best among their peers. They can make sacrifices if it makes them better over time and than their coworkers.
Punishment motivates employees not to repeat mistakes. They try to improve themselves before the company imposes harsher penalties, such as dismissal.
Summary: distinguish intrinsic and extrinsic motivation
Intrinsic motivation arises from an individual’s internal drive. For example, employees do something because it is fun and may be willing to spend hours.
Meanwhile, extrinsic motivation arises due to external driving factors. For example, they work to get a promotion and a higher salary.
Then, intrinsic motivation fulfills an internal goal, such as satisfaction or pleasure. It focuses on meeting and satisfying basic psychological needs.
Meanwhile, external motivation involves external benefits, such as money and praise. For example, money fulfills psychological needs because they can buy various things they need, such as food and drink.
Finally, intrinsic and extrinsic motivation can play a role together. For example, employees work on a difficult project. They may be extrinsically motivated to complete it because they are paid more. And at the same time, they are willing to take it because they enjoy the project and it suits their interests.
What to read next
- Motivation: Why is it important? Theory and Types
- Why Are Well-Motivated Employees Important To Business?
- Intrinsic and Extrinsic Motivation: Examples and Differences
- Taylor’s Theory of Motivation: How it Works, Principles and Criticism
- Maslow’s Hierarchy of Needs: Importance, Order of Needs and Criticism
- McClelland’s Theory of Needs: Types and How to Satisfy
- Herzberg’s Theory of Motivation: Examples and Explanations
- McGregor’s Theory X and Theory Y: Categories, Characteristics, and Implications
- Adam’s Equity Theory: How It Works and A Brief Explanation
- Pink’s Theory of Motivation: Elements and A Brief Explanation