A leader’s prime role is to motivate his or her team to perform effectively and with commitment. A good starting point is to understand the two forms of motivation that drive us all – what behavioural science defines as intrinsic and extrinsic motivation – and then to ensure a balance between the two.
New research from Antoinette Weibel at the Institute for Work and Employment Research, University of St.Gallen, and colleagues at BI Norwegian Business School and Oslo and Akershus University, raises questions about the consequences when employees are more or less concerned about their pay vis-à-vis engagement with their tasks as they work. It also offers valuable advice on how to achieve a balance between intrinsic and extrinsic motivation in organizations.
Intrinsic motivation is the individual’s personal desire to perform tasks well, take on new challenges, improve skills and gain knowledge. Characterised by enthusiasm, engagement, and enjoyment in the task itself, it exists within the individual rather than relying on external pressures or rewards. Extrinsic motivation comes from external influences that motivate the individual to attain desired outcomes. Rewards such as money or prizes are extrinsic motivators, as are threats of punishment or loss. Competition which encourages the individual to beat others is also an extrinsic motivator.
Most employees are subject to intrinsic and extrinsic motivation simultaneously. Employers increase employees’ intrinsic motivation (for instance, by providing job autonomy and constructive feedback, by highlighting the importance of the work tasks, or by providing competitive base wages) while also providing incentives intended to increase extrinsic motivation, contingent on performance or results.
Although recent management literature has tended to emphasise the importance of intrinsic motivation, how extrinsic motivation and intrinsic motivation relate is unclear. It is not sufficient to assume that tangible incentives necessarily induce extrinsic motivation, as extrinsic motivation is rarely measured. Furthermore, research into the effects that incentives have in real-life compensation systems on intrinsic and extrinsic motivation have been highly variable and inconclusive.
This new research investigated the simultaneous associations that intrinsic and extrinsic motivation have with various employee outcomes and found, consistent with widely held belief, that intrinsic motivation has a greater influence on performance than extrinsic motivation. Intrinsic motivation was associated with positive outcomes such as work performance and commitment, and could avert negative outcomes such as turnover, burnout, and work–family conflict. Extrinsic motivation, by contrast, was negatively related or unrelated to positive outcomes although it can be a potent motivator where there is little potential for intrinsic motivation and when it is relatively easy to monitor and measure results and outcomes.
The most important practical implication of this research is that organizations should address intrinsic and extrinsic motivations as separate motives. The researchers found no evidence that increasing extrinsic motivation would be advantageous to either individuals or organizations and suggest that organizations should focus on increasing employees’ intrinsic motivation.
To this end, it is important that employees are invited to participate in decision-making, that managers listen to them and are able to take their perspectives, that employees are offered choices within structures, and that they receive both positive feedback when they take initiative and non-judgmental feedback when they have problems.
It is also important that organizations proceed with caution when applying coercive controls such as close monitoring, contingent tangible incentives and comparing employees to each other, but have competitive base pay levels.
Access the full research paper: Do intrinsic and extrinsic motivation relate differently to employee outcomes? Antoinette Weibel, Institute for Leadership and HR Management, St Gallen University; Bård Kuvaas and Anders Dysvik, BI Norwegian Business School; Robert Buch and Christina G.L. Nerstad, Oslo and Akershus University College of Applied Sciences. Published 2017, Journal of Economic Psychology 61, pp 244–258.