Extrinsic motivation occurs where individuals are motivated by external stimuli such as money and social reinforcement
In Occupational psychology[]
Traditionally, extrinsic motivation has been used to motivate employees:
- Tangible rewards such as payments, promotions (or punishments).
- Intangible rewards such as praise or public commendation.
Within economies transitioning from assembly lines to service industries, the importance of intrinsic motivation rises:
- The further jobs move away from pure assembly lines, the harder it becomes to measure individual productivity. This effect is most pronounced for knowledge workers and amplified in teamwork. A lack of objective or universally accepted criteria for measuring individual productivity may make individual rewards arbitrary.
- Since by definition intrinsic motivation does not rely on financial incentives, it is cheap in terms of dollars but expensive in the fact that the inherent rewards of the activity must be internalized before they can be experienced as intrinsically motivating.
However, intrinsic motivation is no panacea for employee motivation. Problems include:
- For many commercially viable activities it may not be possible to find any or enough intrinsically motivated people.
- Intrinsically motivated employees need to eat, too. Other forms of compensation remain necessary.
- Intrinsic motivation is easily destroyed. For instance, additional extrinsic motivation is known to have a negative impact on intrinsic motivation in many cases, perceived injustice in awarding such external incentives even more so.