Definition: An extrinsic reward is a tangible and visible reward given to an individual or an employee for achieving something. They usually have monetary value such as a salary hike, bonus, award, or public recognition.
Description: They are usually offered by the individual's immediate manager who decides upon them. These rewards are typically financial such as an increase in salary or a cash reward for performing well or a gift certificate for going beyond the call of duty.
These rewards motivate and inspire employees because money or equivalent rewards are important to most people. Someone would work on a project in lieu of extrinsic rewards even when that person is not internally motivated. For example, a sales person may not be interested in the product he/she is selling but upon realising that he/she would get a cash bonus on the completion of sales targets, he/she would make an additional effort to complete his/her targets on/before time.
Because extrinsic rewards are tangible in nature, they are generally given to the individual directly responsible for the effort.
Extrinsic rewards differ from intrinsic rewards which are generally qualitative in nature such as a challenging work assignment, involvement in key decisions, a better rank in the work hierarchy, etc.
Extrinsic rewards are also commonly used for behaviour conditioning. Typically, there will be something that acts as the event and then there will be an extrinsic reward which reinforces it. For example, if an organisation wishes that employees have higher attendance levels, they may introduce a cash reward for the employee with the highest attendance throughout the year.
However, those using extrinsic rewards in a modern workplace would do well to remember research conclusions of modern behavioural scientists that efforts towards conditioning using extrinsic rewards may lead to completely unintended consequences.
Extrinsic rewards work well in the short-term to motivate behaviour. However, one should always consider the following questions before implementing them for long term.
1. Are you motivating the required behaviour or just motivating people to get the award?
2. Will you need to keep increasing the award amount to keep this behaviour sustainable?
3. Are you replacing an internal source of motivation with an external one?
As you can see above, in the long-term scenarios intrinsic rewards are much more suitable than extrinsic rewards.
Description: They are usually offered by the individual's immediate manager who decides upon them. These rewards are typically financial such as an increase in salary or a cash reward for performing well or a gift certificate for going beyond the call of duty.
These rewards motivate and inspire employees because money or equivalent rewards are important to most people. Someone would work on a project in lieu of extrinsic rewards even when that person is not internally motivated. For example, a sales person may not be interested in the product he/she is selling but upon realising that he/she would get a cash bonus on the completion of sales targets, he/she would make an additional effort to complete his/her targets on/before time.
Because extrinsic rewards are tangible in nature, they are generally given to the individual directly responsible for the effort.
Extrinsic rewards differ from intrinsic rewards which are generally qualitative in nature such as a challenging work assignment, involvement in key decisions, a better rank in the work hierarchy, etc.
Extrinsic rewards are also commonly used for behaviour conditioning. Typically, there will be something that acts as the event and then there will be an extrinsic reward which reinforces it. For example, if an organisation wishes that employees have higher attendance levels, they may introduce a cash reward for the employee with the highest attendance throughout the year.
However, those using extrinsic rewards in a modern workplace would do well to remember research conclusions of modern behavioural scientists that efforts towards conditioning using extrinsic rewards may lead to completely unintended consequences.
Extrinsic rewards work well in the short-term to motivate behaviour. However, one should always consider the following questions before implementing them for long term.
1. Are you motivating the required behaviour or just motivating people to get the award?
2. Will you need to keep increasing the award amount to keep this behaviour sustainable?
3. Are you replacing an internal source of motivation with an external one?
As you can see above, in the long-term scenarios intrinsic rewards are much more suitable than extrinsic rewards.
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