Employees
are the greatest asset to a company, as they are critical to the company's
performance, providing drive, inventive ideas, and a desire to go the
"additional mile" to complete tasks. As a result, their involvement
with the organization is critical in achieving success (Moreira et.al,
2013). Furthermore, Bruzelius & Skärvad (2004) mentions that the
organizational structure is heavily rely on the employees, which impacts the
organization through employee engagement, attitudes and motivation. Motivation
is the art of getting people to do what you want them to do because they want
to do it (Achim et al., 2013).
Bruzelius
& Skärvad (2004) argue that to get employees motivated to work more
efficiently and to support the company’s values and goals, they need to get
compensated through rewards. The reward structure should encourage skilled
employees to stay within the organization as well as increase the motivation
and commitment to the organization and therefore increase the productivity.
(Brickley et al, 2002). Armstrong & Taylor (2020) discuss that there are
two types of motivation namely Intrinsic and Extrinsic.
|
Intrinsic Rewards |
Extrinsic Rewards |
|
A simple description for Intrinsic motivation is that the
motivation by the work itself which is not created by external incentives
(Armstrong & Taylor, 2020). Hennessey et.al, 2015 mentions that Intrinsic
Motivation is the motivation to do something for its own sake, for the sheer
enjoyment of the task itself. |
Armstrong & Taylor (2020) defines that extrinsic
motivation happens when things are done to or for people in order to motivate
them. Extrinsic motivation is the motivation to do something in order to
attain some external goal or meet some externally imposed constraint
(Hennessey et.al, 2015). |
According to Zhao & Pan (2017), Motivation is driven by cross-cultural variances. The examples the study suggested to prove the statement region wise, was Middle East employees are fixated on religion, Japanese employees focused on prestige and social stages and the Employees from Western countries are more concerned about mental health and work-life balance. Hence, depending on the statement and the examples give, it can be assumed that the global context of motivational factors are more based on intrinsic rewards. With the knowledge drawn from several studies, most of the recent studies have indicated that extrinsic rewards are old-fashioned (Pink, 2011; Kohn, 2009; Bhattacharya & Mukherjee, 2009).
Vedio 1: Intrinsic Vs Extrinsic Motivation Explained
Source : Learn my Test (2019)
Jayawardena, N.S. & Jayawardena, D. (2020) differentiated the way that the intrinsic rewards and extrinsic rewards impact on the employee motivation in Sri Lankan Apparel sector. The research identifies The Basic Salary, bonus scheme and Job Performance are the Extrinsic Rewards which are used to motivate the employees, while recognition, Learning opportunities and achievements are acting as Intrinsic Rewards. According to the study, the major extrinsic reward which motivates the employees in Sri Lankan Appeal industry is the job promotions given by the firm. The recognition was identified as the next motivational factor which is an intrinsic reward.
As per the knowledge gathered through the studies, considering the
Banking industry which I have my work experiences, The Extrinsic rewards
provided to the banking employees can be identified as salary increments and
bonus scheme, presenting monthly vouchers for the higher performer, while intrinsic
rewards are recognized as Training Sessions & workshops, Recognition, Team
Building activities and Brain storming sessions. Kuvaas et al. (2017) discussed
the role of employees, intrinsic and extrinsic motivation, and their
performance in the finance trade sector and as store managers and concluded
that intrinsic and extrinsic rewards are considered a principal motivator for
the employees.
As a conclusion, Armstrong & Taylor (2020) mentions that motivation is the
strength and direction of behavior and the factors that influence people to
behave in certain ways. Weather the rewards are intrinsic or extrinsic, the
human resource managers must address the actual requirements of the particular
employee before they implement any motivational strategy (Lee & Raschke,
2016).
Reference
Achim, I.M., Dragolea, L. and Balan, G., 2013. The importance
of employee motivation to increase organizational performance. Annales universitatis apulensis: Series
oeconomica, 15(2),
p.685.
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of
human resource management practice.
Bhattacharya, S. and Mukherjee, P., 2009. Rewards as a key to
employee engagement: A comparative study on IT professionals. ASBM Journal of Management, 2(1), p.160.
Brickley, J.A., Smith Jr, C.W. and Zimmerman, J.L., 2002.
Business ethics and organizational architecture. Journal of Banking & Finance, 26(9), pp.1821-1835.
Bruzelius, LH and Skärvad, PH, 2004. Integrated
organizational theory .Student literature.
Hennessey, B., Moran, S., Altringer, B. and Amabile, T.M.,
2015. Extrinsic and intrinsic motivation. Wiley encyclopedia of management, pp.1-4.
Jayawardena, N.S. and Jayawardena, D., 2020. The impact of
extrinsic and intrinsic rewarding system on employee motivation in the context
of Sri Lankan apparel sector. International Journal of Business Excellence, 20(1), pp.51-69.
Kuvaas, B., Buch, R., Weibel, A., Dysvik, A. and
Nerstad, C.G., 2017. Do intrinsic and extrinsic motivation relate differently
to employee outcomes?. Journal of Economic Psychology, 61, pp.244-258.
Moreira, P.A., Dias, P., Vaz, F.M. and Vaz, J.M., 2013.
Predictors of academic performance and school engagement—Integrating
persistence, motivation and study skills perspectives using person-centered and
variable-centered approaches. Learning and Individual Differences, 24, pp.117-125.
Pink, D.H., 2011. Drive: The surprising truth about what motivates us. Penguin.
Zhao, B. and Pan, Y., 2017. Cross-cultural employee
motivation in international companies. Journal of Human Resource and Sustainability Studies, 5(4), pp.215-222.
Hi Gihan, Further to your statement, Rewards and recognition are vital for organizations to acknowledge the employees for their performances using intrinsic and extrinsic ways (Cascio, 2006). In organizations, intrinsic rewards are considered work content, recognition, and job satisfaction, while extrinsic rewards are payments, promotions, and working conditions. In academics, reward and recognition and employee engagement are popular research areas where the scholars like Brown and Reilly (2013) research to examine the effects of rewards on employee engagement. It is noted that employee engagement is positively influenced by the reward strategies implemented in companies.
ReplyDeleteThank you for the comment Nirmika. Agree with your points. Further to the research areas you mentioned, Despite the vast amount of research focusing on intrinsic and extrinsic motivation, the effects of extrinsic motivators on creativity and innovation have also been scarcely investigated (Fischer et al, 2019). As well as Fischer (2019) stated, widely found positive effects of intrinsic motivation on creative and innovative performance.
DeleteHi gihan, adding to your points, in order to achieve employee engagement, the managers must ensure that employees having the right mix of information, knowledge, power and rewards to work more enthusiastically. and its builds employee self-esteem and energizes the work force for better performance ( Kumar, J & Kumar, 2017).
ReplyDeleteHi Dineth, Thank you for your comment. It is a common consensus that workers will accomplish their tasks better when they are highly motivated. Particularly, the employees are more inclined to perform when they get recognition from the management (Tehseen & Hadi,2015). The recognition of their achievements may be translated into intrinsic rewards; and through these rewards, the employees may motivate and perform up to their maximum capacity.
DeleteThis comment has been removed by the author.
ReplyDeleteWell explained Gihan. Further, the two types of motivation, intrinsic and extrinsic motivation are an area that requires in-depth understanding as the motivational factors differ from one person to the other (Lei, 2010). Thus, effectively motivating employees requires an understanding of the different types of motivation. Accordingly, such an understanding will enable employers to better categorize team members and apply the appropriate factors to motivate different employees.
ReplyDeleteThank you for the comment Dileep. Further to your points, Grant (2008) explained that motivation results in instant performance and productivity by the employees, and as a result of motivation, employees are self-driven. Kuvaas et al., (2017) stated that intrinsic and extrinsic rewards are considered a principal motivator for the employees.
DeleteHi Gihan, Agreed with your points. Research report by (Ali and Ahmed, 2009), Describes that rewards and recognition directly affect the performance of employees. Organizations should implement promotion, increment of salaries, bonus and appreciation method to retain high performance employees.
ReplyDeleteHi Amila. Thank you for your comment. Most of the studies have demonstrated that intrinsic and extrinsic motivators have a number of performance consequences for a wide variety of subject populations (Hennessay et al., 2015). As a result of satisfying the employees’ unmet needs, employees are self driven and the organization gets a higher productivity (Grant, 2008).
DeleteAgreed Gihan. Gungor,(2011) explained that reward management system and participation of employees in decision making are frequently used practices by organizations to accomplish their objectives.
ReplyDeleteHi Upeksha. Thanks and agree with your comment. Eshun (2011) mentions that, most of the managers think that they can motivate the employees by offering monetary rewards. But, it has been evidenced with the scholars that “monetary reward motivates only up to a point, that is, when compensation isn’t high enough or is considered to be inequitable, it’s a demotivator” (Shanks, 2007).
DeleteAdding to your points, Gihan, The existence of intrinsic motivators outnumbers the absence of extrinsic motivators. While extrinsic motivation may have less of a place in an organization than intrinsic motivation, striking a balance between the two is a delicate art that can result in surprisingly beneficial outcomes for employees on an individual, team, and organizational level (Singh, 2016).
ReplyDeleteThis comment has been removed by the author.
DeleteHi Sanmuganathan. Thanks and agree with your comment. Manion (2005) argues that it is serious for Human Resource Professionals to think of that ‘typically, a combination of factors motivate employees, not just one type of extrinsic or intrinsic reward. Therefore, Eshun (2011) states that, it is crucial that they make the effort to combine both reward methods to achieve effective motivation program for their employees.
DeleteHi Gihan, adding to your post According to the Armstrong & Taylor (2020) Motivation at work can take place in two ways. First, people can motivate themselves by seeking, finding and carrying out work (or being given work) that satisfies their needs or at least leads them to expect that their goals will be achieved. Secondly, people can be motivated by management through such methods as pay, promotion, praise (Armstrong & Taylor ,2020)
ReplyDeleteHi Lakshan. Thanks and agree with your comment. Herzberg et al. (1959) describes the same thing in a way that the motivation factors, as intrinsic to the job and hygiene factors as extrinsic to the job.
DeleteWell, Gihan and also, according to Kutza (2000), extrinsic awards are still widely employed in many organizations for a variety of initiatives and performance, although their effects on employee engagement in areas such as personal well-being can be short-lived for most people.
ReplyDeleteHi Isuru. Thanks and agree with your comment. Armstrong & Taylor (2020) mentions that Human Resource Managers develop intrinsic motivation by paying their attention to need for recognition as a motivating factor, to job design ensuring that managers are aware of its importance and their role in designing intrinsically motivating jobs.
DeleteA study carried out by Olafsen et al. (2015) suggested that intrinsic work motivation in terms of salary expectations does not affect employee performance, but the fairness of salary payment does affect employee performance. This contradicts the study results by Kuvaas et al. (2017), which showed that employees work better when intrinsically motivated. However, when employees are primarily motivated by reward and compulsion, they are more likely to find another job (Martin, 2018), which leads to a higher turnover rate. Therefore, companies should employ the right motivational strategies as global competition for talent acquisition is fierce.
ReplyDeleteKuvaas, B., Buch, R., Weibel, A., Dysvik, A. and Nerstad, C.G., 2017. Do intrinsic and extrinsic motivation relate differently to employee outcomes?. Journal of Economic Psychology.
Martin, L. (2018). How to retain motivated employees in their jobs?. Economic and Industrial Democracy, 4(41), 910-953.
Olafsen, A.H., Halvari, H., Forest, J. and Deci, E.L., 2015. Show them the money? The role of pay, managerial need support, and justice in a self‐determination theory model of intrinsic work motivation. Scandinavian journal of psychology, 56(4), pp.447-457.
Hi Ravi. Thanks and agree with your comment. As the employees have different motives, act in different ways and be motivated by different things, continuing a rewarding program which suit for all employees is difficult for managers (Eshun, 2011). Though the rewards are intrinsic or extrinsic, According to Atchinson (2003) it is important to focus on and understand the unique qualities of the individuals when tailoring rewards.
DeleteIt is enlightening to see new perceptive about Intrinsic Rewards and Extrinsic RewardsThe organization offer different benefits, rewards schemes. Satisfied employees become more devoted dedicated and attached with their organization as compared to other employees(Farzana, 2016)
ReplyDeleteHi Surangi. Thanks and agree with your comment. According to Zhao & Pan (2017), the motivated employees have the enthusiasm of work to meet the business and individual goals. There are number of strategies followed by managers to keep the employees motivated effectively (Kaur, 2013).
DeleteAgreeing with your points Gihan would like to emphasise which Armstrong explained on this context, Extrinsic rewards will give an immediate and powerful effect but it will not necessary last long, Intrinsic rewards which are concerned with the quality of working life(Armstrong,2006)
ReplyDeleteHi Manoj. Thanks and agree with your comment. Armstrong & Taylor (2020) highlights that the Human Resource Managers overcome that through developing total reward systems selecting both financial and non-financial rewards to spot the achievements.
DeleteHi Gihan, adding to your points, Further Intrinsic rewards where the self satisfaction and the sense of achievement that cannot be recognized as a tangible award, but satisfy the employee for the lifetime as a return on investment as per (Singh et al., 2009). Not only that but also motivating the employees in the intrinsic reward scheme will be able to produce the capable of encouraging both exploratory and exploitative
ReplyDeletebehavior across multiple episodes as well (Zheng, Oh, Hessel, Xu, Kroiss, Van Hasselt, Silver and Singh, 2020).
Hi Deshani. Thanks and agree with your comment. Deci & Ryan (1985) suggested that intrinsic motivation is identified which is developed based on the needs to be competent and self-determining, while extrinsic motivation likely to have a deeper and long-term effect because they are important in individuals and the work.
DeleteHi Gihan, Agreed. Many surveys and studies have strived to understand why people work. Psychologists Edward Deci and Richard Ryan identified six reasons: play, purpose, potential, emotional pressure, economic pressure, and inertia. (Amabile, T.M., 2015)
ReplyDeleteHi Purnima. Thanks and agree with your comment. According to Ryan (2000) the natural motivational tendency of people is a critical element in cognitive, social, and physical development because it is through acting on one’s inherent interests that one grows in knowledge and skills.
DeleteWell Gihan, Employee likes to work in an environment which their need are met, they will perform without any support (Kaur, 2013). Employees dissatisfaction is the main problem that decrease their motivation level therefor, management can improve motivation by giving relevant responsibilities to employees idea that, self-actualized employees deliver maximum work efficacy and creativity (Ozguner and Ozguner, 2014).
ReplyDelete