Balancing extrinsic and intrinsic rewards

by Jo Ann Sweeney - 06:22 on 29 April 2014

Can a balance be found between extrinsic and intrinsic rewards do you think?

This is a great question, but one I struggle to say yes to because I’m not convinced a balance is ideal in most companies. Let me explain why.

I'll begin with what the two words mean. has a clear explanation of the difference between intrinsic and extrinsic motivation. In essence, extrinsic motivation involves doing something to gain an external reward, while intrinsic motivation means doing something for its own sake because it is personally rewarding.

Extrinsic Pros & Cons

Carrot and stick is the old name for extrinsic. Do what we want and we’ll give you a reward, do the opposite and we’ll punish you is the subliminal message people hear.

Daniel Pink, in his book Drive: The Surprising Truth About What Motivates People says extrinsic reward systems have seven deadly flaws. They can undermine performance, creativity, good behaviour and intrinsic motivation, as well as encouraging short termism, unethical behaviour and become addictive.

There are circumstances when extrinsic improves performance – when the task is routine, repetitive, uninteresting, or doesn’t require creative thinking. Pink calls these circumstances ‘special’ and advises alongside rewards to explain why the task is necessary, acknowledge it is boring and allow people to complete it in their own way.

Intrinsic Pros & Cons

Intrinsic works on the basis that most people will motivate themselves to do their best at work, with managers pointing them in the right direction. Its premise is that employees are given specific goals and allowed to decide how, when and where they achieve these goals.

Given the chance, intrinsic says, we will make the effort to get better and better at the things that matter to us until we master them. Give us a cause greater than ourselves and we will achieve even more. Tom’s Shoes and its One for One campaign perfectly illustrate this.

Continually Evaluate

Companies are different, people are different! The balance of extrinsic and intrinsic will vary by company. However, they only work in practice when we clearly understand what makes our employees tick. My experience is that this is rarely clear-cut. As leaders we need to experiment, continually evaluate results and be willing to change tactics.

A UK change communications consultant asked this question during the Worth Working Summit 2014. Though this year’s summit is now over, you can still join the discussions at our LinkedIn group Worth Working For. Please do join us and share your views.

Each week I share one small change I’ve found makes a big difference to communications through Transforming Tuesdays. Sign up for your copy here!

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