Intrinsic and Extrinsic Motivational Strategies

The aim of this study is to explore how both intrinsic (i.e. perceived enjoyment) and extrinsic (i.e. perceived usefulness) motivations can be use by team leaders to empower and motivate their teams to reach their fullest potential. Numerous theories were scrutinised in order to analyse the two theoretical concepts and their applicability to organisations. The outcome of the research suggested that there is no cohesive strategy, or “strategic fit” that would apply directly to a specific situation, instead it was conclude that in organisation creative people are motivated from within and respond better to intrinsic rewards than extrinsic ones.

Introduction

Since the 21th century, the study of motivation became one of the most complex and fascinating topics in organisational psychology (Muchinsky 1996). The different theories and conceptions about employee motivations and how leaders can use the available literatures to enhance their employee’s performance have been discussed by many researchers (e.g Krueger, 1996, Herzberg, Mausner & snyderman 1993). Motivating people at work is a crucial component of organisational behaviors and psychology. Leaders can use motivation to improve the physical and well-being of the organisation and its human capital, as a logical approach to enhance productivity and profitability (Hatch, 2002). Motivation is the inner drive that makes people act in a certain way (Herzberg, 1987), and it goes by the saying that “a well motivated and satisfied employee performed better than unsatisfied employees”.

Work motivation phenomenon

The pursuit for higher motivations at all levels of works has seemed treacherous in almost every organisational perspective. The unpredictability of human character and variegated mind-sets in human nature has made this phenomenon a challenging philosophy for every manager and researchers. Theoretical discussions gathered from the generalised conceptions of motivation argued how a team of people in different circumstances can meet with different stimulus; and what are the factors that energizes human behaviors and how these behaviors can be manage or channels to different directions.

During the 1930s, Lewin (1938) attempted to analyse some of the factors that affected employees degree of motivation, amongst the divergent set of factors examined, he came up with a suggestion that subject perceptions is the main cause for employees motivation and de-motivations. Studies done by Deci and Ryan (1985a) classify human motivations into two aspects, intrinsic and extrinsic motivation. The concepts of these two theories (intrinsic and extrinsic motivations) explain in details why a task is carried out and what type of motivational drive causes certain behaviours.

The concept of extrinsic and intrinsic

The concept of extrinsic and intrinsic motivation is quite problematic simply because the two theories work in opposition (Deci & Ryan, 1985a). More straightforwardly expressed, intrinsic motivation is driven by a person’s internal interest and desire to do something, such as curiosity, enjoyment, and sense of challenge. Extrinsic motivation comes from outside a person, such as reward, promotion, or deadline (Amabile, 1997).

Extrinsic motivational factors

Extrinsic motivational factors refer to the performing of an activity in order to achieve an external goal. Noels (2002) cited Deci & Ryan’s (1985a) self-determination theory which suggested that the external goals you strive for vary as to the extent of how much they are in fact self-determined. Extrinsic motivational factors serve mainly through monetary compensation, where wage, bonuses and result sharing are main applicators. When regard as such, an individual employment is merely a tool of satisfying direct or actual need by means of the money it generates (Frey and Osterloh, 2002).

Monetary & non-monetary motivational factors

Non-monetary motivational factors simply refer to symbolic issues such as work promotion, rewards, development training courses, health benefits etc. A leader can use this approach to motivate team members as the need for employee recognitions are crucial. Such rewards can leave a symbolic effect on employees and group solidarity, which may ultimately enhance team performance (Lawler, 1990).

Monetary motivation

On the other hand, monetary motivational factors have a substantial cost of extrinsic value. A team leader can use salary/pay rise, bonuses or stock options to get people motivated within a team or organisation.

Salary

According to Maslow’s hierarchy of needs theory (1943) salary increment is a proactive way to motivate employees. Herzberg (1993) believes that salary belongs to hygiene factors and can prevent job dissatisfactions. Lowering salary or salary demotion can significantly de-motivate employee’s enthusiasm. A leader can use salary increments or other forms of monetary rewards as a major strategy to influence employee job satisfaction (Lawler, 1990).

Bonuses and commission

Many organisations have adopted the means of bonuses and commissions to motivate employees in the organisation so that they could create synergy and reach the organisation goals (Lawler, 1990). It is often used to reach short term goals in order to stimulate the employee to work harder right away. Bonuses and commission are vital strategy especially when calculating people performances and contributions towards the organisation success (Hatch, 2002).

Collective & individual

A collective motivational factor mainly focuses on team performance targets. Leader can use this motivational factor to provide a team with a fair distributive justice; such as equal pays and bonuses. On the contrary, many managers use individual motivational factors to few members of the organisation and contingent on individual performances (Chen et al, 1999). In opposition to those provided to a group these tend to be very differential.

Intrinsic Motivational factors

Intrinsic motivational factors regarded as the core activities and motivators of job satisfaction. The person performing the task is motivated because he or she enjoys the challenge and is not pushed upon it by external reward or pressure. Intrinsic motivation occurs because it is said to provide satisfaction of inner psychological needs (Frey and Osterloh, 2002). These psychological needs can be divided into three essential aspects from which intrinsic motivation can derive from:

Job satisfaction

The phenomenon of job satisfaction ultimately derived from the two theories discussed in the above literatures; monetary and non-monetary factors. But more specifically, job satisfaction is more associated job enrichment, achievement, job security, well-being, work values, turnovers, responsibilities and autonomy (Mitchell et al, 2001). When job satisfaction is attained by an individual, the emphasis is furthermore not put on the culmination of the activity (i.e. the completion), but satisfaction is also obtained through the process resulting in the completion (Frey and Osterloh, 2002).

Rewards

The issue of rewards is one of the most complicated problems when creating a well functioning and motivating team. According to Hatch, (2002) rewards are major tools a leader can used to retain, attract, motivate and satisfy employees. The whole concept and essence of rewards is to improve effectiveness and efficiency. When leaders aligned rewards with the organisational goals, efficiency is enhanced (Stredwick John, 2000). And whiles organisational goals are achieved; it is likely that the employees achieved their own personal goals (Atkinson Anthony A et, al., 1997). It is quit complicating for leaders to rightfully suggest the rewards that would fit each employee within a team simply because people needs change as they enter new stages of their life/career (Hatch, 2002)

Personal goals achievement

It is not just organisational goals that are the only set targets by employees; people also aligned their own goals along with the organisation goals (Atkinson Anthony A et, al., 1997). Leaders in every works of life must assist and encourage their employees to set achievable personal goals to in order enhance their employees’ potential.

Discrepancies and comparisons between the two theories

Intrinsic versus extrinsic motivation

Since analysts figured that employees are the key success factors to every organisation, different strategies had been outlined on how firms can get the best from their employees. However, there is no cohesive strategy or “one-fit-all-strategy” that will determine employees’ work motivation.

In the late 1990s, Amabile’s (1997) investigates the comparisons and discrepancies between the two theories. Amabile’s research revealed that extrinsic motivation may combine with intrinsic motivation as a synergism instead of an antagonism under three conditions. Firstly, employees must be well devoted or be in a high intrinsic motivated state. A well devoted employee is like a loyal customer, regardless of the financial benefits or attractiveness; it is very unlikely that extrinsic motivation will undermine the intrinsic motivations.

Secondly, Amabile tend to be versatile in his theoretical concepts. She suggested that some aspect of extrinsic motivation must adhere to. He cascaded extrinsic motivations into three different components, such as; informational and enabling and referred to them as synergistic motivators, which implies competences or improve performance like rewards, feedback, and recognition that confirm competence or provide information on how to improve work-related performance. And controlling motivator which is a directive approach and can executed when employees are being told on how efficient the work can/could have been done.

Contrariwise, intrinsic motivations ignite a powerful inner drive or feelings of contentment that when employees meet their goals or undertaken activities they get total satisfactions.

Frey and Osterloh (2002) further expanded the studies of in intrinsic motivations and suggested five critical aspects which intrinsic motivation can derive from. The more complex, challenging and demanding the activity, the more complicating it is to pinpoint the requirements in a hard-and-fast job description, the more crucial intrinsic motivation becomes.” (Frey & Osterloh, 2002:21). Frey and Osterloh assumptions are:

Firm-Specific Pool Resources

Employee actions in an organisation have a tremendous ramification to the firm privies. Such actions may reflect and incorporate the company reputation, relationship with potential clients, corporate culture etc. In such circumstances, a self-centred employee with personal interest within an organisation may profit enormously from the organisation without making any contribution to the pool resources. It is quit difficult for leaders to satisfy or motivate such people; and their influences over other employees may de-motivate or hinder others work performances significantly (Konrad & Pfeffer, 1990; Greenberg, 1990). In such case, well devoted employees that are motivated intrinsically will unify and support the firm-specific resource pool (Frey & Osterloh, 2002).

Multi-Tasking

Employees are more intrinsically motivated when they are encouraged to explore and develop their potential, if they can perform multiple tasks within their organisation, (Frey & Osterloh, 2002). Such strategy unites employees and open new doors to team spirit. Consequently, the higher complexity and diversity the work signifies, the more imperative the intrinsic motivation becomes (Holmstrom & Milgrom, 1991).

Fuzzy Tasking

Whenever extrinsic compensation materialises, people mostly react unassumingly to the firmtarget goals. People will become unpredictable when they are faced with multiple alternatives and free choice among work targets; it is difficult to get them pursuing the challenging tasks (Frey & Osterloh, 2002). The more financial incentives that are introduced to some people, the more effortless they become and they can also easily quantify tasks to facilitate the monetary compensation. Such behaviours are not favourable for a highly competitive company.

The Transfer of Tacit Knowledge

The transfer of tacit knowledge is one of the most essential elements of the core competence that differentiate a firm from its competitors. People are intrinsically motivated when they possesses more tacit knowledge than explicit knowledge (Polanyi, 1985) as this can enable them to work and support others with the information and knowledge they have.

Creativity and Innovation

Creativity and innovations can nurture and harness employee’s involvement and motivations significantly. Frey and Osterloh (2002) believed that when people are extrinsically motivated, it reflects a negative effect on the learning curve and the innovation processes. Amabile, (1996, 1998) support the concept and opined that extrinsic motivation can severely pressure employees to produce, since results often are demanded for the compensation to redeem. Left behind is an inaccurate and less meticulous result, which has been affected strongly by a monitored and less creative way of inventing (Amabile, 1996).

Conclusion

From all the analysis scrutinised above we can see that these two motivational theories are under researched and underexplored as there is no cohesive strategy or “strategic fit” that is directly applicable to a specific circumstances. The theoretical conceptions about these theories argued above; point out that employees are motivated when they are driven by either internal or external interest, or desire to do something.

Hence human wants and mind-sets are variegated as they enter new stage of their life/career; it will remain a challenge for managers and researchers alike, to strategize the right rewards strategy that will applicable to all employees. However, from the analysis we can see that not all employees are intrinsically motivation, but creative people can seem to be more motivated from within and respond much better to intrinsic rewards that extrinsic ones. Depends on organisational specific; it is advisable that a team leader assess individual employees rewards needs and evaluate what strategies applicable for the team.