Extrinsic rewards

Definition

Extrinsic rewards are tangible benefits or incentives that are provided to individuals in recognition of their performance, behavior, or achievements. These rewards often come from external sources, such as employers or organizations, and can include things like bonuses, promotions, gifts, or public recognition. They play a significant role in motivating individuals to achieve goals and can help reinforce positive behaviors within recognition and reward systems.

5 Must Know Facts For Your Next Test

1. Extrinsic rewards can boost motivation and performance by providing clear incentives for individuals to meet specific goals.
2. Common forms of extrinsic rewards include salary increases, bonuses, employee recognition programs, and awards.
3. While extrinsic rewards can be effective in driving short-term motivation, they may not sustain long-term engagement without accompanying intrinsic motivation.
4. Extrinsic rewards can sometimes lead to a focus on external validation rather than personal satisfaction, impacting overall job satisfaction.
5. The effectiveness of extrinsic rewards can vary based on individual preferences and the nature of the task being performed.

Review Questions

• How do extrinsic rewards influence individual motivation in a workplace setting?
  • Extrinsic rewards significantly influence individual motivation by providing tangible incentives for achieving specific goals or performing well. When employees see clear benefits such as bonuses or recognition for their efforts, it can enhance their drive to perform better. However, the effectiveness of these rewards can depend on individual preferences and whether they align with personal values.
• Discuss the potential drawbacks of relying solely on extrinsic rewards for employee motivation.
  • Relying solely on extrinsic rewards for motivation can lead to several drawbacks, including diminished intrinsic motivation and job satisfaction. Employees may become overly focused on external validation and incentives rather than finding personal fulfillment in their work. This shift can create a cycle where individuals only perform well when they expect a reward, undermining their natural drive to excel in their roles.
• Evaluate the balance between intrinsic and extrinsic rewards in creating an effective recognition and reward system.
  • Creating an effective recognition and reward system requires a careful balance between intrinsic and extrinsic rewards. While extrinsic rewards can drive immediate performance and provide clear incentives, intrinsic rewards foster deeper engagement and long-term satisfaction. Organizations that integrate both types of rewards are likely to cultivate a motivated workforce that feels appreciated for both their external achievements and internal growth, leading to higher overall productivity and employee retention.

Related terms

intrinsic rewards: Intrinsic rewards refer to the internal satisfaction and personal fulfillment one experiences from performing a task or achieving a goal, rather than from external incentives.

motivation: Motivation is the process that initiates, guides, and maintains goal-oriented behaviors, driven by both intrinsic and extrinsic factors.

performance appraisal: Performance appraisal is the systematic evaluation of an employee's job performance and contributions to an organization, often influencing the distribution of extrinsic rewards.