Extrinsic motivatoin: How to balance motivation?

Abstract

As a rather complex topic, that occurs in every area of business management motivation is an important topic to deal with, when managing projects, teams, and companies.

It can be categorized in intrinsic and extrinsic motivation. Intrinsic motivation relates to satisfying a personal need, where an individual acts out of personal reasons, which can be enjoyment. Extrinsic motivation is rooted in behaviour, that is enabled by external sources, such as pressure or reward.

The outcome of both types of motivations differs quite a lot depending on the environment. In general, intrinsic motivation is to be seen as the more successful one in the long run. Additionally extrinsic motivation is limited applicable and can even have a negative effect. Yet both are to be combined to derive the best results. . .

A certain amount of motivational behaviour results in a particular outcome. The challenge lies in achieving a sustainable positive outcome with the existing possibilities. The goal for this article is to analyse the topic of extrinsic motivation, to give a general guideline on how to enforce and use extrinsic motivation.

Background

Extrinsic motivation is a theory or tool on how to motivate people with external resources. This can be… In this context special focus will be put on how to motivate employees to deliver good sustainable work. Extrinsic motivation is a performance-related pay, which is executed by many companies. Since, a trend arises, of individual shaped rewards, this theory finds again more recent importance. People following extrinisc motivation can be roughly decategorized in either people who look to improve their status and people who seek to maximize the salary. Also, intrinsic behaviour has to be explained to differentiate both from each other. The room of application for extrinsic motivation is more clearly, when dealing with a target, that can be easily defined and measured. In case of an intangible result, intrinsic motivation is a better approach. "Management by motivation means selecting the most appropriate combination of intrinsic and extrinsic motivation.” </ref>. . Currently the theory does not find so much application. Very few recent sources deal with this topic. Actually, it seems a little outdated to research about, or it might be due to difficulties to catch the effect of motivational changes. These changes have led to a different weighting of the motivation tools. For example, employees put more importance to identify their personal interests with the company culture and vision, instead of being motivated by monetary arguments. A clear identification with the job and the company is an important key factor and working moral becomes more important. Since in the past decades things changed on how they are done in a company on the management level, there is a need to examine the source of motivation in a more recent approach. A more holistic approach, including aspects such as psychology or economics should be taken, to catch the whole potential of motivation and capture everything, that influences it. The development of the world market, identified by globalisation and changing in employee behaviour, also due to current global pandemic has led to many changes in the environment in which people want to work. (Bruno S. Frey· Margit Osterloh (Editors) Successful Management by Motivation Balancing Intrinsic and Extrinsic Incentives 2002) Another side effect of globalisation and digitalisation is the importance of data and knowledge. Both can be collected more easily and must be shared in a company internally to be of best use. As a result, a trust-based approach for a company culture is more important. The employees should be motivated on their own to exchange knowledge internally and not due to extrinsic reasons. It is undeniable, that the right motivation is leading to great success of a company. Highly motivated employees achieve better results. Several sources state the coexistence of extrinsic and intrinsic motivation to be direct compromise between those two. Both sorts of motivation need to be followed in order to meet goals the best. Extrinsic motivation is almost always a tool to fulfil another preceding need. From the salary, that you get at the end of the month, you will most likely invest a great amount, to fulfil another need. Therefore, extrinsic motivation comes from the need to satisfy indirectly another need, that is not related to work or the task that an employee is dealing with. As a result, the preceding effect becomes less important since the value is put on fulfilling another need.

Categorization

The history of different existing models and theories for motivation in management will be introduced here.

Field of application

Different fields for application is shown and in which frame to use the gained insights.

Challenges of study

How was the study limited in it´s execution, how are the results limited to use.

Annotated bibliography

1. Sansone, C. and Tang, Y., 2021. Intrinsic and extrinsic motivation and self-determination theory. Motivation Science, 7(2)

2. Narasimhan, K., 2002. Successful Management by Motivation: Balancing Intrinsic and Extrinsic Incentives20022Edited by Bruno S. Frey and Margit Osterloh. Successful Management by Motivation: Balancing Intrinsic and Extrinsic Incentives. Springer‐Verlag, 2002. 299 pp., ISBN: ISBN 3‐540‐42401‐6 £33.00 (hardback). The TQM Magazine, 14(2).

3. Kuvaas, B., Buch, R., Weibel, A., Dysvik, A. and Nerstad, C., 2017. Do intrinsic and extrinsic motivation relate differently to employee outcomes?. Journal of Economic Psychology, 61, pp.244-258.