In an Extrinsic Motivation the incentive for people to perform an activity is provided by something or someone else. In a work environment people work out of extrinsic motivation, because they expect an external reward for their action. This could be a salary, the appreciation of stakeholders as well as missing out a punishment as disgracing oneself for example. In contrast there is the intrinsic motivation, where people perform activities out of enjoyment, competence and curiosity of the task itself. This could be playing football, because someone enjoys doing it.
Studies show, that intrinsic motivation keeps people engaged longterm and to a higher degree than extrinsic motivation. However missing extrinsic motivation discourages people performing and should therefore not be missed out on. . Extrinsic motivation can undermine intrinsic motivation if it is not provided in an according way, as explained in the next chapter. So in order to keep employees most motivated it is important to provide extrinsic motivation, but suitable for each individual. This is addressed in the chapter application.
In psychology, extrinsic motivation is seen as the drive to lessen thirst, hunger, pain/anxiety and sex. Following this, intrinsic motivation consists of all nonsurvival needs and ego motives. . In the field of project, programm and portfolio management the definition of doing things out of the incentive of an external reward is more reasonable. Since the theory of a dualism extrinsic-intrinsic does not describe the ranges of motivation a human can have, there are motivations in between consisting of both motivation types. To differentiate these better we differ 6 different subtypes: there is the amotivation, four subtypes of extrinsic motivation and intrinsic motivation. The leading style should be according to these different subtypes as every motivation type is fostered in a different way and best for a different work environment. This is explained in the chapter subtypes of motivation .
Research shows, that extrinsic motivation undermines intrinsic motivation. People getting extrinsic rewards are losing part of their intrinsic motivation . Intrinsic motivation comes out of the psychological needs for autonomy, competence and relatedness. Because people enjoy their activities the most if they are not forced to do it (autonomy). Having the feeling oneself owns the skillset, that is necessary to tackle a problem (competence) and have the activity in line with their personal believes, values and their sense of self (relatedness). Following positive feedback can improve an employees feeling for competence and therefore intrinsic motivation. In contrast negative feedback decreases it. Giving out external rewards as a salary to an employee is attached to the contract to do work to agreed conditions. This reduces an employees autonomy and therefore his/her intrinsic motivation. Linking salary to performance, deadlines and KPIs, increases control and decreases autonomy furthermore. This is the reason extrinsic motivation undermines intrinsic one, called the crowding-out effect. As intrinsic and extrinsic motivation interfere with each other they can not be added up, rather have to be looked at more precisely.
To fulfill their third psychological need of 'relatedness' people take external influences and internalize them, making them contribute to their intrinsic motivation. This automatic process of internalization leads to different subtypes of extrinsic motivation, making a mixture of intrinsic and extrinsic motivation. Explained in the next chapter .
Subtypes of Motivation
Internalization means taking external stimuli and making them internal motivators. Doing this they belong to the sense of self of the human, being more related to it. If this happens extrinsic motivators become intrinsic ones. In this way the employee can be more autonomous and get a higher level of intrinsic motivation. To describe the mixes of intrinsic and extrinsic motivation in a good way we can use the dual concept of autonomy vs. controlled. Fully autonomous being the highest intrinsic motivation doing task out of pure joy. And fully controlled, doing tasks out of extrinsic motivation to achieve a goal not connected to the task directly.
In between there are levels, that are somewhat controlled and autonomous. Intrinsic and extrinsic motivation can not be divided to the fullest in the real world. Motivation is always a mix of both. The share of intrinsic and extrinsic motivation can vary a lot tough.
Amotivation is perceived as nonrelevance, the person is lacking competence and/or value, the person does not work at all. There is neither extrinsic nor intrinsic motivation.
The first classifying of extrinsic motivation is external regulation. Persons are doing tasks, because they purely expect external rewards or want to omit punishment. This type is experienced as controlled and non-autonomous. If the external motivator is dropped people lose all their motivation and become amotivated.
The second, introjected regulation consists of mostly external stimuli still, however some aspects are internalized already. Aspects could be, that appreciation is expected from principals and colleagues. The ego is the most important incentive in this type.
In the 'Identified Regulation' subtype work is done in a regulated, so still controlled way. Tasks are performed out of mostly extrinsic and little intrinsic motivation. It has been internalized to some degree. The given tasks are of personal importance and employees support it out of their own believe. Their sense of self can identify with the work.
Here the personal believe and values are totally in line with the provided work. The employee can identify completely with it. The autonomy is still high as the employee does not feel forced to do something. Integrated Regulation is still an extrinsic motivation as the task is provided and rewarded external.
At the intrinsic motivation people are incentivized out of the pure enjoyment they get out of performing the task. People have an interest in the activity and get satisfaction out of it. This is the motivation with the highest quality. It is lasting over a longer timeframe and a good mood and working atmosphere is experienced. 
The Project Management Institute explains three different theories called X,Y and Z to explain the incentive of people to work and following their best management styles. .
Theory X assumes the only incentives given are extrinsic ones like salary or the perception of their co-workers. Employees have not internalized any incentives. Therefore most do the minimum to fulfill the requirements of the job, as there is no interest in performing the work itself well. The motivation is externally regulated. The work environment in this theory is therefore controlled and non-autonomous, to check the quality of the work. To motivate a hands-on top-down approach suits best, to give a clear overview which tasks have to be done. This can be mostly seen in labor intensive professions or hierarchic company structures.
In Theory Y employees internalized the extrinsic motivator into somewhat intrinsic. They want to perform good out of ego motives and see a purpose in their work and the companies corporate identity. Nevertheless the extrinisc motivation still is important for the motivation. The motivation can be described as introjected or identification. The leading style should be personal and supportive to guide people performing their tasks. But also providing space for them to bring in their own ideas and work autonomous on things they think will contribute to the overall work. This can be very effective, as they know best the areas they can improve in their daily work. A regular exchange of opinions should be appreciated and constructive discussion fostered. In skilled labour and creative work environments, this management style is most common.
Theory Z assumes employees are motivated out of integration or fully intrinsic motivation. The incentive to work is out of purpose. The values are in line with their personal believes. Therefore the motivation is really high and people will work when needed to fulfill the goals, this also means putting in extra hours. The management style should be very open to discussions, as people themselves want the company to succeed and come up with constructive ideas to improve and move further. This is the most productive work environment with the highest satisfaction for the company and employees.
Extrinsic Motivation in an Work Environment
As explained earlier intrinsic and extrinsic motivation are closely related. Extrinsic motivation can undermine intrinsic one or further enhance it. To motivate people and get them to their best performance we have to distinguish extrinsic motivators more closely into directly performance-salient or indirectly performance-salient incentives. Directly performance-salient incentives link the motivator directly to the performance. This could be a commission on sales or a bonus given out if a target is achieved. An indirectly performance-salient incentive is still linked to performance, but does not have a strong connection to it. A good example is a base salary that is linked to the work. Here a better or worse performance will not change the outcome for the individual. Directly linked incentives show people a strong connection between performance and the incentive. So there is a strong extrinsic incentive to perform. This leads to a focus on the set target, as it is the only indicator determining their personal outcome. A disadvantage might be, that people may lose track of other important tasks that also contribute to the company goals, as they focus most on the set goal to boost their outcome. The targets setting should be therefore precise and in line with all values and visions the company has. In our example getting commission for sales the target the employees get evaluated on should be on quality and satisfaction of the customer also and not just on the quantity. The intrinsic motivation will be weakened as the extrinsic one becomes more dominant. This is also known as the crowding-out effect. As indirectly linked incentives are not linked to the performance that much they do not interfere with intrinsic motivation a lot. People with indirectly incentives tend to perform their task out of importance and personal choice .
Companies have to decide the way they want to provide their incentives. A clear vision and mission is essential to provide people with a ground for internalizing the extrinsic motivators for themselfes. A strong corporate identity helps people finding an employer matching their own values and believes. This can provide a strong baseline of intrinsic motivation that supports motivation a lot. Furthermore it is possible to provide people with less extrinsic motivation as they do not rely on it that much. But every work environment has to provide salary to hire people, excluding some NGOs and companies, that provide high intrinsic motivation and prestige to their staff. As it is a necessity, providing this extrinsic motivation should be done in the best possible way.
For tasks, that are noncomplex, repetitive and need a high focus the quantity is the most important performance index. For gaining the highest outcomes, directly performance-salient incentives are very good. It directs the attention solely to the provided task. For example for glass installation  If a task requires more autonomous work, that can not be described precisely, it is more important to keep intrinsic motivation and give extrinsic motivation by indirect performance-related incentives. Here quality is much more important. In order to perform, a broad view needs to be kept and different approaches have to be taken. Therefore an incentive that focuses on one specific indicator is not suitable. It fosters focus and cuts creativity. For example, if teachers get a bonus underlying to the performance of their students, they do not perform better . Or doctors getting their bonus indicated by the outcomes of their patients do not have healthier patients 
All these implications have to be seen as the basic concept of intrinsic and extrinsic motivation. A extrinsic motivator may undermine intrinsic motivation, but if it is strong enough there will be still an increase in overall motivation. Most studies argue extrinsic motivations can be very powerful. The concern regarding those is to erode intrinsic motivation and once the extrinsic might be temporarily, like the appreciation of others, the overall motivation will be much lower afterwards.
Leader Autonomy Support
For the motivation the role of the leader or manager is vital. According to the management style both intrinsic and extrinsic motivation can be increased and decreased. Slem, et al. (2018) analysis the effect of an implemented Leader Autonomy Support (LAS). To conclude the outcome of this management style is very positive. As seen earlier this autonomous management style is better suited for difficult non-repetive task, that need a high level of autonomy.
Following several studies the performance of people tends to be better if they operate in a supportive social environment. Investment bankers responded with better performance and well-being if their managers were autonomy supportive. When the medical instructors focused on the needs and autonomy of their students the students learned their topic with a deeper understanding. When this was done in a more controlled way, the students were better at remembering facts. This shows the teachers influence of giving the student autonomy and fostering thereby the intrinsic motivation. By monitoring it more closely the extrinsic motivation is higher. .
To foster internalization of extrinsic motivators managers can use Leader autonomy support (LAS). It provides supervisory behaviors to improve motivation. This approach is defined by support and understanding. The feelings for autonomy, competence and relatedness are supported in order to provide higher autonomy and give the opportunity the internalize. The manager is interested in the opinions of his/her employees, let them discuss and make decisions, encourage employees to take the initiative, avoid extrinsic motivations and punishments. This lead to more performance, engagement and well-being  .
The provided article sets up a framework to understand extrinsic motivation within overall, intrinsic and amotivation. Within this subject we can provide guidelines to manage and foster motivation in specific work environments and situations. However these guidelines have to be adapted to the specific work situations. A good manager has a lot of empathy and understanding for the employees and their perspectives, to manage them in the appropriate manner. As this is a tacit knowledge it can only be perceived by communication with others and learned on the job. In all analysis which motivation type the best suitable is, we should not forget that in real life every motivation is made up of a mixture of both intrinsic and extrinsic motivation. They are closely related to each other and interfere/correlate with each other. Therefore we can not put up the effect of one specific motivation type. Another limitation is, that every individual is motivated more or less by different motivation types. Some individuals may be very intrinsic driven other prefer extrinsic more. This has to be considered when motivating colleagues. Mostly decisions will be made for the whole organization or department so in most cases it is not possible to motivate every individual in his most appealing kind. Also people respond very differently to leadership styles, as everybody has different knowledge and previous experience. A lack of motivation can have very different reasons, a person can be unconcentrated due to physical needs or a difficult private situation in life affecting the work performance. There are many more reasons, that can not be targeted by the intrinsic and extrinsic motivation provided at the workplace itself .
1. Project Management Institute Inc. (PMI) (2021), A Guide to the Project Management Body of Knowledge (PMBOK ® Guide) – 7th Edition and The Standard for Project Management, Project Management Institute, Inc. (PMI), Pennsylvania.
In this book you can find the definition of extrinsic motivation based on official Project Management Guidelines. Furthermore The Project Management Institute provides a basic understanding of both intrinsic and extrinsic motivation types and how they should be used. It is a good start into the topic for people, that do not have any pre knowledge to the topic of motivation and the difference between intrinsic and extrinsic motivator types. This helps a lot later to decide, which types should be used in practice to improve performance and well-being of colleagues.
2. Richard M. Ryan, Edward L. Deci (2020), Contemporary Educational Psychology, Volume 61. Intrinsic and extrinsic motivation from a self-determination theory perspective: Definitions, theory, practices, and future directions.
Deci provides a lot of good books and articles on the Self-Determination Theory, that explains the reasons people are motivated at all. He explains in a very good manner the different subtypes of motivation that range from amotivation to extrinsic motiavtion and intrinsic motivation. This gives a very good understanding of the different motivation mixtures people have in the real world. Ryan and Deci explain the psychological factors of autonomy, competence and relatedness, that motivate people. This is a very good baseline to understand peoples motivators in a work environment as well as in the everyday life.
3. Slemp, G.R., Kern, M.L., Patrick, K.J. et al. (2018), Leader autonomy support in the workplace: A meta-analytic review. Motiv Emot 42, 706–724.
Slemp et al. bring together a lot of interesting studies and perform a meta analysis on their findings. It discusses wether the Leader autonomy support LAS is a suitable management approach in a work environment. It concludes, that the style is a good one to foster performance and well-being of the employees bringing higher overall satisfaction. The study points out the advantages and disadvantages for a leader to use LAS. A critice of the concept though is, that it needs a lot of ressources to action.
- ↑ 1.0 1.1 1.2 1.3 Project Management Institute, Inc. (PMI),(2021). Pennsylvania. A Guide to the Project Management Body of Knowledge (PMBOK ® Guide).
- ↑ 2.0 2.1 Reiss, S. (2012), Teaching of Psychology, 39(2), pp. 152–156, Intrinsic and Extrinsic Motivation. doi: 10.1177/0098628312437704.
- ↑ Deci, E.L. (1971). Effects of externally mediated rewards on intrinsic motivation. Journal of Personality and Social Psychology 18. 105–115
- ↑ 4.0 4.1 Deci, E. L., & Ryan, R. M. (2015). Self-Determination Theory. International Encyclopedia of the Social and Behavioral Sciences: Second Edition, 486–491. https://doi.org/10.1016/B978-0-08-097086-8.26036-4
- ↑ 5.0 5.1 own figure, Elia Paul Simon(2022)
- ↑ 6.0 6.1 Richard M. Ryan, Edward L. Deci, (2020) Contemporary Educational Psychology, Volume 61. Intrinsic and extrinsic motivation from a self-determination theory perspective: Definitions, theory, practices, and future directions. ISSN 0361-476X, https://doi.org/10.1016/j.cedpsych.2020.101860
- ↑ 7.0 7.1 7.2 Christopher P. Cerasoli, Jessica M. Nicklin, Michael Thomas Ford (2014), "Intrinsic motivation and extrinsic incentives jointly predict performance: a 40-year meta-analysis", Psychological bulletin, Volume 140, 980-1008
- ↑ Lazear, E. P. (2000). Performance pay and productivity. The American Economic Review,Volume 90, 1346 –1361, doi:10.1257/aer.90.5.1346
- ↑ Springer, M. G., Ballou, D., Hamilton, L., Le, V., Lockwood, J. R., McCaffrey, D. F., Stecher, B. M. (2011). Teacher pay for performance: Experimental evidence from the Project on Incentives in Teaching
- ↑ Petersen, L. A., Woodard, L. D., Urech, T., Daw, C., & Sookanan, S. (2006). Does pay-for-performance improve the quality of health care? Annals of Internal Medicine,Volume 145, 265–272. doi:10.7326/0003-4819-145-4-200608150-00006
- ↑ 11.0 11.1 Slemp, G.R., Kern, M.L., Patrick, K.J. et al. (2018) Leader autonomy support in the workplace: A meta-analytic review. Motiv Emot 42, 706–724. https://doi.org/10.1007/s11031-018-9698-y
- ↑ Baard, P. P., Deci, E. L., & Ryan, R. M. (2004). Intrinsic need satisfaction: A motivational basis of performance and well-being in two work settings. Journal of Applied Social Psychology, 34(10), 2045–2068