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Extrinsic Motivation

A behavior driven by external factors such as a reward or avoidance of negative outcomes

What is Extrinsic Motivation?

Extrinsic motivation is a behavior driven by external factors such as a reward or avoidance of negative outcomes. Money is the most obvious example of extrinsic motivation.

 

Extrinsic Motivation

 

Extrinsic motivation factors can be both tangible and intangible. Tangible factors are factors with a physical form. Any type of financial rewards can be an example of tangible factors. Conversely, intangible factors are abstract in their nature and lack a physical form. Examples of intangible external motivations include fame and praise.

 

Extrinsic vs. Intrinsic Motivation

Extrinsic and intrinsic motivation are two types of behavior stimulation. Extrinsic motivation is the stimulation of behavior through various external factors while intrinsic motivation is a behavioral catalyst driven by a desire for personal satisfaction or fulfillment. Note that both extrinsic and intrinsic motivation correspond with Maslow’s Hierarchy of Needs. Extrinsic motivation coincides with the safety needs in the hierarchy while intrinsic motivation concurs with esteem and self-actualization needs.

We cannot say that one form of motivation is better than the other. Both extrinsic and intrinsic motivation can effectively impact humans’ behavior and stimulate them to perform certain actions. It is also worth mentioning that the effectiveness of a particular type of motivation may vary among individuals. For example, some people tend to prefer external rewards more while others put a greater emphasis on personal satisfaction.

Generally, intrinsic motivation is highly regarded as the strongest incentive to achieve long-term objectives. If an individual possesses strong intrinsic motivation, it is very likely that he or she will complete a task. The caveat here is that a person cannot always be intrinsically motivated.

Unlike intrinsic motivation that can drive human’s behavior only in certain tasks or actions, extrinsic motivation comes with a larger number of potential applications. It is an effective stimulus to motivate a person to do a task in which he or she was not interested previously. Additionally, various studies show that praise can positively affect a person’s intrinsic motivation.

 

Extrinsic Motivation in Organizational Behavior

In organizational behavior, extrinsic motivation plays a crucial role in determining the actions and behavior models of a company’s employees. In every organization or company, employees are extrinsically motivated by the salaries they receive for their work. However, salary is not a single extrinsic motivation factor, since many organizations provide many other rewards such as bonuses, commissions, benefits (e.g., health benefits). We must also acknowledge that intangible extrinsic rewards such as praise and peer recognition are typically presented in many workplaces.

In the workplace, extrinsic rewards can be used to stimulate the interest of employees in tasks in which they are not initially interested. In addition, other sources of motivation typically encourage employees to acquire new knowledge and skills. Finally, the management of a company can use extrinsic rewards as a source of feedback regarding the performance of its employees.

Despite the fact that the external rewards are essential to motivate the company’s employees, a company must not rely solely on extrinsic motivation. If the company’s employees possess strong intrinsic motivation, they will likely to remain motivated for long periods of time. Furthermore, as mentioned above, the excess of external motivation may subsequently decrease the employees’ intrinsic motivation.

Therefore, every company or organization must carefully assess their workforce to understand their needs and to determine the optimal mix of extrinsic and intrinsic motivations.

 

More Resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Emotional Intelligence
  • Knowledge vs. Wisdom
  • Networking Guide (Part 1)
  • All Soft Skills Articles

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