Employees’ motivation is essential for their performance at the workplaces. However, a good reward system is a source of motivation for workers. As a result, well-rewarded staff members work hard towards achieving the organizational goal, hence an increase in productivity. Also, the absenteeism rate reduces as they increase their loyalty to the company. When workers feel valued as assets, they raise their commitment to the firm. Consequently, their morale is boosted, thus working to achieve the set objectives. Besides, the spirit of teamwork in a firm is promoted by an effective reward system. However, the main types of reward systems are intrinsic and extrinsic awards. Intrinsic rewards refer to the personal satisfaction achieved by individuals from their career while extrinsic rewards are external rewards received as a result of tasks completed. The two types of awards are essential to both the organization and workers as their worth improves. For instance, in a situation where employees are required to take new or additional duties, the rewards in question support their attitude and behaviors. Additionally, they increase their creativity and problem-solving skills. The firm raises its production in return.
Intrinsic rewards
Intrinsic rewards refer to intangible awards that are connected to the workers emotionally. Autonomy, a condition of self-governance, is a form of an inherent reward. When an employee continuously gives better output to the organization, the supervisors accord them work freedom, thus taking less effort to manage them (Ozutku, 2012). Such workers feel valued hence working hard to retain the awarded status. As a result, they utilize their experience and intelligence to ensure that the granted freedom is maintained. Also, they improvise a different method of executing duties presented to them, hence becoming more creative and innovative. Consequently, their behavior changes positively and enables them to improve on their productivity. Due to this advancement, the worker becomes ready for additional or more challenging tasks. Subsequently, such employees acquire a sense of meaningfulness, which portrays the significance of their purpose in the company (Thomas, 2009). The accordance of more challenging duties provides an opportunity for them to undertake obligations of higher value.
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Additionally, one handling tasks related to their career line attains a personal growth, hence the advancement being a source of motivation. A career opportunity gives an employee a sense of development and expands their competence through experience gained. As a result, experience familiarizes an individual with different challenges, enabling them to satisfy skills acquired and develop others (UKessays, 2016). Such acquirements improve their creativity and problem-solving skills. Besides, their productivity increases thus giving them additional value. Due to a prolonged period in service, task handling skills of such individuals improves thus them in a better position to handle the new or more assignments. Allocation of more demanding duties indicates a high level of trust from the company to such staff members. Consequently, the worker’s morale and attitude are boosted, giving them more courage to handle their duties. Therefore, personal growth is an excellent intrinsic reward that can help a person become more competitive through value addition.
According to Wu (2014), a sense of achievement is also a form of intangible award. For individuals to handle their duties diligently, courage, skills, and hard work are required. Additionally, creativity is also essential in securing such an accomplishment. The number of accidents at the workplace needs to be minimized and teamwork enhanced. As a result, workers attain a feeling of joy after achievement. Besides, they possess a sense of progress, feels encouraged, and their confidence is boosted by knowing that they are moving in the right direction (Thomas, 2009). Additionally, such workers become more creative and improve their skills to ensure they keep accomplishing their duties effectively. Such activities prepare them to be in a better place to handle more complex tasks. Likewise, they can also be able to handle vast amounts of jobs hence increasing their productivity rate.
Extrinsic rewards
Unlike intrinsic, extrinsic rewards are visible and tangible and have a monetary value. They are meant to inspire and motivate employees who perform well on their duties. Besides, most managers use it for behavior conditioning and attitude support for their staff members (Cherry, 2019). For instance, money being an extrinsic award, a certain amount of cash reward can be set aside as a present for the worker with the highest attendance record. As a result, individuals ensure they improve on their work attendance behaviors with the aim of receiving the set reward. Consequently, their absenteeism behavior changes thus being available at their workplace for more tasks. Also, their workplace attendance attitude changes and they become more committed and focused towards attaining the organizational goals. Firm’s production rate also increases as a result thus enabling the firm to satisfy their demand and be more competitive.
Promotion based on individuals’ performance is one of the most effective extrinsic rewards. Some employees are more hardworking hence resulting to excellent performances, which improves the status of the organization. However, if such employees are not well-motivated, they might stop putting extra effort into their job and be average performers. Conversely, when motivated such workers become more loyal to the organization (Rasool, Jundong & Sohail, 2017). For instance, they might become more innovative and acquire more problem-solving skills to help them maintain the impressive performance. Handling such employees to new duties and responsibilities as a reward makes them feel valued and appreciated. As a result, they become encouraged to give more to the organization. Besides, the promotion being directly related to payment, power, and status increment inspires them more. Fair promotion strategies create competition in the organization thus increasing the performance rate.
Similarly, recognition is also a form of extrinsic reward that is capable of changing an individual’s attitude towards their job. Many staff members have a desire to be renowned in their workplaces. Subsequently, they feel rewarded when they are recognized by their supervisors, co-workers, and other members within the organization, for a task completed (UKessays, 2016). Therefore, managers in an organization should always recognize best performing employees for a mutual benefit. Once the management identifies and distinguishes a worker, the staff member strives harder to retain the title. Development of problem-solving skill is one of the initiatives that such employees can take to maintain the title. As a result, employees create a healthy competition within the firm hence setting high satisfaction scores for their customers. Giving shout-outs to the best performing individual is one way of recognizing them.
Conclusion
Generally, both extrinsic and intrinsic rewards are vital for both the employers and the employees in organizational performance improvement. Intrinsic motivation drives individuals to succeed in their ambitions and personal goals while extrinsic motivation is gained from external sources such as employers. Incentive pay is one of the most common and apparent extrinsic reward used in many companies. Subsequently, an organization with adequately motivated staff members reduces its labor cost due to the high performance from the willing workers. Also, such employees advance their creativity hence innovating new and practical problem-solving techniques. Besides, their limits expand, putting them in a better position to handle additional tasks, thus resulting in a boost on their value. However, if extrinsic rewards are not well managed, they might not be effective in changing individual behaviors for a long-term.
References
Cherry, K. (2019). What is extrinsic motivation? Retrieved from https://www.verywellmind.com/what-is-extrinsic-motivation-2795164
Ozutku, H. (2012). The Influence of Intrinsic and Extrinsic Rewards on Employee Results: An Empirical Analysis in Turkish Manufacturing Industry. Business and Economics Research Journal. Volume 3. Retrieved from http://www.berjournal.com/wp-content/plugins/downloads-manager/upload/BERJ%203(3)12%20Article%203%20pp.29-48.pdf
Rasool, A., Jundong, H., & Sohail, T. M. (2017). Relationship of Intrinsic and Extrinsic Rewards on Job Motivation and Job Satisfaction of Expatriates in China. Journal of Applied Sciences, 17: 116-125. Retrieved from https://scialert.net/fulltextmobile/?doi=jas.2017.116.125
Thomas, K. (2009). The four intrinsic rewards that drive employee engagement. Retrieved from https://iveybusinessjournal.com/publication/the-four-intrinsic-rewards-that-drive-employee-engagement/
UKessays. (2016). The impact of intrinsic and extrinsic rewards. Retrieved from https://www.ukessays.com/essays/business/the-impact-of-intrinsic-and-extrinsic-rewards-business-essay.php
Wu M. (2014). Intrinsic vs. Extrinsic rewards (and their differences from motivations). Retrieved https://community.khoros.com/t5/Science-of-Social-Blog/Intrinsic-vs-Extrinsic-Rewards-and-Their-Differences-from/ba-p/128969
