li805xs managerial insight paper

Running head: INTRINSIC AND EXTRINSIC 1

The Role of Intrinsic and Extrinsic Motivation in Management

Christina Magnifico

Emporia State University

Author Note

Paper for LI805XS: Management and Information Organizations, Prof. Rajesh Singh.

INTRINSIC AND EXTRINSIC 2

Abstract

This paper contains a review of the business, management, and information science literature

with a focus on how intrinsic and extrinsic motivators affect the working environment, and how

managers can use both motivators to create cohesive teams. This review defines intrinsic and

extrinsic motivation, and shows that the concept of motivators can be applied to management in

order to foster respectful work environments and increase overall team performance.

Keywords: intrinsic motivation, extrinsic motivation, management


The Role of Intrinsic and Extrinsic Motivation in Management

The role of manager is difficult, especially in an increasingly collaborative work environment. A

combination of workplace dynamics, eclectic team compositions, and the need to work both effectively

and efficiently, has created the need within organizations for strong leadership. As a manager, one has to

build a sense of job satisfaction [which helps] employees understand how the results of their work

benefit the company, or the community (Root, n.d.). This understanding allows employees to see the

value in their contributions and can often help them build confidence which ultimately improves work

performance. Managers can use both intrinsic and extrinsic motivation in order to achieve the desired

cohesiveness amongst their teams. Both are sources of motivation that, according to Ankli and Palliam

(2012) develop employees self-images, or perception of self. An employees perception of themselves

is based on their psychological and emotional needs, life goals and aspirations, individual dynamism,

culture and the impact of social environments (Ankli and Palliam, 2012). When employees see

themselves in a positive light, a higher level of self-actualization, the end product is a happier and more

productive team. This means that, according to Deci & Ryan, motivation is actually a group of different

types of driving forces rather than a singular construct (as cited in Robinson et al., 2012, p. 1).

Managers must be careful, however, to make sure there is a balance between both intrinsic and

extrinsic motivation. In fact, research has shown that too much extrinsic motivation can actually lead to

less intrinsic motivation and thus a less productive team (Benabou and Tirole, 2003; Dysvik and Kuvaas,

2013; Lin, 2007; London, 2009; Moore, n.d.; Sun Young Sun & Jim Nam Choi, 2009; Thomas, 2009).

Managers must also be careful not to stress extrinsic motivation, and instead should focus on intrinsic

motivators which may actually correlate to improved job performance (Moore, n.d). Though some

individuals are motivated internally and have a natural drive that propels them forward, others may need

more of a tangible push in the right direction. The ability to motivate without overwhelming or causing

anxiety within a team is a key component of management, and is the responsibility of the organizations

administration who should provide employees with the proper leadership and tools to be successful.


Defining Intrinsic and Extrinsic Motivation

Motivation is the driving force behind an individual engaging in any activity. There are

different levels, kinds and amounts of motivation (Ryan and Deci, 2000) which all play a

deciding factor in how motivated or unmotivated an individual is. For example, a library school

student may be highly motivated to finish their degree in order to prove to themselves that they

have what it takes to achieve a graduate degree. Another student in the same program, however,

may be driven by the fact that she will receive a salary increase once she completes her graduate

degree. While both students are highly motivated, they are obviously motivated by different

things. So what is the difference between intrinsic motivation and extrinsic motivation? There

are a multitude of theories and a plethora of studies that have been done regarding intrinsic and

extrinsic motivation, with definitions of both developed from years of research.

Defining Intrinsic Motivation and Motivators

According to Deci and Ryan (2000) intrinsic motivation is defined as the doing of an activity

for its inherent satisfactions rather than for some separable consequence (p. 56). They further

explain it by stating that, intrinsic motivation is based on the need for competence and self-

determination [and that while it may not be] a primary drive, it energizes behavior and is vital to

human function (as cited in London, 2009, p. 5). Intrinsic motivation was first discovered and

explored in 1959 in an experiment focusing on animal behavior (Ryan and Deci, 2000).

Specifically researchers observed that many of their test subjects participated in playful

behaviors even though they were not guaranteed a reward. Through these observations, they

hypothesized that the unprompted behaviors were performed solely for the positive reactions and

experiences that came from challenging oneself. This shows that although there are internal

factors driving individual decision-making, there is a correlation between individuals and the


activities they perform. Since this initial study, other studies such as Lee et. al. (2012) have

shown, through neurophysiological imaging, that intrinsic motivation is actually a complex

neurophysiological activity wherein an individual goes through an intense psychological process

that stems from inherent feelings.

Intrinsic motivation can be broken down into rewards and even further into levels of

rewards. Thomas (2009) identified the four (4) rewards in the Ivey Business Journal:

1. Sense of meaningfulness

2. Sense of choice

3. Sense of competence

4. Sense of progress

The first reward, the sense of meaningfulness, encompasses the broad idea of purpose and the

feeling of self-worth. Meaningfulness, in terms of work, allows an individual employee to

understand their value within the organization, and this is a key component in the building of a

successful team. The second reward, the sense of choice, acknowledges that individuals should

be allowed the freedom to choose how they complete their work. As with meaningfulness, choice

provides individuals with a sense of ownership and appreciation. Choice is similarif not

identical toautonomy, which is the degree to which a person feel they have freedom and can

use their discretion to schedule the work they have planned to do (London, 2009). The third

reward, the sense of competence, is the intrinsic aspect which helps an individual feel a sense of

satisfaction about their work. The fourth reward, the sense of progress, encourages an individual

to continue on the right path by making positive, confidence-boosting decisions. All four of these

rewards make up the basic intrinsic profile. The sub-levels of each reward are further separated


into three ranges or levels. These ranges, according to Thomas (2009) are: high-range, middle-

range, and low-range; each describes the intensity of the reward.

Unlike extrinsic motivation, there is a relatively small chance of employee burnout with

intrinsic motivation and it is seen as a sustainable source of employee motivation (Thomas,

2009). It has been shown that overall intrinsic rewards seem to create a strong, win-win form of

motivation for both an organization and its employees (Thomas, 2009).

Defining Extrinsic Motivation and Motivators

Extrinsic motivation is defined by London (2009) as doing something because it leads to a

separable outcome[which means] that outside encouragement or rewards are earned from

performing a task rather than actual enjoyment of the task. As far as extrinsic motivation within

the workforce, pay and salary are often cited as examples of ways to extrinsically motivate

employees. Money, however, is not the only motivator that is considered extrinsic. Factors such

as company characteristics, type of work, job security, and advancement opportunities are also

considered extrinsic motivators (London, 2009). In a more recent study by Cummings and

Worley (as cited in London, 2009) extrinsic rewards were defined as pay, stock options, bonuses,

gain sharing, promotions and benefits (p.3). Though most factors ascribed to extrinsic

motivation appear to be materialistic and due to the fact that, as Ryan and Deci (2000) stated:

extrinsically motivated behaviors are not inherently interesting and thus must initially

be externally prompted, the primary reason people are likely to be willing to do behaviors

is that they are valued by significant other to whom they feel (or would like to feel)

connected, whether that be family, a peer group, or a society. (64)

In a study by OConnor (2005), six (6) different external factors developed from a review of the

literature. The six (6) external factors that were identified in the literature include: collective


efficacy, social rewards and sanctions, social dilemmas, social loafing, future interdependence,

and social identity (p. 136). The first, collective efficacy can be described as similar to group

buy-in (OConnor, 2005, p.5). This is when an individual has confidence that their contributions

within their team results in clear achievements of team goals. The second factor is the concept of

social rewards and sanctions, which describes the level of acceptance an individual feels in

regards to their social groups. The third factor is called a social dilemma, or a difficult situation

among team members. Factor number four (4), social loafing, occurs when an individual takes

the lack of accountability within an organization to the extreme. Future interdependence, the fifth

(5) factor, is the potential that individuals have for working with or collaborating with people in

the future. The last factor, social identity, is a high-level concept that describes what individuals

share within an ingroup but not with members of an outgroup (p.138).

Though many would assume that extrinsic motivators are more useful than intrinsic

motivators, an interesting study by Robinson et. al (2012) which explored the effects of

payment on neuropsychological test performance in healthy adults (p. 243) showed that while

extrinsic motivators do have positive effects on spatial memory (p.248) and overall

performance, they do not have an effect on those who had higher internal motivation (p.248).

In fact, those who had more inherent intrinsic motivation were less susceptible to the external

motivation of financial intervention (p.248). Other studies by Deci and Ryan (as cited in

London, 2009) found that intrinsic motivation makes an individual much more likely to be

motivated and perform well as opposed to those that were extrinsically motivated in fact,

intrinsic factors may increase satisfaction, organizational commitment, and satisfaction (p.7).

While it may seem like extrinsic motivation does not have as much of a place in an organization

as intrinsic motivation, the ability to strike a balance between both is a fine art.


Utilizing Intrinsic and Extrinsic Motivation in Management

In order to utilize both intrinsic and motivation within an organization especially at the

managerial level the organizations leadership has to understand which employees are

motivated by external factors and which employees are motivated by more internal factors. A

1986 study of 1,000 industrial employees by Kovach (Table I.) showed that over time motivation

moved from intrinsic motivation to extrinsic motivation over the course of forty years (as cited in

Wiley, 1997, p. 267).

Table 1: From 1987 Kovach study.

In the workplace, intrinsic motivation can be applied to determine how much a person

enjoys doing their job (London, 2009). This means that a manager should insure that all

employees feel that their work within the organization is valuable, by providing feedback and

showing appreciation for projects completed. In fact, Wiley (1997) talks about feedback as

motivation:

People need to have feedback concerning their work and they need to feel competent.

According to the ranking of motivation factors in this survey, employees may consider

goof wages to be solid feedback concerning their work as well as a reward for their

ability or competence. Rewards, such as wages, that reflect ability may lead to greater

intrinsic motivation. This indicates that it is not necessarily the reward itself that


determines how people respond, but rather the type of feedback implied by the reward. (p.

272)

Managers must also make sure they challenge their employees in order to make their work

interesting. This means that the manager must provide opportunities for people to be motivated

to achieve (Wiley, 1997). These opportunities must be presented differently, due to the different

motivational values instilled in each employee, and it is the job of the manager to determine the

most efficient way to disseminate both opportunities and feedback to their employees.

Many managers use intrinsic and extrinsic motivation to reinforce team composition [in

order to] maximize the various skills and talents of their members (Wiley, 1997). One way

managers can select team composition is to use motivational values in a way similar to

StrengthsFinder 2.0, this allows them to build a team that is both diverse and has the ability to be

motivated by a variety of factors.

Conclusion

Both intrinsic and extrinsic motivations are important tools in every managers managerial

toolbox. When dealing with diverse groups of people who must work collaboratively, every

manager must remember that employees are motivated by different things. They must, however,

also remember that in order to foster a productive and efficient environment, they need to

reinforce positive employee behaviors through the use of different motivational techniques.

These techniques, whether focused intrinsically or extrinsically, must serve to motivate, engage,

and promote self-esteem within their teams. While intrinsic and extrinsic motivation may not be

the only tools a manager can use to motivate their employees, they can be some of the most

effective ways to maximize team efficiency and cohesion.


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