There has been a significant amount of research on the merits of intrinsic versus extrinsic motivation (see Eisenberger, Deci, Ryan, Locke, Latham, Kohn, and now Dan Pink…). Both sides of the controversy claim that their favored motivational drive is best. In my opinion, they are both barking up the wrong tree.
It has been shown empirically that both types of motivation drive behavior. In the real world, both extrinsic and intrinsic motivations are utilized in almost all work situations. I don’t know of any work place that doesn’t provide employees with some type of pay and most have some sort of variable pay. I also don’t know of a workplace where there isn’t a focus on (or at least lip service to) improving how jobs are structured for greater engagement or how leaders can inspire their employees. However, the real discussion should be on how to leverage both forms of motivation to get the behavior change that is needed.
The main issue in this debate focuses around the general impact that extrinsic reward has on intrinsic motivation. Both sides of the debate admit that in certain circumstances extrinsic rewards can either have a detrimental or positive impact on intrinsic motivation. The issue that businesses face is how to create incentives that not only drive immediate performance but also have a positive influence on intrinsic motivation. The discussion needs to be not on an either/or type scenario, but on how do we leverage the power of both.
Research shows that the way incentive plans are structured can significantly influence how they are perceived by employees and thus how they alter one’s intrinsic motivation. Cognitive evaluation theory (CET) theorizes that an individual’s perceived feeling of autonomy and competence are determinants of that individual’s level of intrinsic motivation. Incentive programs that reduce these perceptions of autonomy and competence are more likely to decrease intrinsic motivation – while incentive programs that increase these feelings are more likely to increase intrinsic motivation. So what does this really mean?
Based on the research, the use of performance-contingent rewards (rewards are given only for achieving a set level of performance) would be preferred over other types of reward contingencies (do this – get that). In fact, incentive programs that provide progressively harder goals (and increased payout) for achievement would be even better because earning the rewards is then seen as a sign of competence and one where an individual has autonomy (they can make as much or little as they want). Giving people the opportunity to choose their goals (and subsequent rewards) is also a way to increase the autonomy effect of an incentive.
Of course, all of this needs to fit into the larger perspective of impacting intrinsic motivation through other methods as opposed to just extrinsic rewards. How do all of your systems, culture, job structure, leadership style, recognition patterns, performance management and learning opportunities leverage off of each other. The clear discussion, shouldn’t be on intrinsic vs extrinsic, but instead on how do you maximize all the levers you have as a leader to increase motivation.