So-called ‘intrinsic motivation’ is the most overlooked factor in performance and change.
Managers are seduced by familiar, easy and yet outdated methods to secure performance. The result? Reward systems and culture that, ironically, distort both behaviour and outcomes.
As an HR professional, you can overcome these longstanding management shortfalls by promoting the value of intrinsic motivation. By doing so, you can equip the organisation to see beyond employees as rational economic agents and explore their psychological needs as human beings.
Two kinds of motivation
Motivation frames how personal and environmental characteristics influence behaviour and, in turn, job performance.
To understand why methods designed to encourage performance may backfire, let’s distinguish between extrinsic and intrinsic motivation. Both act on performance, not directly but by influencing employee behaviour.
Extrinsic motivation, as the term suggests, has origins outside the employee. For example, stock options, bonuses and payments calibrated with performance elicit behaviours that lead to success. Sticks go hand in hand with carrots.
The thinking is based on economics: the manager (principal) offers incentives to the team member (agent) to promote effort and align performance with expectations. Such contingent rewards serve as positive reinforcers of desired behaviour.
Common sense tells us that extrinsic motivation has merit. At a basic level, people work for a pay packet, whilst variable compensation is also known, say, to align executives’ behaviours with the needs of the organisation (or its shareholders).
Intrinsic motivation, on the other hand, refers to an individual’s desire to perform a task for its own sake. Here, activities are undertaken for immediate satisfaction, not some expected future reward. Motivation, which equates to work morale or ethic, is self-sustained.
Psychology, rather than economics, explains how intrinsic motivation operates. When a team member undertakes work they enjoy and find meaningful, extraordinary effort and strong performance are more likely.
Intrinsic motivation encourages a person to seek out novelty, explore and learn, and exercise strengths. This is invaluable where activities are complex or require initiative, such as with the ‘knowledge’ work that today accounts for many an organisation’s comparative advantage.
Extrinsic versus intrinsic motivation
Why can’t managers simply harness both forms of motivation: pay team members to work better, and allocate tasks they actually want to perform? Research suggests that extrinsic and intrinsic motivation are not additive and that rewards may even ‘crowd out’ intrinsic motivation.
Scholars are divided on the relationship between the two: see, for example, the thinking of Alfie Kohn, a challenge by the Incentive Research Foundation and an open-minded review by the CIPD.
Our experience at Marble Brook is that, with performance as well as change, intrinsic and extrinsic motivation alike bring value and drawbacks. Firms must be skilled in both.
Failures of extrinsic motivation
Whilst extrinsic motivation is easy to administer, it carries limitations.
Extrinsic motivation is said to ‘crowd out’ intrinsic motivation, not least because it shifts the locus of control and responsibility from within to an external party – the manager. It can also undermine a person’s own confidence in their abilities or in the value of a task.
Rewards that secure compliance in the short term become negative reinforcers when they are withdrawn. This is seen even with children: studies show that those rewarded for a play activity later showed lower intrinsic motivation than peers who enjoyed no reward (see, for example, Turning Play into Work).
Extrinsic incentives direct attention to future satisfaction and may cause team members to lose interest in an immediate goal, such as serving customers. People may pursue solely the activities that are measured and lead to rewards. And, they tend to report only favourable outcomes.
When employees are surveilled – a prerequisite for performance incentives – their speed of learning and conceptual understanding reduces, mostly owing to pressure from feared sanctions.
Extrinsically motivated employees typically avoid risks and repeat tasks that will earn them a reward. Intrinsically motivated employees, on the other hand, are more likely to be creative and explore new ideas.
With complex ‘knowledge’ work, managers cannot unambiguously specify behaviour, procedures or outcomes. Here, extrinsic motivation falters because meaningful surveillance and fair rewards are hard to agree on.
Risks of intrinsic motivation
Intrinsic motivation, whilst vital for modern work, brings its own difficulties.
Managers easily damage intrinsic motivation, not least through excessive surveillance. At the same time, it is tough to shift team members’ desires consistently and in the right direction. Interventions take longer than, say, the launch of a new bonus scheme.
People may be intrinsically motivated toward undesirable behaviour. Rather than pursue agreed goals, some may wish to dominate their colleagues or play Candy Crush all day.
Bureaucratic systems bring overheads such as goal-setting, surveillance and the administration of rewards and punishments. Still, intrinsic motivation places a heavy burden on the leadership skills of managers. Success is, therefore, far from guaranteed.
Finally, some roles are inevitably more dull than others. Here, extrinsic rewards may provide stronger motivation than an employee finds within the tasks themselves.
How to foster intrinsic motivation
The missing link for sustainable performance is enabling everyone to discover interest in their work. How can you, as an HR professional, promote intrinsic motivation?
Discourage actions that lower intrinsic motivation
First, abandon rewards that are seen to be controlling or manipulative – those which meet only managers’ aims – as these lower intrinsic motivation. You may, however, boost intrinsic motivation using contingent incentives when they have an ‘informative’ effect. These signal an appreciation of high work morale and ‘crowding in’ occurs, especially with non-monetary rewards.
Second, challenge the use of management commands, as these restrict perceived self-determination and undermine agency. Micro-management and directive communication are no one’s friend.
Third, question favouritism and unfairness. There are two kinds of justice: outcome and procedural. Remember that team members evaluate rewards and treatment relative to those of others: ensure both results and process withstand scrutiny.
Promote conditions that elevate intrinsic motivation
Research suggests that intrinsic motivation is favoured under three conditions (for example, see this summary by Osterloh and Frey).
First, encourage personal relationships and good communication as a means to elevate intrinsic motivation. Rewards encourage a transactional contract between employer and employee, whereas relationships allow a more reciprocal psychological contract.
Second, champion participation to raise team members’ self-determination. When goals are set mutually (rather than by managers alone) and solutions are co-created, people feel more intrinsic motivation.
Finally, advocate interesting work. People aspire to perform meaningful tasks and see how they make a difference. This is true even for simple manual labour: when income rises above culturally endorsed subsistence levels, colleagues seek meaning in their work.
Beyond day-to-day performance, our experience at Marble Brook is that these three factors are likewise vital in enabling shifts in culture and practice. Otherwise, change exhausts everyone.
Call for skilled leadership
Ultimately, if your organisation is aiming for consistent performance, it must blend strategies that advance both forms of motivation. Intrinsic motivation calls for greater ‘psychological feeling’ and so tests managers’ leadership beyond the use of carrots and sticks.
As an HR professional, you can equip managers to build (and value) leadership skills that promote workplace relationships, personal agency and job enrichment. Traditional compensation strategies may reinforce, but cannot substitute for, such efforts.
As American management theorist Frederick Herzberg said, ‘If you want people motivated to do a good job, give them a good job to do.’
