Extrinsic rewards refer to incentives that are provided by the employer to motivate employees for achieving specific goals or completing tasks. These rewards can be in the form of cash payments, benefits, recognition, or other tangible benefits. It is important to note that intrinsic rewards, which are derived from within the employee, are different from extrinsic rewards.
Types of External Rewards
There are several types of external rewards that can be used to motivate employees. These include:
Monetary Rewards
Monetary rewards are one of the most common forms of extrinsic reward. These can include raises, bonuses, profits Share plans, and gift card.
Benefits and Perks
Benefits such as health insurance, vacation time, and flexible work arrangements can also serve as extrinsic rewards.
Job Security
Security of tenure, or the certainty of keeping the job, can be a strong extrinsic motivator for many employees.
Promotions
Promotions, or career advancement, can be an extrinsic reward that encourages employees to strive for excellence and grow within the organization.
Paid Time Off
Paid time off, or PTO, gives employees the flexibility to take time off for personal or medical reasons, making it a popular extrinsic reward.
Improved Work Amenities
Improving the physical work environment, such as adding ergonomic chairs or improved lighting, can also serve as an extrinsic reward.
Travel Incentives
Travel incentives, such as concert tickets or weekend getaways, can motivate employees to excel in their work.
Bonuses
Bonuses tied to specific tasks or performance can serve as an extrinsic reward.
Promotions
Promotions can also serve as an extrinsic reward.
Using Extrinsic Rewards Effectively
When using extrinsic rewards effectively, it is important to balance them with intrinsic rewards. While extrinsic rewards can provide immediate motivation, they can also lead to a focus on short-term gains and may eventually lead to decreased motivation if not managed properly. In contrast, intrinsic rewards are often more powerful and longer-lasting motivators.
When implementing an extrinsic reward system, it is important to clearly define rewards and the criteria for earning them. This helps employees understand what is expected of them and how they can earn these rewards. It is also important to ensure that the rewards system isaligned with the organization's goals.
Offering a variety of rewards, including both monetary and non-monetary incentives, can help cater to different employee preferences and motivations. Ensuring fairness and transparency in the reward system is also crucial to avoid perceptions of favoritism.
Finally, regularly reviewing and updating the reward system to reflect changes in the organization can help keep the program fresh and engaging.