Running head: INTRINSIC AND EXTRINSIC

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 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

INTRINSIC AND EXTRINSIC 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.

INTRINSIC AND EXTRINSIC 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 selfdetermination [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

INTRINSIC AND EXTRINSIC 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

INTRINSIC AND EXTRINSIC into three ranges or levels. These ranges, according to Thomas (2009) are: high-range, middlerange, 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

INTRINSIC AND EXTRINSIC 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.

INTRINSIC AND EXTRINSIC 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

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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.

INTRINSIC AND EXTRINSIC References Ankli, R. E., & Palliam, R. (2012). Enabling a motivated workforce: exploring the sources of motivation. Development and Learning in Organizations, 26(2), 710. doi:10.1108/14777281211201169

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Bnabou, R., & Tirole, J. (2003). Intrinsic and Extrinsic Motivation. The Review of Economic Studies, 70(3), 489520. doi:10.1111/1467-937X.00253 Dysvik, A., & Kuvaas, B. (2013). Intrinsic and extrinsic motivation as predictors of work effort: The moderating role of achievement goals. British Journal of Social Psychology, 52(3), 412430. doi:10.1111/j.2044-8309.2011.02090.x Lee, W., Reeve, J., Xue, Y., & Xiong, J. (2012). Neural differences between intrinsic reasons for doing versus extrinsic reasons for doing: An fMRI study. Neuroscience Research, 73(1), 6872. doi:10.1016/j.neures.2012.02.010 Lin, H.-F. (2007). Effects of extrinsic and intrinsic motivation on employee knowledge sharing intentions. Journal of Information Science, 33(2), 135149. doi:10.1177/0165551506068174 London, A. (2009). The impact of intrinsic and extrinsic motivation on job choice in Generation Y. 4th Annual Siena College Student Conference in Business. Retrieved from http://66.194.176.99/uploadedfiles/home/academics/schools_and_departments/school_of_busine ss/April%20London%20SCSCB.pdf Moore, S. (n.d.). What Is the Intrinsic Motivation Inventory? Small Business - Chron.com. Blog. Retrieved April 4, 2014, from http://smallbusiness.chron.com/intrinsic-motivation-inventory34761.html

INTRINSIC AND EXTRINSIC OConnor, M. (2006). A review of factors affecting individual performance in team environments: Theories and implications for library management. Library Management, 27(3), 135143. doi:10.1108/01435120610652888 Robinson, L. J., Stevens, L. H., Threapleton, C. J. D., Vainiute, J., McAllister-Williams, R. H., &

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Gallagher, P. (2012). Effects of intrinsic and extrinsic motivation on attention and memory. Acta Psychologica, 141(2), 243249. doi:10.1016/j.actpsy.2012.05.012 Root, G. (n.d.). Intrinsic & extrinsic motivation used by managers. Small Business - Chron.com. Blog. Retrieved April 4, 2014, from http://smallbusiness.chron.com/intrinsic-extrinsic-motivationused-managers-10429.html Ryan, R. M., & Deci, E. L. (2000). Intrinsic and extrinsic motivations: classic definitions and new directions. Contemporary Educational Psychology, 25, 5467. doi:10.1006/ceps.1999.1020 Sun Young Sung, & Jin Nam Choi. (2009). Do big five personality factors affect individual creativity?: the moderating role of extrinsic motivation. Social Behavior & Personality: An International Journal, 37(7), 941956. Thomas, K. (2009). The four intrinsic rewards that drive employee engagement. Ivey Business Journal. Retrieved April 4, 2014, from http://iveybusinessjournal.com/topics/the-workplace/thefour-intrinsic-rewards-that-drive-employee-engagement#.Uz7epfldV8E Wiley, C. (1997). What motivates employees according to over 40 years of motivation surveys. International Journal of Manpower, 18(3), 263280. doi:10.1108/01437729710169373