Motivation, Life Cycle & the Appropriate Mix of Extrinsic & Intrinsic Rewards

Motivation is the desire that constantly drives a person to work hard towards his/her goal and what actually motivates people to wake up every morning to go to work really arouse my interest. This interest grew much more when intrinsic and extrinsic rewards was introduced to me, and when I personally experience changes in what motivates me to go to study or work. Thus, I would like to share my perspectives and thoughts on this topic.

Motivators throughout my life

When I was young, my family and relatives told me to study hard so that I could get into a better job to earn huge amount of money to lead a better life. So I aimed to work in the banking industry as it have always been said to provide the highest salaries, and thus I studied banking and finance as I was motivated by the extrinsic rewards that I will be able to get in the future. During the period of studies, I realize that I do not really like that industry and does not have any passion in it. As such, I became less motivated to study more about it and changed my specialization to what I have passion in, so I changed to go towards what intrinsically motivates me. Additionally, my life journey leads me to think more thoroughly about what I want from my job such as money to support my family, work-life balance, meaning, empowerment and career advancement. By reflecting the motivators throughout my life and combining with what I have learnt in class, I agree with Ariely that motivation should be the combination of extrinsic and intrinsic rewards. Yet, the question here is which motivator is more important in today’s world and what is the appropriate combination, which I seek to address below.

The More Important Motivators: Intrinsic or Extrinsic?

As Daniel Pink, Ariely and Kanter have suggested, intrinsic rewards are more important today in the 21st century and I agree with it. According to McKinsey (2009) survey, over 60% of the employees stated that nonfinancial incentives like praise from immediate manager, attention from leaders and opportunities to lead are more effective in motivating them to work harder compared to financial incentives such as cash bonuses, increase in base pay and stock or stock options 60% or less effectiveness.

Mckinsey 2009

Furthermore, I had also found similar results from the employee engagement survey done from my previous internship. The top categories that employees stated as things that can drive them to work harder in sequence are Career Advancement, Empowerment and Immediate Supervision. Having said that, it does not mean that extrinsic rewards are not important. By referring to the Malow’s hierarchy of needs, it is important that people have enough money to ensure their basic needs are met before they pursue for more. In the 21st century, the phenomenon is that people are getting more affluent drives person to seek more intrinsic rather than extrinsic rewards. This may be why intrinsic rewards is a more important motivator nowadays, but does everyone values intrinsic rewards more than extrinsic rewards?

The Combination of Extrinsic & Intrinsic Rewards

In my opinion, everyone at a different stage of life have different things that are important to them just like what I had illustrated through my reflection of my own life journey. During our class discussion, there are also differences in what each of us values. Thus, I would like to bring in the concept that Warr suggested, that perhaps what motivates us depends on our stage of life cycle. For instance, an employee who have just married might requires more money to support the family and in this case extrinsic motivators may be more attractive to him/her. Therefore, it is important for organization to find out the life cycle stage of the employee to tailor the appropriate balance of extrinsic and intrinsic rewards for him/her. So how do we know what is the appropriate balance of rewards? One suggestion I have in mind is that HR should always be clear about each of the employee’s stage of life cycle and communicate to the immediate supervisor, while immediate supervisor should be like their friends to understand through daily communications to find out their needs at that life stage so as to tailor rewards specifically for them.

In conclusion, through my reflection, I think that both intrinsic and extrinsic rewards matter even though intrinsic rewards may be perceived as more important these days. The determination of which is more valued depends on individuals, and this may be due to their life cycle stage in which they are currently at. Thus, it requires much organizational efforts to find out the best rewards combination to be customized for each employees.

So what other suggestions do you have for determining the appropriate mix of intrinsic and extrinsic rewards?

References

Dewhurst, M., Guthridge, M., & Mohr, E. (2009, November). Motivating People: Getting Beyond Money. Retrieved from Mckinsey & Company: http://www.mckinsey.com/insights/organization/motivating_people_getting_beyond_money

Kanfer, R., & Ackerman, P. (2004). Aging, Adult Development, and Work Motivation. Academy of Management Review, 440-458.

Palmer, A. (2012, August 30). Study: Money Not a Top Motivator: Incentive Magazine. Retrieved from Incentive Magazine: http://www.incentivemag.com/Strategy/Engagement/Study–Money-Not-a-Top-Motivator/

 

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