Intrinsic and extrinsic rewards: how they work and when to use them

By November 29, 2019 Gamification, Insight, Strategy

There are two types of rewards, extrinsic and intrinsic. Both are used at different times to achieve different objectives. They are not mutually exclusive, this is not an either/or situation and the best approach is to use a combination of both.

Let's take a look at intrinsic and extrinsic rewards; how they work and when to use them.

 

Intrinsic and extrinsic rewards infographic v5

 

It’s important to know when to use which one

  • Extrinsic motivation establishes behaviour quickly
  • Extrinsic rewards are usually tangible rewards like a gift card
  • Focus shifts from intrinsic motivation to the extrinsic reward
  • Extrinsic rewards can diminish intrinsic motivation (Incentive Paradox)
  • If extrinsic rewards are withdrawn, intrinsic motivation usually doesn’t return

Know your audience

People respond differently to extrinsic and intrinsic rewards so it is important to know your target recipients

  • Intrinsic rewards are usually intangible and make us feel good
  • Some employees prefer private praise (which makes them feel good) over extrinsic rewards that everyone can see (and maybe covet)
  • Be sensitive to employee needs

To understand more about extrinsic versus intrinsic motivation, consider the following motivational theories:

  • The Overjustification Effect
  • Cognitive Evaluation Theory
  • The Incentive Paradox
  • And many others

You can read about the differences between extrinsic and intrinsic motivation, read our blog; Understand extrinsic and intrinsic motivation like a boss.

 

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Tags: Gamification Insight Strategy