Role of Intrinsic and Extrinsic Rewards in Motivating Employees

Abstract

An organization's ability to motivate its workers is crucial to its long-term viability and competitive advantage in the complex field of organizational behavior. Realizing that inspired workers are more invested in their work, creative, and productive, organizations are always looking for ways to bring out the best in their staff. There are two main kinds of rewards that are used strategically in this endeavor: intrinsic and extrinsic. Organizations often use extrinsic rewards as a means of incentivizing certain actions and results. Salary, bonuses, promotions, and other monetary and non-monetary advantages are common examples of such tangible kinds of reward. Employees are motivated to fulfill organizational objectives and maintain high levels of performance when they receive extrinsic rewards, which are meant to acknowledge and reinforce favorable behaviors.  Those in leadership positions who want to foster an inspiring workplace must have a firm grasp on the interplay between internal and external incentives. Intrinsic rewards are crucial for encouraging long-term engagement and work happiness, in contrast to extrinsic rewards, which are good for driving performance and goal attainment in the short term. The combination of these two forms of compensation has the potential to greatly impact how workers act, how they feel about their jobs, and what they bring to the table as a whole. The findings from this study provided results into the effectiveness of intrinsic and extrinsic rewards in influencing employee motivation levels within the organization. It aims to contribute to the development of evidence-based strategies for optimizing reward systems to enhance overall employee engagement and organizational performance.