The performance of an organization is highly dependent on the extent of involvement exhibited by the employees in various organizational tasks. It is at this point that workplace motivation comes into play as when employees are motivated to perform their jobs, the organization exhibits efficient and effective performance on the whole. In contrast, when the workforce is not sufficiently motivated, organizational outcomes are negatively affected. Therefore, it is very important for managers to comprehend the different kinds of motivations and reward systems and how they can have an impact on employee performance.

There are two kinds of motivations that are experienced by individuals while performing any task, i.e. intrinsic and extrinsic motivation. Intrinsic motivation is what comes from within an individual, and include internal factors that motivate the employees to fulfill their jobs to the best of their abilities. In contrast, extrinsic motivation refers to the external factors pertinent to the job that compel individuals to exhibit good performance. These two concepts will be discussed in detail in this article.

Definitions and explanations

Intrinsic motivation

Intrinsic motivation refers to the motivation experienced by individuals due to factors that emerge from within. It is something that people offer to themselves, and does not depend on external factors. This kind of motivation is psychological in nature, and is brought about by personal satisfaction that individuals experience at accomplishing a task, or the feelings of enjoyment they experience while performing tasks. It refers to the personal encouragement and acknowledgement that people offer to themselves with respect to their skills and competencies. Employees that are intrinsically motivated usually exhibit excellent performance and are highly valuable for their organizations.

Intrinsic motivation is brought about through intangible rewards. Some example of intrinsic rewards are: personal satisfaction, professional development, feeling of accomplishment, desire to develop new skills by fulfilling challenging tasks, etc.

Extrinsic motivation

Extrinsic motivation is that form of motivation that depends on external factors, and these motivators may be tangible and financial in nature. An employee may become motivated to fulfill their tasks when they are eligible to receive a reward. These rewards are offered by the manager, who decides when to offer them and to what extent.

Most often, extrinsic motivation is offered through financial benefits like salary increments and bonuses. Other examples of extrinsic rewards are promotions, improvements in office conditions and work environment, verbal acknowledgement from the management, awards, and being assigned further responsibility.

Employees motivated by external rewards perform a task not because they wish to achieve a feeling of fulfillment or because they wish to see the business grow. Rather, they are seeking to receive material benefits for the efforts they put in their jobs.

The importance of extrinsic rewards in organizations is also evident from the fact that employees who are not paid adequately, are overworked and not appreciated for their efforts are not sufficiently motivated to perform to their highest potential.

Difference between intrinsic motivation and extrinsic motivation

The main difference between intrinsic motivation and extrinsic motivation is given below:


Intrinsic motivation refers to the motivation experienced by employees through internal factors, i.e. their feelings. Extrinsic motivation, on the other hand, is brought about by external factors, and is usually based on material and financial rewards.

Driving factor

An employee who is intrinsically motivated performs well because they want to enjoy a sense of accomplishment and achieve personal development. In contrast, the primary motive of an employee who is extrinsically motivated is to receive rewards and material benefits for their efforts.

Kinds of rewards

Intrinsic motivation is brought about through intangible and intrinsic rewards, while extrinsic motivation depends on tangible and financial rewards.

Administered by

Intrinsic motivation comes from within an individual, i.e. it is self-administered. It does not depend on anyone else or any external factor. On the other hand, extrinsic motivation is administered by a supervisor or manager who determines the extent to which the rewards should be offered to the employees and the appropriate time to provide these rewards.

Examples of rewards

Example of intrinsic motivation are: personal satisfaction, feeling of accomplishment, skill development,etc.

Some examples of extrinsic motivation are: salary increases, benefits, promotions, bonuses, new house or car, better office, etc.

Intrinsic motivation vs extrinsic motivation – tabular comparison

The difference between intrinsic and extrinsic motivation is presented in a tabular form as follows:

Intrinsic motivation vs Extrinsic motivation
The motivation experienced by individuals because of their personal interest or keenness to accomplish a task; i.e. it emerges from within an individual The motivation experienced by individuals due to external factors, such as tangible and financial rewards
Driving factor
Personal factors, like sense of achievement and personal satisfaction Financial benefits and compensation
Kinds of reward
Internal and intangible Tangible and financial
Administered by
Self-administered Administered by the manager
Examples of rewards
Sense of accomplishment, personal growth and development, feelings of contentment at fulfilling challenging tasks, etc. Salary increments, bonuses, promotions, car, house, etc.

Conclusion – intrinsic motivation vs extrinsic motivation

Intrinsic and extrinsic forms of rewards within organizations are actually part of a continuum. At one end of the continuum, there are some employees that are motivated by external tangible rewards such as monetary benefits or other material forms of benefits. At the other end, there are people who are not concerned about material rewards and receive motivation from internal factors like self-satisfaction and appreciation. However, it should be acknowledged that people can be best motivated by a combination of the two forms of rewards. When the extrinsic reward-based form of motivation is integrated with the internal approach concentrating on personal accomplishment and goal setting, a more powerful form of motivation at different levels is achieved.

To conclude, it is important to have a motivated workforce because when employees are sufficiently motivated, they are able to exhibit better performance and show greater efficiency at work. This is beneficial for the organization as effective employees generate better outcomes and turnover for the organization. Therefore, developing a well-planned reward system is critical for every organization.