What is extrinsic reward? Examples of extrinsic rewards and differences between extrinsic and extrinsic reward
The objective of any company is to grow and the growth of any company is reflected by the performance of its employees. Thus, improving employees performance is very important toward archiving organizational goals, that's why organizations reward their employees so as to make them be committed in their jobs and boosting their working morale and performance.
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What is extrinsic reward?
Extrinsic reward or external reward is a tangible reward or material thing an employer gives an employee to show the appreciation for the work he or she has done.
In most cases, extrinsic rewards are used to motivate workers to perform jobs or tasks they are not interested in or difficult tasks which should be performed within a short period of time. An organization can promise to offer rewards even before workers start to perform a particular task.
In motivation, extrinsic rewards and punishments are defined as the external forces that drives a person to change his or her behaviour. These external forces can boost the employees working morale even though they are not interested in a particular job.
Keys highlight about extrinsic rewards
- It is an external force which motivate a an employee to perform a job at his or her level best.
- It is a better way to boost employee's working morale toward difficult tasks or tasks they are not interested in.
- They are tangible things, means we can touch, see and count them.
- Most of them have monetary value like, bonuses, salary increase and profit sharing.
- Usually a reward is promised before the task start to be performed.
- An employee work so as to get a reward not because he or she is interested in a job or task.
Example of extrinsic rewards
There are many forms of external rewards that can be used by organizations to motivate their employees, some examples of extrinsic rewards are bonuses, increased salary, profit sharing, benefits and promotion.
1. Giving bonuses
A bonus is an extra amount of money given to an employee in addition of his or her base salary. Offering bonuses to the employees is one of best ways to motivate them to work but also it helps to reduce turnovers.
2. Salary increments
This is an increase in employee's salary. Every employee would like to get salary increase, thus increased salary can boost working performance and increase productivity in an organization.
3. Profit sharing
With profit sharing plan, employees are paid a share of the company's net profits in which they are employed.
4. Promotion
This is an act of moving an employee from lower position to higher position in a job, usually salary increases too. Promoted employees are usually motivated.
5. Provision of job benefits
These are compensations or inventive given to the employees in additional to their salaries like health insurance and life insurance.
Extrinsic rewards vs intrinsic rewards
Generally, there are two main types of rewards which are intrinsic rewards and extrinsic rewards. These two types varies in various angles as explained below.
1. Extrinsic rewards are usually tangible in nature, this means that they can be touched and seen while intrinsic rewards are intangible.
2. Most of extrinsic rewards have monetary value while intrinsic rewards do not have monetary value.
3. Extrinsic rewards are external forces that drives employees to perform while intrinsic rewards are internal forces.
4. Extrinsic rewards brings a desire to perform a job in which employee may not be interested in or satisfied with, while intrinsic rewards brings job satisfaction.
5. Extrinsic rewards may cost a lot of money to offer them, while intrinsic rewards may not cost too much.
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