Difference Between Intrinsic And Extrinsic Rewards

Extrinsic rewards are the tangible rewards given to employees by managers, such as pay raises, bonuses, benefits, etc. According to the Ivey Business Journal, they are called “extrinsic” because they are external to the work itself and other people control their size and whether or not they are granted (Thomas 2009). On the other hand, intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well. Johnson explains how there are 4 main intrinsic rewards which are the sense of meaningfulness, choice, competence, and progress. Extrinsic rewards have been the most commonly used, but today’s lifestyle and way of conducting business has changed people’s mentality. Individuals seek a high sense of accomplishment and advancement rather than just a monetary reward. I have read stories of professional that leave a job with higher pay and benefits for a job that offered them more responsibility, creative freedom, and authority. Manager and team leaders need to take this into consideration whenever they are going to implement a reward system. They need to evaluate the team member’s goals and aspirations and create a balance between extrinsic and intrinsic rewards.
I believe that it depends on the situation a person is going through and what are the goals the he or she has established. At the moment I am motivated by money. I am trying to finish my degree and support myself, so money plays an important part in my life. However, I think that would change after I have acquired some experience in my field of study and had established certain financial stability. At that point my main motivator would be to keep learning and growing as a professional, even if it does not mean that I will be getting a raise or bonuses all the