Negative Effects of Extrinsic Rewards on Intrinsic Motivation: More Smoke Than Fire

Abstract

National Central University, Taiwan Barry Gerhart, Ph.D. University of Wisconsin Gerald E. Ledford Jr., Ph.D. University of Southern California M otivation research makes a basic distinction between intrinsic and extrinsic motivation. In general, researchers define intrinsic motivation as that which arises from performing the task. An employee may feel motivated to perform the task because doing so gives that worker a feeling of accomplishment, mastery and/or self-fulfillment. Extrinsic motivation, on the other hand, comes from outside the individual, and results from the expectation of receiving external rewards such as salary, benefits, incentives, promotions and recognition in exchange for job performance. This means the tools of compensation and benefits professionals are extrinsic rewards. These tools have the goals of enhancing extrinsic motivation and increasing organizational performance. A recurring theme in the popular management literature is that extrinsic rewards diminish intrinsic motivation, and this problem is so serious that it can render extrinsic incentives for performance of any kind as ineffective or even counterproductive. This claim has become so commonplace that many managers and employees assume that it is true and that it is proven by decades of academic research. Negative Effects of Extrinsic Rewards on Intrinsic Motivation: More Smoke Than Fire

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