Extrinsic and Intrinsic Rewards for Employees


Employees are considered as an asset for different organizations and in order to motivate them organizations stresses a lot on their employees and they devise different strategies in order to train and motivate them in both the short and the long run. Organization usually focus on two types of rewards these rewards are known as extrinsic rewards and intrinsic rewards and the core motive of these rewards is to motivate the employees of the organization and to enhance their performance.


Extrinsic rewards are related to monetary benefits and they usually come from outside of the performer. The most apt example of extrinsic rewards is the money as it’s considered as the basic need of individuals. In business oriented environment money, shields and mementos are usually related to extrinsic rewards. However, in a broader perspective the extrinsic rewards are closely related to elements like working conditions and environments, status, security and pay of an employee (Thomas 2009).

In the long run these extrinsic rewards results in promotion pay raises and they also result in special training. An intrinsic reward on the other hand is more towards inner satisfaction and they come inherent to the activity itself.

Maslow’s hierarchy is closely related with extrinsic and intrinsic rewards and the extrinsic rewards are related to physiological needs and safety needs while intrinsic reward are linked with needs of love and belonging and the needs of self esteem (McShane & Glinow 2009). Therefore, it can be said that extrinsic and intrinsic rewards are essential for employees in both the short and the long run and these rewards satisfy the basic needs of employees.

Organizations all over the world stresses a lot on intrinsic and extrinsic rewards and organization that are known as multinationals regard these rewards as an integral element of their organization and through these rewards they believe that employees can perform well in both the short and the long run.

Every organization fulfills the extrinsic needs of employees and extrinsic rewards are offered to them and this activity is considered as a normal activity in usually every organization because when it comes to basic needs nearly every organization fulfills it. However, organizations like Dell, Intel, Wall-Mart etc focuses a lot on intrinsic motivation. They engage in activities like trainings and workshops and these organizations invest in the well being of the employees which motivates the employees to work hard for the betterment of the company.


Reward programs like appraisal of employees in terms of posts and designation and even a pat on the back are considered as a motivational reward. Although this might seems to be a minute activity but employees of the organizations accept this reward whole-heartedly.

For example the rewards program of Toyota is quite distinct and they consider employees as the owners of the company and employees develops a mindset that if they work well then they get more both intrinsically and extrinsically (Kreitner and Kinicki 2008). These organizations defines there reward system just for the betterment of their employees and ultimately the organization and the employees both benefits from this approach. Therefore, it can be said that extrinsic and intrinsic rewards are essential for employees and both the rewards must be grouped together.

List of references

Kreitner, R., & Kinicki, A. (2008). Organizational Behavior: Key Concepts, Skills & Best Practices. McGraw-Hill/Irwin.

McShane, S., & Glinow, M. (2009). Organizational Behavior. McGraw-Hill/Irwin.

Thomas, K. (2009). Intrinsic Motivation at Work: What Really Drives Employee Engagement. Berrett-Koehler Publishers.

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