Dual approach will inspire staff best

Employers need to address extrinsic and intrinsic reward to motivate staff fully, says Punch Taverns’ Anthony York

Although a motivated and driven workforce is essential for all companies, many employers do not consider fundamental concepts or the theory behind workplace motivation, which is either intrinsic or extrinsic.

Employers wanting to maximise employee motivation in a cost-effective way and define what encourages desired behaviours in their staff should, in future, look at both of these concepts.

A person who is extrinsically motivated, for example, will work hard for external rewards, such as money or recognition, even if they have little interest in what they are doing. But an intrinsically motivated person will be driven by the pleasure and satisfaction they get from working on the task itself. Such individuals are less likely to be concerned with external rewards.

Extrinsic rewards are most powerful when they achieve the positive behaviours employers are looking for in the workforce in ways that require discretionary effort from staff. Employees choosing to come to work for a salary illustrate such an exchange in its simplest form. An employee’s desire to maintain their income also ensures they adhere to the psychological employment contract between employee and employer. Traditional bonus and incentive schemes are other types of extrinsic reward.

Examples of extrinsic reward are very common, but many employers fail to implement a motivation strategy based on intrinsic reward. More often than not, reward professionals are simply asked to design an incentive to make a project work and the power of intrinsic motivation is ignored. Aligning an employee’s job satisfaction drivers with the company’s strategic direction can help to define the emotional contract between employee and employer. Failure to consider intrinsic motivation can lead to waste of spend, with employers chasing the nebulous concept of ‘motivation’ through various costly schemes.

If the motivational focus is on driving correct behaviour (as opposed to additional effort) from employees, then using an intrinsic approach can yield the best results. All things being equal, most employees will prefer to do a good job than a poor one, if the effort required is equal in either case. From a company perspective, this intrinsic motivation can be maximised by aligning the employee and company perception of success in any given situation. To achieve this, it is vital for employers to communicate the local implications of the wider business strategy. The most important element in maintaining employee motivation will always be the relationship with line management, so improving the leadership calibre of this group will also have a great effect on intrinsic motivation at lower levels.

The other side of intrinsic motivation is to maximise the likelihood of every employee wanting to do a good job for the company. To do this, there is a need to maximise the strength of the perceived relationship between each employee and the company itself. The factors influencing the strength of this relationship will vary for every employee. The continuing development and decreasing cost of configurable communication and administration technology enables employers to maximise the strength of this relationship for everyone. This will be done not only through the obvious mechanisms, such as flexible benefits, but also by allowing personalisation and choice in other HR areas, such as career pathways and learning schemes.

There is, of course, a real need to approach reward from both an intrinsic and extrinsic point of view. Most of the work that we do as reward professionals will remain directly linked to the management of cash and employee benefits. But the fundamental reason for reward to exist is to drive business results, and inevitably this leads back to the motivation of employees.

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Anthony York is head of reward at Punch Taverns

  • A person who is extrinsically motivated will work hard for external rewards,such as money and recognition.
  • A person who is intrinsically motivated will be driven by the pleasure and satisfaction they get from working on the task itself.
  • †Employers should consider both intrinsic and extrinsic forms of reward in order to successfully develop an effective and cost-efficient motivation strategy.†