Extrinsic vs. Intrinsic Motivation: How to Inspire Your Remote Employees

Managers need to have a high level of motivation to reach their goals and keep everyone on track. 

Unfortunately, it’s not enough to just tell yourself that you need to be motivated. You need to understand what actually motivates you. And that process starts with defining what the two types of motivators are, which one you respond to more, and how to strike the perfect balance between both.

Only when you understand this and know how to motivate yourself will you effectively be able to motivate your team members. With that in mind, let’s go over the two types of motivation. 

Two types of motivation

There are two types of motivation: extrinsic motivation or “motivation from outside” and intrinsic motivation or “motivation from within.” 

Extrinsic motivation — such as getting the best performance review of all the managers or winning a team competition — is measured by the external world. 

You, me, and your team members are motivated by rewards and external world factors. The only question is the scale of that motivation — how much external validation and rewards are needed for each of your team members to feel valued. 

If you want to answer this question for others, you first need to be able to answer it for yourself. 

A great bonus is always welcomed — but not if it means that you miss out on dinner with your family every night or if you have to do something that goes against your personal vision or ethical compass. 

Intrinsic motivation, on the other hand, is derived from the sense of meaning of your life. Intrinsic motivation is closely linked to your life’s story and the things that you hold dear. It can be a personal cause like eradicating homelessness from your city or being the best for the sake of being the best (i.e., achieving mastery). 

You need both types of motivation in your life to stay balanced. You also need both to figure out how to motivate your team.

Recognizing a need you have for intrinsic or extrinsic motivation will help you understand your team members on a deeper level. It will also make it easier to realize when you need to give them more of the one or the other.

Failing to satisfy crucial intrinsic motivations with extrinsic ones, you will become unmotivated, dissatisfied, and even bitter. And if you try to deny the need for extrinsic motivation to always serve the greater good rather than your own interests, you can become resentful toward others’ success, fall victim to financial exploitation, and become anxious about your uncertain future such as financial independence, rewards, recognition, and status with the team and company.

So it’s about balancing both motivators out. 

Understanding the motivation of others is crucial to realizing their full potential. To unlock the secrets behind the process, we will now dive into details of what each motivation looks like and how you can use them to get the best out of your team members. 

What is extrinsic motivation? 

Extrinsic motivation is tied to our social need for competition and rankings. As a social being, there is a hierarchy at place wherever we go and whatever we do. How effective is your team, how much money are you making, what kind of a car are you driving, and how big is your house? 

All of these and many more are symbols of our status within society and culture, and we want to look good in each category. To satisfy social and business needs, we need to receive extrinsic rewards that show both us and others that we’re doing well. That’s why champions and winners get trophies and medals. The same rules apply to the business world, which can give the following rewards:  

• Monetary compensation, salaries, and bonuses
• Having a position of power
• Having an enviable title
• Receiving public recognition
• Achieving preferred social status

You, as a manager, can use all of these to motivate your team members who have a higher affinity toward extrinsic motivation. Make sure that your team members know exactly what the reward is and when they will be able to “unlock” it since that will focus their behavior toward the actions that will get them the rewards. 

A great example of this was “The Wolf of Wall Street” — Jordan Belfort. He had an entire compensation system set up for his salespeople that was based solely on their sales numbers.

But extrinsic motivation is only half of the equation.

What is intrinsic motivation? 

Intrinsic motivation comes from within. It’s the type of motivation that gives us a sense of meaning when we do something and accomplish our goals. 

Intrinsic motivation was absent from the business world until the late 1990s, when it became clear that values, purpose, and meaning play a major role in the productivity, grit, and effectiveness of every single team member. 

Some examples of intrinsic motivation include:

• Personal growth and development
• Helping others
• Finding meaning in your work
• Making a difference in the world
• Influencing others in a positive way

You, as a manager, can use these types of intrinsic rewards to motivate team members that have a higher affinity for this type of motivation. Make sure you talk about the why behind the actions they will do and that your team members understand what their unique contribution toward the success of the company’s vision, mission, and purpose will be. 

A great example of intrinsic motivation is Charles Schwab’s story. 

Charles Schwab was appalled by the rates Wall Street was charging their clients for financial and brokerage services. So he decided to make his own investment portfolio that would treat his customers like a doctor treats their patients — do what’s in the patient’s best interest, not what’s in the doctor’s best interest.

Today, Charles Schwab is one of the world’s leading investment companies with more than $3.25 trillion in assets under management.

How to use both types of motivation to lead your team effectively

Now when you understand the how of intrinsic and extrinsic motivation, let’s see how to use it effectively in the modern workplace. 

The role of intrinsic motivation in the workplace

There are three key goals that intrinsic motivation should fulfill in the workplace:.

• The sense of purpose
• The sense of autonomy
• The sense of mastery

As a manager, you need to make sure that your team members receive all three of these key steps during their team experience. Doing so would be highly motivating and would fill their intrinsic needs. 

The sense of purpose tells your team members the why behind their actions. They understand how their work fits the underlying vision and mission of the company. The team members need to know that their work doesn’t exist in a bubble, but that their actions have real-life effects. 

The sense of autonomy helps your team members realize that they are in control of their business output and that they control their own productivity. Autonomy is more than just the power of making decisions — it’s about feeling like you’re in control of the outcomes you produce at work. Make sure that you create ownership in your team members by giving them autonomy. 

The sense of mastery helps your team members satisfy the need to grow personally and professionally which is an innate need we all have. Everyone on your team will profit out of this need because a marketer will become a better marketer, a salesperson will become a better salesperson, and an accountant will become a better accountant. 

The role of extrinsic motivation in the workplace

Extrinsic motivation plays a complementary role with intrinsic motivation in the workplace. 

Extrinsic motivation has three key steps as well:

• Salary and bonuses
• Praise
• Competition

Salary and bonuses: There needs to be a baseline salary that is satisfactory for the team member and that fills their basic needs. Oftentimes, companies today focus on intrinsic motivation and ignore extrinsic motivation. But that can lead employees to start feeling resentful toward the company and even quitting altogether if their salary doesn’t meet their needs. So make sure that your team members are properly compensated for their work. 

Praise: Criticize in private, but praise in public. People like to be praised and know that they did good on a specific project or in a difficult situation. As a manager, make sure that your team members receive enough praise from you for their good work. Giving them praise will further boost their good behavior and show others what kind of behavior is acceptable and will be rewarded. 

Competition: There is nothing bad in a little healthy competition. Extrinsic motivation helps you create a leader board for your team members and fuel a little bit of internal competition between team members. This can be highly productive for everyone in the team and can boost your team’s productivity. 

Balancing intrinsic and extrinsic motivation

Use 1:1 meetings to talk about intrinsic and extrinsic motivation with your team members. During the meeting, talk about how their work is purposeful and explain how their role fits the company’s overall vision and mission. 

At the same time, make sure that your employees understand that there is an incentive program in place that will compensate them for a job well done — both in rewards and in recognition (praise). 

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Extrinsic motivation in these difficult times comes down to the basic, fundamental needs — like knowing that your job will still exist after the COVID-19 pandemic passes. 

The current situation is making it hard for people to adjust to working from home. And this is exactly where you need to step in with intrinsic motivation and make sure to focus on the purpose of the business and the individual’s role in it. 

Having an empathetic approach to the situation and making sure you’re supportive of your employees’ actions is what will make your team flourish during these difficult times. 

So keep an open-channel policy during these times. That will make you a psychological safety pillar of your team — making sure everyone is motivated to reach their full potential during the pandemic and beyond.