Influence Of Extrinsic And Intrinsic Rewards On Employee Motivation

Problem statement of the research

What are the Influence Of Extrinsic Rewards Aand Intrinsic Rewards On Employee Motivation.

The variables of the study will be extrinsic rewards, intrinsic rewards and motivation.

The concepts of motivation and reword have been closely linked to the performance of employees at the work place. Arguments have been put fourth regarding the influence of rewords, both intrinsic and extrinsic on employee performance/ output. In relation to the past decades, coherent evidence has indicated that there is a positive relation between motivation and rewords, both intrinsic and extrinsic (Cho, & Perry, 2012, p.406).

In a basic understanding, motivation may be referred to as the drive or necessity which determines one’s conduct. Extrinsic rewards are exterior things to the employee that are tangible and are provided to the employee by the employer for example salary, promotion, pay rise, bonus among others. It is only managers who have the power to offer extrinsic rewards. On the other hand, intrinsic rewards are things that arise from within the worker and are not tangible. For example self-respect, value attached to the job, recognition among others (Hafiza, et al., 2011, p.334).

There has been consistence queries arising in the reasons as to why performance of employees vary from organization to organization. In a view of this controversial problem, theories and perceptions have been developed that tries to explain it. However, these has been divergences of these views. Thus, this study will explore the reasons why this so and the study will also attempt to offer possible solution on how increase employee motivation. The study also seeks to investigate the relationship between motivation and employment (Lepper, & Greene, 2015)

Aim, objectives and research questions

The aim of the research proposal is to establish the relationship between extrinsic rewards, intrinsic rewards and employee motivation. This will help managers on how to motivate their employees in order to enhance the success of the company or organization (Hung, S. Y., Durcikova, Lai, & Lin, 2011, p.427).   

The objectives of the research proposal

• To find out the relationship between intrinsic rewards extrinsic rewards on employee motivation. To establish whether there is a relationship between intrinsic rewards extrinsic rewards on employee motivation (Aktar, Sachu, & Ali, 2012, p.15).
• To investigate the impact rewards on employee motivation.
• To find out the employees’ view of rewards on their performance.
• To establish the attitude and view of managers on rewards and employees motivation.  
• To explore the impact of Salary, Working conditions, Recognition, Promotion, Pay rise in employee motivation and performance (Twenge et al., 2010, p.1142).

• What impact does motivation have on employment?
• Is there any relationship between motivation and employment?
• What is the attitude and view of managers on motivation?
• How do employees rate the impact of motivation on employment?   

Basing on the fact the research intends establish the empirical and practical relationship of the variables, it therefore implies that the results will be of relevance to business organizations and government authorities as they will such findings in policy formulation for example policies employee motivation scheme, government will still use the findings to persuade the donor agencies, and this will benefit the target population if the problem is solved (Ordóñez, et al., 2009, p.16).

Aim, objectives, and research questions

Students in especially in universities who will be required to carry out research in partial fulfillment of the course will use study finds as reference. This will give guidance to them while doing their research. The study findings will further aid the identification and filling of gaps left out by some scholars in case of any. This will help to address the research problem (Grant, 2008, p.48).

The conceptual frame work explains that extrinsic and intrinsic rewards influence employee motivation.

Employees generally feel when they are given incentives like; pay rise, promotion, money they are motivated to work harder hence increasing on their productivity.in addition, employees also feel that managers or their employers are not willing to give them incentives that would motivate them to keep working but instead want to promote only organizational interests by forcing them to work. On the other hand managers or employers feel employees assume that employees hate working, responsibility yet they love security of the job. It is therefore on this not that managers or employers assume that employees should be coerced in order to increase their productivity at work(Martín et al., 2009, p.490).  

The research study seeks to establish the link between the two independent variables that is to say; intrinsic and extrinsic rewards and the dependent variable which is motivation. The research proposal will also seek to comprehend how intrinsic rewards in comparison to extrinsic rewards are perceived to influence motivation. The goal of the research proposal will be to establish the factors that influence employee motivation at work. As well as establishing the relationship between rewards and employee motivation at work.    

In the labor market today is so competitive that organizations are projected to be violent in enabling employees. This is due to the fact that employee job satisfaction is very fundamental for better performance of the entire organizations (Cerasoli, et al.,  2014, p.980). For this reason therefore in order to reach the organization’s goals, mission and effectiveness in controlling the inspiration of workers should be included. Payments to employees arise due to their better performance within the organization. Rewards are performance boosters which when given to workers by managers or employers due to their good performance. This study identified two types of rewards that is to say; intrinsic and extrinsic rewards. Intrinsic rewards arise from within the worker and are not tangible for example self-esteem, love for the job among others while extrinsic rewards are external to the employee and are touchable  and provided by an employer for example money, pay rise, promotion among others. These rewards increase on employee performance (Minbaeva, 2008, p.719).

Justification and potential output of the research

With the aid of the past literature, this research study will test the following hypothesis:

• There is no relationship between extrinsic rewards, intrinsic rewards and motivation.
• Extrinsic rewards, intrinsic rewards have no impact on employee motivation.
• The level of extrinsic rewards and intrinsic rewards is low.    

Research design

The research study will use quantitative, non-experimental descriptive co-relational and cross sectional methods given the variables at hand that require description and comparison.   

Research approach and sources of data

The study will use descriptive research design and sources of data to be collection will be primary and secondary.  The sources of data will be both primary and secondary sources. The primary sources will be the respondents and the secondary will be the text books, journal, and articles among others (Hau, et al., 2013.).   

Proposed data collection and analysis techniques

The study findings will be collected using a self-administered questionnaire. It will be analyzed by use of frequency tables, bar graphs with the help of SPSS computer package.    

Population

The population will be one hundred fifteen (150).

Sampling

The target population will be selected by cluster random sampling. This will give everybody a chance to be selected. The clustered will be used because employees are scattered.

Variables and analysis

The variable of the study topic are extrinsic rewards, intrinsic rewards and motivation.

Motivation refers to reason for which a person acts in a certain way.

The variables will be tested and re-tested to ensure their consistency and validity of then proposed research instrument. The instrument should be able to serve its purpose correctly and also be able give consistent results (Khan, et al., 2013, p.280).

Intrinsic rewards things that influence one’ performance and arise from within the individual for example love for the job, desire for self-respect among other things. On the other hand extrinsic rewards are tangible incentives given to employees by their mangers or employers. In other wards extrinsic rewards are exterior to the worker (Westover, & Taylor, 2010, p.828).         

In an attempt to answer the research questions and also to get a vivid picture about variable in the research study. The past studies in relation to the variables in this particular research topic will help to establish the relationship between extrinsic rewards intrinsic rewards and employee motivation (Deci, & Ryan, 2008, p.14).

Several studies relating to the variables of the research topic were earlier carried out and a number of theories have been used to illustrate the relationship between rewards and employee motivation. Motivation have been defined by different scholars but have had related points of view. Therefore, it can primarily be defined as the determinant of one’s conduct or the reasons as to why a person behaves the way he or she does while at the work place or organization. Rewards are optimistic out comes that are received as a consequence of a worker’s performance and can further imply those rewards affiliated with organizational goals (Pratheepkanth, 2011).  

Conceptual framework

In reference to the prevailing research findings, there are basically two types of rewards that is to say; extrinsic and intrinsic rewards. Extrinsic rewards are exterior to the employee and touchable, for example money, salary pay rise, promotion extra and many others.  It is important to note that only managers or employers have the power to give, define who should be given, how much, when and the reason for which, extrinsic rewards should be offered while intrinsic rewards arise from within the individual and are not tangible. For example verbal praise, self-esteem, recognition, emotional affection attached to the job, individual attainment, professional, growth, finishing the given task among other things (Furnham, et al., 2009, p.778).

Meanwhile a classical research study of inherent motivation vividly demonstrates this problem. In the study research studies at a university to perform two tasks these are; writing headlines of a newspaper and answering puzzles that they initially found exciting. Some of these learners were paid while others were not (Chiang, & Jang, 2008, p.313). It was found out that there were minimal chances of learners who were to proceed with the activities despite the fact that both groups had interest in the activities prior. It seems the extrinsic reward interfered with the intrinsic reward of the activity itself (Yidong, & Xinxin, 2013, p.445).

Other studies propose that inherent motivation may not be so vulnerable to the effects of extrinsic reinforcement and that verbal praise is likely to increase intrinsic motivation. A number of factors may have had effect on this. For example physical reinforcement such as finance have been proved to have more negative effects on intrinsic motivation unlike verbal praise.in addition, expectations of the extrinsic motivator by employers is essential. Inherent motivation fo the job tends to reduce in case a person expects to receive an intrinsic reward. However, the theory states that such an expectation does not exist because it is offered as a surprise, then inherent motivation for a task tends to persist (Chiang, & Jang, 2008, p.313)

According to related research studies, managers should adhere to certain criterion to help employees with their intrinsic motivation and among which should include, Giving workers an opportunity to make choices through a high level of independence, allowing workers to demonstrate their capabilities in their areas of specialty and facilitate professional development so that workers are able to expand their knowledge and skills. Furthermore, offering recurrent prospects for employees to reward themselves and giving employees a chance to coordinate with their clients or customers so that they can receive valuable feedback on their growth (Aktar, Sachu, & Ali, 2012, p.15).

Impact of intrinsic and extrinsic rewards

It’s upon this background that the study builds a point to establish the causes of employee motivation, identify gaps and attempt to fill the gaps left out by other scholars. Different research reports included the use of different theories to explain what motivates employees to work and the relationship between intrinsic rewards extrinsic rewards and employee motivation. Among others included the following;

The theory explains the impact of extrinsic and intrinsic rewards. This theory contends that in the competitive work environment today organizations are predicted to violent on empowering employees because of employees’ job satisfaction essential for the performance of the entire organization. For this reason there, in order to reach the o to organization’s mission, goals effectiveness on managing the motivation of employees should be included. Rewards are performance inducements that are offered to employees by managers due to their good performance. This study also identified two types of rewards that is to say intrinsic and extrinsic rewards.

According to this theory extrinsic rewards are those optimistic touchable things that can be felt and delivered to employees by managers or employers. For example extra pay, salary, recognition and promotion. On the other hand intrinsic rewards are optimistically valued consequences of a task that employees receive directly as a result of job performance. For example self-worth, finishing a task, individual growth. According to this theory, types of rewards have got different functions and meanings to be applied depending on the requirement of an organization and the prevailing situation. It is very essential for managers to understand the difference between the two types of rewards and also know their importance and the implement t aid the successes of an organization (Twenge et al., 2010, p.1142).

Similarly in another study on the incentive theory of motivation intrinsic verses extrinsic motivation and intrinsic, two types of rewards are cited and their explanations are related. This theory contends behavior is primarily motivated by incentives of extrinsic factors. Intrinsic rewards arise from internal factors while extrinsic rewards are external to the employee meaning that they are offered to employees by managers or employers. Theory also asserts that employees are inspired to execute better in case they obtain an external reward afterward other than simply because they like activities performed (Grant, 2008, p.48).

The theory asserts that inherently inspired conduct is performed because of a sense of individual fulfillment. Conduct is defined as ones for which the reward is the fulfillment one’s performance of a job. This represents involvement in an activity for its own sake. For example if one joined teaching because he or she likes teaching, that teacher will be internally inspired to teach (Aktar, Sachu, & Ali, 2012, p.15).

Hypothesis development

Extrinsically motivated behaviors on the other hand are performed with the aim of receiving something at the end from others. For example to receive an outcome distinct from the activity. The employees may obey the commands to avoid being punished. It is external to the individual and acts on the worker for example pay rise, promotion, money, and emotional and social incentives like praise and attention (Twenge et al., 2010, p.1142).

The still affirms that extrinsic rewards are given motivate workers who show slight interest in a vital activity. Other than intrinsic rewards for example learners may perform better if they know that their performance will be judged. The incentives theory and the effects of extrinsic motivation is based on the idea that conduct is primarily dependent on extrinsic motivation. It states that workers are more inspired to perform activities in case they receive a prize at the end, rather than as a result of inherent rewards. However, this is contentious because the theory does not specify the period it takes and by what means the motivators transform the employees’ conduct.

In conclusion, most research studies reviewed indicated/assert that human beings are motivated by internal and external factors.  Most past studies argue that employees are more motivated by extrinsic rewards than intrinsic rewards. However, other studies disagree on this giving a challenge to the earlier studies.

Chapter one will be research proposal this refers to the suggested study, chapter two will be the target population. The target populations refers to the respondents who will be contacted during data collection so as to get the right answers to the research questions and test the hypothesis  , chapter three will include; methodology, literature review, data series, and surveys ( methods of data collection) the data will be collected by quantitative, primary secondary and survey methods , key indicators of a recession will a fall in employee productivity, absenteeism at work, employees arriving late at work and  methods of data analysis data analysis will be done using frequency tables, bar graphs with the aid of SPSS. The results will be tested and re-tested the validity and consistency of the proposed research instrument. Correlational analysis design will be used (Minbaeva, 2008, p.719).

The strategies to improve employee motivation by sensitizing managers or employers about the benefits of rewarding their employees and also informing them on the ways of rewarding their employees. When managers and employers accept to improve on the reward system, it will lead to; motivation of employees, increased employee productivity and in turn the result in the success of the companies or organizations. In general extrinsic and intrinsic rewards increase the efficiency and effectiveness of an organization (Minbaeva, 2008, p.719).

Methodology

The purpose of this budget is to facilitate all the activities of the proposed research report.

Activity/ item	Estimated price/budget
Purchase of data from secondary sources will cost	$ 50
Literature review requires use of text books, online resources, journals and other sources that are accessed at accost of about	$ 100.
Structuring and analysis of data will cost	$200
In summary the estimated budget will be about	$ 4000.

Task Name	Duration	Start	Finish	Predecessors
identification of research problem	3 days	Thu 7/12/18	Mon 7/16/18
reviewing of relevant literature	5 days	Tue 7/17/18	Mon 7/23/18	1
data collection process	6 days	Tue 7/24/18	Tue 7/31/18	2
analysis of the finding	3 days	Wed 8/1/18	Fri 8/3/18	3,2
submission of the rellevant finding	8 days	Mon 8/6/18	Wed 8/15/18	4

 

References

Aktar, S., Sachu, M. K., & Ali, M. E. (2012). The impact of rewards on employee performance in commercial banks of Bangladesh: an empirical study. IOSR Journal of Business and Management, 6(2), 9-15.

Cerasoli, C.P., Nicklin, J.M. and Ford, M.T., 2014. Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological bulletin, 140(4), p.980.

Chiang, C. F., & Jang, S. S. (2008). An expectancy theory model for hotel employee motivation. International Journal of Hospitality Management, 27(2), 313-322.

Cho, Y. J., & Perry, J. L. (2012). Intrinsic motivation and employee attitudes: Role of managerial trustworthiness, goal directedness, and extrinsic reward expectancy. Review of Public Personnel Administration, 32(4), 382-406.

Deci, E. L., & Ryan, R. M. (2008). Facilitating optimal motivation and psychological well-being across life’s domains. Canadian Psychology/Psychologie canadienne, 49(1), 14.

Furnham, A., Eracleous, A., & Chamorro-Premuzic, T. (2009). Personality, motivation and job satisfaction: Hertzberg meets the Big Five. Journal of managerial psychology, 24(8), 765-779.

Grant, A. M. (2008). Does intrinsic motivation fuel the prosocial fire? Motivational synergy in predicting persistence, performance, and productivity. Journal of applied psychology, 93(1), 48.

Hafiza, N. S., Shah, S. S., Jamsheed, H., & Zaman, K. (2011). Relationship between rewards and employee’s motivation in the non-profit organizations of Pakistan. Business Intelligence Journal, 4(2), 327-334.

Hau, Y.S., Kim, B., Lee, H. and Kim, Y.G., 2013. The effects of individual motivations and social capital on employees’ tacit and explicit knowledge sharing intentions. International Journal of Information Management, 33(2), pp.356-366.

Hung, S. Y., Durcikova, A., Lai, H. M., & Lin, W. M. (2011). The influence of intrinsic and extrinsic motivation on individuals’ knowledge sharing behavior. International Journal of Human-Computer Studies, 69(6), 415-427.

Khan, I., Shahid, M., Nawab, S. and Wali, S.S., 2013. Influence of intrinsic and extrinsic rewards on employee performance: The banking sector of Pakistan. Academic Research International, 4(1), p.282.

Lepper, M. R., & Greene, D. (Eds.). (2015). The hidden costs of reward: New perspectives on the psychology of human motivation. Psychology Press.

Martín Cruz, N., Martín Pérez, V., & Trevilla Cantero, C. (2009). The influence of employee motivation on knowledge transfer. Journal of knowledge management, 13(6), 478-490.

Minbaeva, D. B. (2008). HRM practices affecting extrinsic and intrinsic motivation of knowledge receivers and their effect on intra-MNC knowledge transfer. International Business Review, 17(6), 703-713.

Ordóñez, L. D., Schweitzer, M. E., Galinsky, A. D., & Bazerman, M. H. (2009). Goals gone wild: The systematic side effects of overprescribing goal setting. The Academy of Management Perspectives, 23(1), 6-16.

Pratheepkanth, P. (2011). Reward system and its impact on employee motivation in commercial bank of sri lanka plc, in jaffna district. Global Journal of Management and Business Research, 11(4).

Twenge, J. M., Campbell, S. M., Hoffman, B. J., & Lance, C. E. (2010). Generational differences in work values: Leisure and extrinsic values increasing, social and intrinsic values decreasing. Journal of management, 36(5), 1117-1142.

Westover, J. H., & Taylor, J. (2010). International differences in job satisfaction: The effects of public service motivation, rewards and work relations. International Journal of Productivity and Performance Management, 59(8), 811-828.

Yidong, T., & Xinxin, L. (2013). How ethical leadership influence employees’ innovative work behavior: A perspective of intrinsic motivation. Journal of Business Ethics, 116(2), 441-455.