Intrinsic Rewards
When employees finish difficult projects, they experience intrinsic rewards. The intrinsically rewarding experiences, including personal advancement are an example of intrinsic motivation serving as a critical factor for employee engagement and job satisfaction. People find joy in learning new skills and develop pride from their team contributions.
What are Intrinsic Rewards?
Intrinsic rewards can be defined as the internal and psychological benefits that employees gain from their work tasks, such as a feeling of fulfillment, personal satisfaction, and enjoyment of personal growth.
Achievement, personal development, and satisfaction are part of an employee’s internal drive that helps him achieve these while performing their tasks. This behavior is supported by intrinsic rewards, which are the roots of their performance.
Intrinsic Rewards Characteristics
Intrinsic rewards have several distinct characteristics that set them apart from extrinsic rewards:
- Self-Determined: They are the type of rewards that an individual develops internally within them. Employees enjoy doing activities because they want to do them, not because they will benefit from it financially or get something out of it, like a promotion.
- Long-Lasting Impact: An employee who seeks intrinsic rewards makes a higher contribution to the company. In this case, the employees can make long-term commitments to meet their needs and those of the organization.
- Psychological Fulfillment: When employees are free to make choices about how they will perform their duties, they exhibit intrinsic motivation.
- Personal Growth: Employees can use self-interest activities to build self-skill and personal development. Employees satisfied with their work environment, engage in professional development activities.
Importance of Intrinsic Reward in HRM
Rewards are essential in the entire HRM process! They are important for promoting a positive workplace culture, and increasing employee engagement is impossible without them. Here are several reasons why an intrinsic reward is vital:
- Non-monetary incentives include recognition, autonomy, and progression. They enhance an employee’s performance.
- Employees who feel valued by a company will always give their best performance, and intrinsic rewards ensure this behavior.
- Intrinsic reward in HRM gives employees a sense of purpose and motivates them to complete their tasks without authoritative supervision.
- An organization can develop a culture where intrinsic rewards are valued and enrich the work environment.
- Employee satisfaction and motivation mean that employees will not look for other employers, thus low turnover.
- They can lead to increased productivity and efficiency.
- Social recognition leads to positive interactions between organizations and employees and can enhance positive relationships between them.
Intrinsic Rewards vs Extrinsic Rewards: What are the main differences?
Intrinsic rewards are the internal satisfactions of an employee achieved by performing a task/activity. Extrinsic rewards are external incentives, salary, promotions, and monthly or year-end bonuses offered by their workplace. Let’s understand the main differences between the two types through the table below:
| Intrinsic Rewards | Extrinsic Rewards | |
| Meaning | Intrinsic reward definition is the motivation of employees from within for the tasks they perform. | Extrinsic Rewards are tangible benefits and external sources of motivation for employees. |
| Motivational Factors | They can be personal satisfaction, pride, and a sense of accomplishment from performing a task or activity. | External rewards can be salary, bonuses, promotions, or recognition given to individuals by others. |
| Characteristics | Non-physical and not always monetary. | Physical (most of the time monetary). |
| Effect | Consistent, long-lasting, helps maintain job satisfaction and a higher level of employee engagement. | Short-term motivation and increased productivity and employee retention (can lose impact if rewards are not increased). |
| Extrinsic Rewards and Intrinsic Rewards Examples | An example of intrinsic reward is when a software engineer feels a sense of accomplishment after successfully developing a new feature. | An employee is promoted to a higher position with a pay raise. |
Intrinsic reward definition can be explained as the motivational factor that employees feel from within. They improve work performance, satisfaction, and individual development. Employees who constantly experience intrinsic rewards will always discover the meaning of the work they perform every day.
