Will employees who are passionate about their job perform even better if they receive an additional bonus payment for good performance? A new study from BI has the answer.

Most organisations want their employees to be passionate about their work, i.e. to be intrinsically motivated. When the employees experience intrinsic rewards such as satisfaction, joy or meaning in connection with the work they do, they perform better than those who do not experience this.

At the same time, many organisations use bonuses, billable hours and management by objectives using quantitative indicators to achieve extrinsic motivation.

“It appears as if these organisations are trying to have it both ways,” says Bård Kuvaas, Professor of organisational psychology at BI Norwegian Business School.

There have been several studies documenting the advantages associated with intrinsic motivation. There has been less research on the effects of extrinsic motivation, where the work performance is aimed at achieving positive and avoiding negative consequences.

“That’s a shame. Many managers obviously believe that intrinsic and extrinsic motivation can be combined to achieve a form of optimal motivation,” says Kuvaas.

Compares extrinsic and intrinsic motivation

Along with researchers Robert Buch, Antoinette Weibel, Anders Dysvik and Christina G. L. Nerstad, Professor Bård Kuvaas has conducted an extensive study to compare intrinsic and extrinsic motivation.

The researchers wanted to see how extrinsic and intrinsic motivation are connected to the employees’ work performance, attitudes and well-being in three different groups. The study was conducted among employees in the finance sector, at petrol stations and in a large health technology organisation.

The researchers found that there were negative correlations between extrinsic and intrinsic motivation in all groups. The more intrinsically motivated the employees were, the less extrinsically motivated they were, and vice versa.

“This means that it is not very realistic to try to combine or balance intrinsic and extrinsic motivation and believe that this will improve performance,” says Kuvaas.

Intrinsic motivation creates better performance

The study shows a positive correlation between intrinsic motivation and work performance as assessed by managers in a group consisting of 552 employees at petrol stations. The extrinsically motivated employees’ performance was assessed as worse by their managers.

In another group consisting of more than 4500 employees in the finance industry, the researchers collected data at two different times.

“What we found here was that the more extrinsically motivated the employees were, the less loyal they were to the organisation, the more they thought about leaving the organisation and the higher they scored on burn-out and work-family conflict.”

The findings for intrinsic motivation were the opposite, which is that the more intrinsically motivated the employees were, the higher the loyalty and the lower the turnover intention, burn-out and work-family conflict.

There should be limits for low ambitions

Previous studies have shown that extrinsic motivation can be less harmful than no motivation.

“But there should be limits for low ambitions. Managers should instead try to maximise the intrinsic motivation and minimise the extrinsic,” says the BI Professor.

For most jobs and activities, extrinsic motivation does not represent a second-rate form of motivation, it is rather a less than optimal form of motivation, according to Kuvaas.

“It is difficult to understand why many organisations still encourage extrinsic motivation,” he says.

Because which managers actually want poor work performance, lower loyalty, higher burn-out, work-family conflict and turnover intention, which are possible results of extrinsic motivation. “It is damaging for both employees and organisations.”

Reference:
• Bård Kuvaas, Robert Buch, Antoinette Weibel, Anders Dysvik og Christina G. L. Nerstad: “Do intrinsic and extrinsic motivation relate differently to employee outcomes?”. Journal of Economic Psychology, 2017, 61, pg. 244-258.

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