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Workplace motivation is often dependent upon the ability to make one’s employees feel as though they are being appreciated.

There are generally two schools of thought on how to motivate workers through recognition: using intrinsic and extrinsic methods. Intrinsic methods are designated as those without a physical reward, such as being named worker of the month, while extrinsic models focus on providing financial compensation for hard work. This paper explores the benefits and drawbacks of using an intrinsic rewards model in the workplace and compares with it with using extrinsic models of recognition and motivation. The paper finds that both have various means of implementation that must be considered carefully by a manager in order to work for their specific business model.

The employees within any company structure are human beings. As obvious as that might sound, it is a fact that is often overlooked in the realm of management. After all, a large part of management is figuring out how to motivate one’s employees to align their beliefs and ideals of success with that of the company. In order to do this, employees must feel as though they are being offered two things that are necessary for humans to feel wanted and appreciated: recognition for their work and rewards for performing it well. By examining these two aspects of motivation, it is clear that these underutilized elements of management should be implemented more often and in a greater variety of settings. As one of the more difficult aspects of this motivational concept, it is important to explore the possibilities and limitations of recognition in the modern workforce.

Workplace Trends

It would seem that many workplaces have already implemented a wide variety of different schema for recognition of employees. Just about every major retailer has a section in the store where one could see the different employees of the month. However, understanding this trend in the modern workforce is very important. After all, it is not always about elevating one worker over the others, but recognizing that they are able to set a positive trend for the company that other should follow. Kosfield and Neckermann explored the idea of intrinsic benefits to social recognition within the company. Specifically, they look at the overall effects of how Employee of the Month awards are able to motivate employees to work harder and better than before, essentially giving them the ability to gain something from their workers for nothing.

The study resulted in several findings that contextualized the information and provided a firm reason for why the employee of the month recognition was so successful in creating a more motivated workforce. The first reason was that the awards are visible; the recipient is often publically recognized during an awards ceremony, or perhaps has their picture hanging somewhere throughout the location (Kosfield & Neckermann, 2011, p. 86). This is an important factor because it creates visibility and demonstrates to the rest of the workers that the individual that was awarded for their service should have their work mimicked. The second result from the study showed that employee awards like employee of the month or any form of recognition had the tendency to spark a competitive nature within the business (Kosfield & Neckermann, 2011, p. 86). In other words, the managers within the company are capable of getting workers to increase production on the potential for them to gain an award in the workplace. The third benefit of using intrinsic motivation in the workplace is that the criteria for garnering such an award is often vague, allowing the manager to change it to suit the values that they would like to espouse (Kosfield & Neckermann, 2011, p. 86). While this fact might not be the most beneficial in terms of workers trying to figure out how to gain the award, it is still beneficial for the management. While these three benefits provide context to the intrinsic rewards of work, it is also important to examine how workers react to the rewards that are driven by their own feelings of success.

Intrinsic Rewards

The best way to conceptualize recognition in the work environment is through private and company-wide settings that each has different benefits and challenges. However, it is important to establish that there are benefits to offering recognition within a company setting.
A study that was completed in 2009 showed that there were several benefits to offering employees some form of recognition in their work. This study took a survey of over 900 public sector jobs and evaluated the amount of recognition that the workers felt they were receiving and weighed it against the feelings that they had about leaving that job for the private sector (Henryhand, 2009). According to the results of the study, it found that the workers who felt as though they had high recognition were more likely to stay, with 76 percent of the 246 highly recognized workforce feeling satisfied by their jobs (Henryhand, 2009). On the other hand, the 654 workers who felt as though they were not receiving adequate recognition for their work felt more incline to leave, with 67 percent indicating that they would be leaving in the next year if a position was available.

One recent book that was written on the topic noted that recognition is a powerful “leadership tool to improve employee performance” (Ventrice, 2009). Moreover, the author noted that “assuming that all you need to make recognition work is a new award” is a mistake because the best recognition is not always something that is extrinsically rewarding (Ventrice, 2009). Instead, the author notes that there are a variety of different ways to go about providing the needed levels of recognition. Rather than relying on a Pavlov-like positive response for giving worker recognition, Ventrice recommends that managers take time to offer rewards that are more particular to the individual. For example, providing awards that are related to the store culture but take into account the personal aspects of the workers that are qualified such as culture in presenting the awards (Ventrice, 2009, p. 138). It is important to make employee recognition in the workplace more enticing than a mere “pat on the back” from working.

While many workers will feel motivated when they are presented with awards for their service, others are not able to be motivated through such means. These individuals have to experience an entirely different form of employee recognition if the manager is going to be able to get high quality consistency out of them. These awards are monetary awards that have extrinsic value to the worker. They can be explored in a variety of different and helpful contexts.

Extrinsic Rewards

Generally, there are two major forms of extrinsic rewards that are often useful in light of increasing the output of workers. They are monetary raises for doing good work, also known as merit raises, and simple financial rewards for doing well, such as getting a check for being recognized as the employee of the month.

There are many people who both recognize the benefits of giving monetary rewards for service as well as the inherent problems that come along with doing it. Aguinis et al explored this topic in the article titled “What monetary rewards can and cannot do: How to show employees the money” (2013, p. 241). The article expounds on the different benefits that can come as a result of being willing to pay workers with direct payments as a result of their hard work.

The authors wrote that the most important aspect of offering financial incentives for the workers was letting them know the criteria that are required for the award to be given. This is an important concept for managers that are in charge of allocating the money as it makes the employee aware of the conditions that they have to fulfill to get the money. By not outlining the specific criteria, the employer risks having employees claim favoritism or unfairly denying them the money (Aduinis et al., 2013, p. 245). The article goes on to note that giving employees money for their hard work should be confined to actions such as company-wide profit sharing or for hitting a milestone within the company. Giving employees money for a wide variety of activities outside of this context has negative connotations and can make the employee’s good work contingent upon them receiving extra money.

Still, another means of gaining the appreciation of employees by using extrinsic rewards is through the process of granting workers merit raises. These are permanent raises in one’s salary as a result of showing outstanding work ethic. While it was a widespread means of increasing salary, cutbacks and public businesses are typically not allowed to grant them. Yet, according to Dinibutun, it is one of the best ways to effectively motivate workers as a manager. According to his article, merit raises are important to motivation and recognition because it simultaneously allows the worker to understand that they are a valued member of the company and gives them social recognition (Dinibutun,2012, p. 116). Moreover, it gives the manager a means to retain the worker in a work environment that might not have adequately rewarded the worker when they were starting with the company. This form of employee recognition is crucial to the retention and promotion of good workers, but it also has another facet to it that makes merit raises important. These raises continue to spawn different forms of competition in the workplace as more people become accustomed to the idea that they could be given a merit raise as well. Not only does this account for recognition, but it also accounts for a significant area of workplace motivation that is easier to utilize than intrinsic rewards.

When considering both intrinsic and extrinsic rewards, it is important to understand that they both have serious impacts on employee recognition and motivation. Intrinsic rewards allow the business to get something at no cost to them, but may leave the worker feeling underappreciated when it comes time for a yearly raise or review. On the other hand, too many extrinsic rewards such as payouts offer the opposite problem, where the employee either expects pay increases or money as a condition of their good work. It is up to the manager to find the balance between these aspects of recognition and motivation, and to implement them in a way that is able to increase worker production. This requires knowledge of the benefits and drawbacks of this form of motivation, but also an understanding of one’s employees. By using both of these methods, workers can find themselves feeling personally recognized and motivated to be the greatest worker that they can be.


Aguinis, H., Joo, H., & Gottfredson, R. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56(2), 241-249. Retrieved May 25, 2015, from, R. (2012). Managing

Effective Motivation. GSTF Business Review, 1(4), 114-119. Retrieved May 25, 2015, from 8f1f6ea81e62ae1b011c0a5/1?pq-origsite=gscholar

Henryhand, C. (2009). Employee incentive, job satisfaction. Public Relations Review, 47(2), 53-56. Retrieved May 20, 2015, from

Kosfeld, M., & Neckermann, S. (2011). Getting More Work for Nothing? Symbolic Awards and Worker Performance. American Economic Journal: Microeconomics, 3(3), 86-99. Retrieved May 25, 2015, from

Ventrice, C. (2009). Make their day! employee recognition that works : Proven ways to boost morale, productivity, and profits. San Francisco, CA: Berrett-Koehler.

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By Hanna Robinson

Hanna has won numerous writing awards. She specializes in academic writing, copywriting, business plans and resumes. After graduating from the Comosun College's journalism program, she went on to work at community newspapers throughout Atlantic Canada, before embarking on her freelancing journey.

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