HBR Guide to Motivating People (HBR Guide Series)

CHAPTER 4

It Takes More Than Just Extrinsic Rewards to Inspire People

When people think about how to motivate employees, it’s often external rewards like pay hikes, promotions, prizes, or bonuses that come immediately to mind. But managers have a lot more tools at their disposal. In fact, research shows that intrinsic rewards are generally more effective at sustaining high performance and engagement—and are fortuitously under a manager’s control. Let’s take a closer look at why motivating with money might not be the best strategy.

Extrinsic Rewards

External, tangible forms of recognition are often the first course of action when the troops are flagging. On the surface, extrinsic rewards tend to be easy to execute: “If you make your quota, we’ll ...