The Effects of Extrinsic Rewards on Intrinsic Motivation

Transcription

1 The Effects of Extrinsic Rewards on Intrinsic Motivation Shane McCormack University of Central Florida

2 The Effects of Rewards on Motivation 2 Abstract In this literature review, the effects of extrinsic rewards on intrinsic motivation are assessed. Some evidence has shown that rewards can improve motivation, while conflicting evidence has found that motivation has been undermined by rewards. This effect is analyzed in intrinsic motivation by different types of extrinsic rewards. The research suggests that the context in which the reward is given and the type of reward can make a significant difference when measuring levels of intrinsic motivation.

3 The Effects of Rewards on Motivation 3 Motivation When looking at motivation, several definitions are provided in the literature. Chuang et. Al (2008) defined it as the internal drive that can move people towards satisfying particular needs and expectations, while helping to explain individual behavior. Holm and Jansen (2002) and Landy and Becker (1987) defined motivation as a dependent variable as the intention to behave, and consists of any of the following traits: initiation, direction, persistence, intensity, and termination. With the emphasis on the intention to behave, Wiley (1997) explained that motivation is representative of behavior as opposed to performance. According to Wiley, motivation is dynamic rather than constant in the individual and is influenced by internal and external factors. Maslow (1943) also believed that actions are influenced multiple factors when assessing motivation, and that the appearance of a singular need is actually defined by a hierarchy of needs. Maslow s hierarchy of needs begins with basic physiological needs and progresses to higher level needs that are essential to the growth and self-worth of a person. Maslow s hierarchy starts with basic physiological needs such as food, water and shelter (Maslow, 1943). Once these basic needs are satisfied, a person adopts the need for security, and an environment safe from external danger (Maslow, 1943; Stum, 2001). The third need is the need for acceptance, which includes receiving and offering affection. The fourth need in the hierarchy is esteem which is associated with the desire for feelings of self-esteem, self-worth, self-respect, and feelings of being important. The last need in the hierarchy is self-actualization. This need embodies the concept of a person doing what they are meant to do (Maslow, 1943). The Hierarchy of needs is not perfect and has certainly garnered its share of criticism. Even Maslow has noted that the order and satisfaction of a particular need is not the same across

4 The Effects of Rewards on Motivation 4 individuals. For example, some people might value a trait such as self-esteem more than love. Furthermore, once a need has been sufficiently met over a long period of time, it may become undervalued. This can cause a reversal of the order of needs in the hierarchy, making other needs more important to the individual. Every person begins by meeting physiological needs, and then they strive to meet the need for safety, etc. Maslow believed that needs do not have to be completely satisfied before moving on to the next need in the hierarchy. Instead, there is a decreasing percentage of satisfaction as one ascends the hierarchy. Stum (2001) noted that even though a need is never fully satisfied, it can be substantially met and cease to motivate a person. Since there is a hierarchy of needs for a person s daily life, it is possible that there could be a hierarchy of needs unique to the workforce. This workplace need hierarchy has been developed and is known as the Aon Consulting s Performance Pyramid (Stum, 2001). The pyramid depicts is a hierarchy of workforce needs in the context of an organizational setting. Like Maslow s hierarchy, the pyramid begins with the basic needs and ascends to more complex needs. The basic needs of the pyramid are needs for safety and security. An employee must feel that the environment of the organization is physically and psychologically safe in order to develop a commitment to the organization. The second need in the hierarchy concerns rewards. In this level of the hierarchy, extrinsic rewards such as compensation and benefits must be satisfied. Once this need is met, the individual desires affiliation in the organization. Affiliation is an intrinsic need that involves the feeling of being a part of the team, and also identifying with the organization. The fourth need a person seeks to satisfy is growth. Growth concerns the opportunity an individual has to advance in the organization, and how much they can improve both personally and as a worker. The highest need in the hierarchy is harmony in both work and

5 The Effects of Rewards on Motivation 5 in life. Work/life harmony means a person is effectively able to balance responsibilities both inside and outside of work (Stum, 2001). Similar to Maslow s Hierarchy, once a need is satisfied an individual attempts to satisfy a need at the next level in the hierarchy. Stum (2001) noted that once a need has been satisfied, it ceases to motivate the person. Ankli (2012) believed that motivation contains a set of underlying assumptions. These assumptions are that people are capable of performing responsible actions, they have a desire to learn and understand things, and they possess a desire to excel both in and outside of work. In the workplace, motivation is defined as an internal drive that moves people to satisfy certain needs and expectations, while affecting the behavior of the individual which in turn affects performance (Chuang, 2008; Wiley,1997). Motivation focuses on an internal drive and as coming from the individual. However, in the literature motivation has been defined as both intrinsic and extrinsic. Extrinsic Motivation Extrinsic motivation is defined as doing something because it leads to a separable outcome (Ryan and Deci, 2000). Extrinsic motivation emphasizes completing a task for recognition, a particular reward, a promotion, etc. Interestingly, individuals can perform extrinsically motivated actions with hostility, resentment, apathy, and disinterest which contradicts the typical definition of motivation (Ryan and Deci, 2000). However, this is not always the case. People influenced by extrinsic motivation can also display an attitude of willingness that reflects an inner acceptance of the value or utility of a task (Ryan and Deci, 2000). Extrinsic motivation also has different subcategories such as external regulation, introjected regulation, regulation through identification, and integrated regulation. The main

6 The Effects of Rewards on Motivation 6 difference between these subcategories is the level of autonomy in each one. All of these forms of extrinsic motivation pertain to performing an activity to attain some separate outcome. In this sense, extrinsic motivation directly contrasts with intrinsic motivation. Extrinsic motivation refers to doing something for its instrumental value, while intrinsic motivation refers to doing the activity simply for enjoyment (Ryan and Deci, 2000). Intrinsic Motivation Intrinsic motivation refers to doing something because it is inherently interesting, and not for a particular outcome or external reward. Intrinsic motivation typically results in high-quality learning as well as creativity (Ryan and Deci, 2000). It is preferred in organizations because the desired behavior is not contingent upon external factors. However, this type of motivation varies from person to person, and is not constant from one task to another (Ryan and Deci, 2000). Hull (1943) suggested that intrinsic motivation corresponded to the learning theory. Hull noted that all behaviors are motivated by physiological drives, and that intrinsically motivated activities provided satisfaction of innate psychological needs (Ryan and Deci, 2000). In experiments, intrinsic motivation is operationally defined by an activity where no extrinsic motivation is introduced for participants. If they continue to participate in the activity after they are given the option to stop then they are intrinsically motivated. Keeping with the idea of needs, Ryan and Deci (2000) explained that for a high level of intrinsic motivation, people must experience satisfaction of the needs for competence and autonomy. Positive performance feedback, which reflects competence, enhanced intrinsic motivation in individuals, and negative performance feedback diminished it (Ryan and Deci, 2000). Ryan (1982) emphasized that perceived competence must be accompanied by perceived autonomy in order for competence to increase intrinsic motivation. Both extrinsic and intrinsic motivation can be influenced largely by rewards

7 The Effects of Rewards on Motivation 7 that are administered. Since this is a common occurrence in the workforce, it is important to understand how rewards can influence the motivation of workers. Extrinsic Rewards There various types of extrinsic rewards given in the workforce and elsewhere. Extrinsic rewards can be verbal or tangible and have several subcategories. Some of the subcategories for these types of rewards include unexpected tangible rewards, expected tangible rewards, tasknoncontingent rewards, engagement contingent rewards, completion-contingent rewards, performance contingent rewards, and task contingent rewards. These rewards will be discussed in depth later in this literature review but it is important to understand that the type of reward can have a drastic effect on the motivation of an individual. Some of these effects can be extremely advantageous to the organization, while others can be detrimental. Ryan and Deci (2000) noted that more autonomous extrinsic motivation is associated with greater engagement, better performance, less turnover, higher quality learning, and increased levels of psychological well-being. Rewards are also important because a person might originally participate in an activity because of a reward, and if the reward is not perceived as a controlling factor, exposure might cause the person to become intrinsically motivated by the activity. The main component of administering rewards depends on whether or not the reward is viewed as controlling behavior, or if it is made contingent on task performance. Virtually every type of expected tangible reward that was contingent on task performance was shown to undermine intrinsic motivation in a literature review by Ryan and Deci (2000). Tang and Hall (1995), however, found that the effects of rewards on uninteresting tasks may improve intrinsic motivation. The drastically different effects that a reward can have on an individual s motivation

8 The Effects of Rewards on Motivation 8 have prompted this literature review. Essentially, I plan to analyze literature focusing on the effects of external rewards on intrinsic motivation in individuals. Effect of Extrinsic Rewards on Intrinsic Motivation When assessing the effects of external rewards on intrinsic motivation, a common phenomenon is that the rewards can actually undermine a person s motivation. This is especially prominent when individuals feel that their actions are being controlled. For example, in a study by Ryan and Connell (1989), the more students were externally regulated, the more they displayed disinterest, apathy, and lack of effort. Research by Deci (1971, 1972) showed that tangible rewards such as money could undermine college students intrinsic motivation for interesting activities. In a similar finding, Dickinson (1989) proposed that when an extrinsic reward has become expected for an activity and is then removed, people are left with less satisfaction and less motivation to perform a task. In a study by Pritchard and Campbell (1977), participants were given rewards based on performance. Participants who did not do well did not receive rewards which led to a significant undermining of intrinsic motivation in those individuals. This falls in line with the idea that competence is needed in order to be motivated to perform a task. If an individual feels that the lack of reward is based on their low level of competence, they will not be motivated to continue performing the task. A study by Ryan et al (1983) compared a control group that received no rewards or feedback, to a group that received rewards based on performance. The control group was in an environment that supported autonomy, whereas the group that received rewards was in a controlling environment. The reward group showed lower levels of intrinsic motivation than did the control group. One of the biggest findings from these studies is that the environment and context in which rewards are administered has a large effect on the reward s influence for an individual (Gagne and Deci,

9 The Effects of Rewards on Motivation ). When rewards are given in an environment that supports independence, they are less likely to have a negative effect, and can even increase levels of intrinsic motivation in the individual. Types of Rewards Cameron and Pierce (1994) categorized rewards between verbal and tangible. Tangible rewards can either be unexpected or expected when administered. Subcategories of expected rewards are task-contingent, task-completion, performance quality-contingent, and noncontingent on completion or quality (Gagne and Deci, 2005). The type of reward can make a significant difference when analyzing how it affects intrinsic motivation in the individual. Verbal vs. Tangible Rewards Verbal rewards are typically administered in the form of positive feedback, and can have many positive effects on the individual. The advantage with verbal rewards is how the informational aspect of the reward is apparent, which leads to enhanced intrinsic motivation (Deci, Koestner, and Ryan, 1999). For example, whatever the worker is being complimented on is usually unambiguous. The real benefit of this type of reward for an organization is that it is free, and easy to administer. However, like many rewards, verbal rewards can decrease a person s sense of autonomy, especially when people partake in an activity to gain approval or acknowledgement (Deci, Koestner, and Ryan, 1999). Studies by Ryan (1982), Pittman, Davey, Alafat, Wetherill, and Kramer (1980) tested the prediction that controlling positive feedback leads to a decrease in intrinsic motivation as opposed to informational positive feedback. Examples of controlling positive feedback would be phrases such as great job, keep up the good work or this is excellent, as it should be (Deci, Koestner, and Ryan, 1999). Even though these

10 The Effects of Rewards on Motivation 10 phrases are technically positive, there is a message of expectation sent to the worker that lowers levels of autonomy. Examples of Informational positive feedback are phrases such as great job or compared to everyone else, you are one of my best workers (Deci, Koestner, and Ryan, 1999). This type of feedback is simply positive without an underlying expectation. Both studies found that informational positive feedback was much more effective than controlling positive feedback in relation to intrinsic motivation (Ryan, 1982; Pittman et al, 1980). An interesting finding in the meta analyses by Deci, Koestner, and Ryan (1999) was that verbal rewards enhanced both free-choice behavior and self-reported interest in individuals. However, this enhancement in free-choice intrinsic motivation applied only to college students and not to children. This means that verbal rewards enhance intrinsic motivation for college students, however it failed to increase intrinsic motivation in children. While verbal rewards are a popular form of extrinsic rewards, the most common type of extrinsic reward is the tangible reward. When one thinks of extrinsic rewards, the most common one that comes to mind is probably money. This is a realistic reward to study especially since the workforce uses bonuses, raises, etc. to imply that a person is doing a good job in the organization. Interestingly, McGraw and McCullers (1979) found monetary rewards to decrease creativity in problem solving, and Erez, Gopher and Arzi (1990) found that monetary rewards lowered levels of performance on complex tasks with goals that were considered difficult to attain. Amabile, Goldfarb & Brackfield (1990), Mcgraw (1978), and Deci, Koestner, and Ryan (1999) emphasized that tangible rewards administered for completing a task, and other extrinsic factors such as competition, and evaluations can undermine intrinsic motivation, creativity, cognitive flexibility, and problem solving abilities. Deci, Koestner, and Ryan (1999) conducted a meta-analysis analyzing seventy studies of tangible rewards in relation to self-reported interest. They found that

11 The Effects of Rewards on Motivation 11 the effect of all tangible rewards significantly undermined intrinsic motivation. They also explained that how interesting a task is, can affect how effective the tangible reward will be for an individual s motivation. For example, when a task is dull or boring, tangible rewards will not significantly undermine intrinsic motivation. When a task is interesting, the authors found that tangible rewards had a significant negative effect on intrinsic motivation. This effect was prevalent on participants who were in preschool to participants in college. Deci, Koestner, and Ryan (1999) explained that even when tangible rewards are administered to recognize good performance, they will usually decrease levels of intrinsic motivation for interesting activities. While tangible rewards seem to have an overall negative effect based on the aforementioned studies, perhaps it is the context of administering the reward that is the issue. In this next section the different types of tangible rewards will be assessed individually. Unexpected vs. Expected Tangible Rewards An important factor when giving rewards to people is the context in which they are administered. For example, when a person is expecting a reward for their work, their motivation is affected. In a study by Lepper et al. (1973), research suggested that rewards that were given to participants after a task was completed did not undermine intrinsic motivation. This was only when participants did not expect a reward for their performance on the task. The finding that unexpected tangible rewards did not affect intrinsic motivation was also supported by Tang and Hall (1995), Eisenberger and Cameron (1996), and Deci, Koestner and Ryan (1999). Deci, Koestner, and Ryan (1999) noted that this phenomenon occurs because participants were not doing a task in order to get a reward, so they did not feel controlled by the unexpected reward. This falls in line with the concept of the needs for both competence and autonomy when analyzing intrinsic motivation. The unexpected reward creates feelings of autonomy because it

12 The Effects of Rewards on Motivation 12 doesn t seem to control the individual, and it creates feelings of competence because they are being recognized by their superiors. When looking at expected tangible rewards, they appear to have the exact opposite effect as the unexpected tangible rewards. Expected rewards are rewards that a person knowingly receives after they have completed a task. Deci, Koestner, and Ryan (1999) discussed how the expected tangible reward significantly undermines intrinsic motivation. This finding was found to be consistent in both the behavior of individuals and through self reports. Both theory and research on the subject suggest that the reason for which an expected tangible reward is given may influence the reward s effect (Deci, Koestner, and Ryan, 1999). Contingent Rewards One type of contingent reward is the task noncontingent reward. This type of reward is given for something other than engaging in the target activity such as simply participating in the study (Deci, Koestner, and Ryan, 1999). This type of reward does not require a participant to complete the task, participate in the task, or do the task well (Deci, Koestner, and Ryan, 1999). An example can be seen in the study by Deci (1972a) where participants receive $2 for participating in the study, no matter what they did while they were there. This type of reward is reflective of work conditions, where people are paid a salary without having pay directly related to the tasks that the individual performs (Deci, Koestner, and Ryan, 1999). Since task noncontingent rewards are far from being informational or controlling in relation to the task, intrinsic motivation is typically not affected by these rewards (Deci, Koestner, and Ryan, 1999). As opposed to task noncontingent rewards there are task contingent rewards. Task contingent rewards are rewards given for doing or completing a specific activity (Deci, Koestner,

13 The Effects of Rewards on Motivation 13 and Ryan, 1999). Research by Tang and Hall (1985), Wiersma (1992), and Rummel and Fienberg (1988) noted that task-contingent rewards undermine intrinsic motivation. Deci, Koestner and Ryan (1999) noted in their meta-analysis that rewards based on performance in a task had a negative effect on free-choice intrinsic motivation (when participants could choose to keep participating or stop) but not on self-reported interest/enjoyment (how much they reported enjoying the task). In their meta-analysis they noted that Eisenberger and Cameron (1996) and Cameron and Pierce (1994) reported nonsignificant undermining of intrinsic activity with task contingent rewards. However the research only consisted of 11 self-report studies which was a small sample size, and it contradicted research by Deci, Koestner, and Ryan (1999). Another type of contingent reward is the engagement contingent reward. These rewards depend on participation in the task but do not require that an individual completes the task (Deci, Koestner, and Ryan, 1999). An example of this reward can be seen in a study by Ryan et al (1983). In the study, participants received a reward for participating in a game where they had to find hidden figures in puzzles. Participants were unaware of how many were in each puzzle, and were unsure about whether or not they had completed the task or even performed well. This undermined intrinsic motivation for both college students and children. With this type of reward, Deci, Koestner, and Ryan (1999) explain that people have to work on the task in order to receive the reward, so it is likely to be viewed as controlling an individual s behavior. Also, since the reward reflects nothing of competence, it will not increase perceived competence in individuals which further undermines intrinsic motivation (Deci, Koestner, and Ryan, 1999). While engagement contingent rewards require participation, completion contingent rewards require that an individual completes the task in order to receive the reward. Since rewards are only given for completing the specific task, people come to view this type of reward

14 The Effects of Rewards on Motivation 14 as controlling behavior (Deci, Koestner, and Ryan, 1999). Deci (1971) used this type of reward in an experiment where participants worked on puzzles and received $1 for each puzzle they completed in a set amount of time. Intrinsic motivation is significantly undermined with this type of reward since the only motivation to complete the task is for the expected tangible reward. Engagement contingent rewards focus on simply completing the task, whereas performance contingent rewards are dependent upon how well an individual performs an activity. Performance-contingent rewards are dependent upon some standard of excellence or exceeding a specific criterion such as being better than a percentage of a group (Deci, Koestner, and Ryan, 1999). Once again, since rewards depend on how well a person performs there is a high level of control over the individual. Therefore, these rewards typically undermine intrinsic motivation and individuals perform the task solely for the reward. Deci, Koestner, and Ryan (1999) noted that these rewards can also instill a high level of competence information when a person does well enough to get a level of the reward that suggests that they are high performers. This effect can enhance intrinsic motivation for the higher performers of a group. Ryan, Mims, and Koestner (1983) stated that when rewards were dependent upon a high level of performance quality, and the interpersonal context was supportive rather than pressuring, tangible rewards enhanced intrinsic motivation compared to a control group that received no rewards or feedback. However, they found that the performance contingent rewards did lead to lower intrinsic motivation in the rewards group as opposed to a control group that received positive feedback. Essentially this means that if rewards aren t controlling, they will be more intrinsically motivating than a group that receives no feedback or rewards. However, positive feedback appears to be even more effective for a group than receiving performance-contingent rewards. The reward in their study involved giving participants $3 for having performed an activity well.

15 The Effects of Rewards on Motivation 15 Ryan et al (1983) also found that participants who received performance-contingent rewards administered in an autonomy-supportive interpersonal climate showed higher levels of intrinsic motivation relative to a control group that received no rewards and no feedback. In the same study, participants who received performance-contingent rewards administered in a controlling climate showed lower intrinsic motivation relative to the control group. Free Choice Behavior vs. Self Report When analyzing the degree of intrinsic motivation, it is common to use either free choice behavior or self-report. Free choice behavior is used when participants are given a task, and at a point given the option to stop or continue the activity. If participants continue to participate in the activity they are considered intrinsically motivated. In regards to self-report measures, participants rate how interested they are in the activity or how much enjoyment they get from the activity. Intrinsic motivation measured by free choice behavior was significantly undermined by all rewards (tangible, expected, engagement-contingent, completion-contingent, and performance contingent) (Deci, Koestner, and Ryan, 1999). The only extrinsic reward that enhanced intrinsic motivation was positive feedback, and only unexpected and task-noncontingent rewards showed no effects on intrinsic motivation (Deci, Koestner, and Ryan, 1999). An underlying problem with the free-choice measure is that extrinsic motivation manipulated in the experimental phase could represent extrinsic rather than intrinsic motivation (Deci, Koestner, and Ryan, 1999). The extent that this happens could inflate the free choice measure in the rewards group in comparison to the control group which leads to an underestimation of undermining by extrinsic rewards (Deci, Koestner, and Ryan, 1999). Ryan, Koestner, and Deci (1991, 1999) suggest that the best way to ensure measurement of intrinsic motivation is to use both free-choice behavior measurements

16 The Effects of Rewards on Motivation 16 and self-reported interest measurements. The authors suggest that only when these two measures correlate can one assume that they are measuring intrinsic motivation. Self-reported interest had interesting findings as well in relations to extrinsic rewards. According to the meta-analysis by Deci, Koestner and Ryan, (1999), tangible, expected, engagement-contingent, and completion contingent rewards significantly undermined intrinsic motivation. Only performance contingent rewards did not undermine intrinsic motivation, and verbal rewards enhanced intrinsic motivation. Deci, Koestner and Ryan (1999) concluded that patterns were similar on both measures, however free choice results were much stronger than self-report measures. Self-report measures have several limitations that must be considered when using them. Self-report measures indicate interest and enjoyment for a task with a reward. Deci, Koestner, and Ryan (1999) argue that people may confuse the enjoyment of the reward with the enjoyment/interest of the task itself. This could inflate interest scores in groups that receive rewards as opposed to control groups. This would result in an underestimation of the undermining of intrinsic motivation by rewards. Another common issue with any self-report measure is that participants know experimenters will see their answers which could affect results. The Overjustification Effect When looking at why certain rewards might undermine intrinsic motivation, a common theory to analyze is the overjustification effect. The overjustification effect explains that when people are rewarded for an activity that they already find interesting, they become motivated by the reward instead of their inherent interest in the activity (Deci, Koestner, and Ryan, 1999). This leads to a lower intrinsic motivation than before any reward was introduced to an individual. Lepper (1981) explained that the more instrumental a relationship between an activity and a

17 The Effects of Rewards on Motivation 17 reward is, the more likely the reward is to undermine intrinsic motivation. However if the reward represents competence, it lessens the undermining of intrinsic motivation. While the over justification approach focuses on the instrumentality between a reward and feelings of autonomy, the cognitive evaluation theory focuses on the experience of feeling controlled (Deci, Koestner, and Ryan, 1999). Cognitive Evaluation Theory Deci and Ryan (1985,2000) first proposed the cognitive evaluation theory in order to clarify which factors affect intrinsic motivation. Cognitive evaluation theory (CET) that factors that control feelings of competence (rewards, communication, feedback) can enhance intrinsic motivation because they satisfy the basic psychological need for competence in the individual (Ryan and Deci, 2000). However, feelings of competence will not raise levels intrinsic motivation unless an individual feels that they have a high level of autonomy as well. Therefore, controllers of behavior such as threats, deadlines, directives, and competition pressure undermine intrinsic motivation (Ryan and Deci, 2000). In short, this theory emphasizes what has been discussed throughout this paper. CET explains that intrinsic motivation in individuals is actually the psychology needs for autonomy and competence, therefore the effects of a reward must meet both needs in order to intrinsically motivate a person. Gagne and Deci (2005) also explained that feelings of competence as well as feelings of autonomy are essential for intrinsic motivation. Danner and Lonky (1981) noted that optimally challenging activities were highly intrinsically motivating, as these reflect a level of competence in the individual. Deci (1971) and Fisher (1978) found that positive feedback enhanced intrinsic motivation because it instilled a feeling of competence in the individual if they felt responsible for their performance. Deci and Ryan (1985a) found that negative feedback undermined both intrinsic and extrinsic motivation, which

18 The Effects of Rewards on Motivation 18 left people amotivated. CET also advocates that there are significant differences that result from the way that an extrinsic reward is administered. Deci, Koestner, and Ryan (1999) explained that typically, positive feedback increases intrinsic motivation and this is mostly true. However, when feedback is administered informationally or controllingly they can produce different results. Controlling administered positive feedback ( keep up the good work ; this is excellent, as it should be ) leads to less intrinsic motivation than does informationally administered positive feedback ( This is great work! compared to everyone else, you are doing really well! ) (Deci, Koestner, and Ryan, 1999). The same concept applies to extrinsic rewards in general, where informational aspects are more effective than controlling factors. Therefore, the goal should be to make extrinsic rewards as informational and as minimally controlling as possible. In order to make rewards more informational and less controlling there are a few actions that must be taken. Deci, Koestner, and Ryan (1999) gave four steps that must be taken in order for a reward to be as informational as possible. The first step is to minimize the use of authoritarian style in the environment where the reward is administered, and reduce any pressure in the environment. The second step is to acknowledge good performance from workers or individuals, but refrain from using rewards to strengthen and/or control the behavior. The third step is to provide choice to the workers about how to effectively complete the task. This is crucial in increasing levels of autonomy in the individual. The final step is emphasizing the interesting or challenging aspects of the task, since interesting and challenging activities naturally increase levels of intrinsic motivation in the individual. An interesting point that Deci, Koestner, and Ryan (1999) make is that rewards are actually more incidental to the process of

19 The Effects of Rewards on Motivation 19 enhancing intrinsic motivation. They are not the quick-fix, so to speak, and should be treated more as an aid in the process of increasing intrinsic motivation. Self-Determination Theory Another important theory to look at when assessing the relationship between intrinsic rewards and motivation is the self-determination theory (SDT). The cognitive evaluation theory is actually a sub-theory of self-determination theory (Ryan and Deci, 2000). SDT distinguishes the different types of motivation as a result of reasons or goals that influence behavior (Ryan and Deci, 2000). Social and environmental factors are also assessed to determine their effect on intrinsic motivation (Ryan and Deci, 2000). The primary goal of SDT is to motivate individuals to appreciate and self-regulate activities that are not considered intrinsically interesting. Within SDT, this is described as fostering both internalization and integration of both values and regulations. Internalization means to accept a value, and integration means to adopt the value and utilize it (Ryan and Deci, 2000). In order to create an environment that facilitates internalization, a sense of belongingness among group members, or relatedness, is essential. Both internalization and integration are necessary for extrinsically motivated behaviors to become more selfdetermined, and thus intrinsically motivated. Under SDT, self-determination is believed to fall along a continuum of motivation as seen below (Gagne and Deci, 2005). Figure 1

20 The Effects of Rewards on Motivation 20 As seen above, self-determination falls along a continuum of amotivation, extrinsic motivation, and intrinsic motivation. Under extrinsic motivation there are four subcategories: external regulation, introjected regulation, identified regulation, and integrated regulation. Each of the subcategories of extrinsic motivation becomes more autonomous, thus more internalized, as it moves along the continuum. A crucial factor in all forms of motivation assessed was the level of autonomy and controlled motivation. Autonomy involves feeling like a person has a choice, which is why intrinsic motivation is a perfect example of autonomous motivation. The person chooses to do the activity because they find it interesting or it satisfies some psychological need central to the individual. Being controlled involves a feeling of having to participate in an activity, or to perform a certain action. Thus rewards are found to contribute to a sense of controlled motivation as seen in extrinsic

21 The Effects of Rewards on Motivation 21 motivation (Deci, 1971). Both autonomous and controlled motivation are intentional, and both contrast the first form of motivation in the SDT continuum which is amotivation (Gagne and Deci, 2005). Amotivation is the lack of both intention and motivation for an activity or task. Amotivation is also said to be lacking entirely in self-determination (Gagne and Deci, 2005). When an activity does not motivate an individual (i.e. not intrinsically interesting) a form of extrinsic motivation is necessary (Gagne and Deci, 2005). When a behavior is motivated in this way it is said to be externally regulated because motivation is contingent upon factors that are external to the person (Gagne and Deci, 2005). External regulation is the least autonomous form of extrinsic motivation an individual can adopt. In this type of regulation, the person is still not interested in the task itself, has no sense of internalization, nor any sense of integration. According to Gagne and Deci (2005), when a person is externally regulated they will perform or complete an activity only to obtain a desired outcome or in order to avoid a negative consequence. The person is only motivated for those reasons, and the activity itself has no value to the individual. This is described by Gagne and Deci (2005) as the classic form of extrinsic motivation typically seen in the literature although it is certainly not the only form. When a person begins to internalize an activity by taking in values or attitudes, external regulation becomes internal regulation (Gagne and Deci, 2005). According to SDT, internalization is a term that refers to three processes in relation to regulation of extrinsic motivation. These three subcategories are introjected regulation, identified regulation, and integrated regulation (Gagne and Deci, 2005). With introjected regulation, the regulation (i.e.

22 The Effects of Rewards on Motivation 22 contingent self esteem) pressures people to behave a particular way in order to feel worthy (decharms, 1968). While this type of extrinsic motivation is a form of internalized extrinsic motivation, it still has a low degree of autonomy. Identified regulation allows people to feel more autonomous due to behavior being more in line with personal goals and values. In this type of regulation people believe the cause of their behavior is due to an internal perceived locus of control, and that they are in control of their actions (Gagne and Deci, 2005). The task may still be uninteresting, and their actions are still controlled by some external factor, however individuals align with the task that they are required to do. The last type of extrinsic motivation discussed is integrated regulation. In this form of regulation, people have a sense that their behavior and task requirements represent who they are (Gagne and Deci, 2005). For example, if a person felt like helping people who were injured was inherent to their nature, they would identify strongly with being a doctor. If that individual were in medical school, they might not mind the workload because they know that the outcome would be worth the input. This is considered the most developmentally advanced form of extrinsic motivation, and shares a lot of qualities that resemble intrinsic motivation (Gagne and Deci, 2005). The significant difference between integrated regulation and intrinsic motivation is that the person is not interested in the activity but they view the activity as instrumental to their personal goals (Gagne and Deci, 2005). The last form of motivation, and the highest level of self-determination is intrinsic motivation. This topic has been covered thoroughly up to this point so it will not be discussed further in this section. Self-Determination Theory and Needs

23 The Effects of Rewards on Motivation 23 Needs have always been viewed as essential to motivation, and affects the influence that rewards may have on the individual. Psychologists such as Harlow (1958) and White (1959) defined needs in SDT factors essential for a high level of human productivity and development. Needs defined by Ryan, Sheldon, Kasser, & Deci (1996) are something that, when present, promotes psychological health and, when absent, undermines psychological health in the individual. In Gagne and Deci s paper (2005), the needs for competence, autonomy, and relatedness are identified as needs that would improve intrinsic motivation and support internalization of extrinsic motivation. Deci et al (2001) assessed the needs for competence, autonomy, and relatedness in workers in both the United States and Bulgaria and found that they were positively correlated, which suggests these are basic needs inherent to all humans. Discussion Motivation is an important phenomenon to understand, especially when analyzing the workforce. This paper has analyzed needs believed to be inherent to motivation, current definitions of motivation, different forms of motivation, different rewards and their effects on motivation, and popular theories regarding rewards and motivation. In sum, the most important thing to understand is that rewards are not simply a solution for all problems and that they should not be treated as such. They are most effective in an environment that supports autonomy and competence, and the context in which they are given should be given great care. One of the most effective rewards was actually the easiest and cheapest to administer, which was positive feedback. More organizations should utilize this simple, easy and free reward to show their appreciation towards individuals and to increase intrinsic motivation. When companies understand when rewards will undermine intrinsic motivation, they will become more aware of when rewards are necessary, increase the effectiveness of their rewards, and ultimately allow

24 The Effects of Rewards on Motivation 24 intrinsic motivation to thrive within all workers creating a strong workforce comprised of motivated individuals.

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