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Extrinsic rewards

Extrinsic rewards are a piece of carrot on a stick that helps to achieve better performance. They can be in the form of rewards, money, gifts, or are based on individual efforts.

While these types of rewards do tend to increase productivity in most circumstances, they also influence an employee's attitude and willingness to perform.

What are extrinsic rewards?

Extrinsic rewards are usually financial or tangible rewards given to employees. Extrinsic rewards are benefits that come in the shape of cash, vouchers or tickets.

They can be used to reward performance in a specific behavior and dedication. They can also come in the form of praise and recognition, which is praised by psychologists as effective. This kind of reward is offered when a person's achievements are greater than what was expected.

Why are extrinsic rewards important?

People have a natural tendency to do things that they enjoy and get rewarded for. In the workplace, extrinsic rewards can be used to encourage employees to perform their duties more efficiently.

Here are some of the benefits of extrinsic rewards in the workplace are:

Boosts employee motivation: Extrinsic rewards are often used as incentives to motivate employees to perform better or maintain high standards. They can also be used as a punishment for poor performance by withholding rewards from workers who don't meet their targets.

Improves Employee retention: Extrinsic rewards such as bonuses or salary increases can be used to retain valuable employees who might otherwise leave for another company offering better pay or benefits.

Build teamwork: Extrinsic rewards help build teamwork among employees because they allow them to work together towards common goals. When people work together with shared goals, they tend to develop stronger relationships with each other as well as stronger commitment towards achieving those goals successfully.

Helps in performance improvement: Employees who feel motivated by extrinsic rewards will be more likely to improve their performance over time than those who don't receive any external motivation at all.

Increases employee productivity: They increase employee productivity because employees have something to work toward achieving such as raises, promotions and bonuses. When employees know that their hard work will result in something positive such as a raise or promotion, they tend to work harder so that they can reach their goals faster so that they can receive their reward sooner rather than later.

When should extrinsic rewards be used in the workplace?

Extrinsic rewards should be used when you have a specific goal in mind that you know your employees will find rewarding. They are particularly useful in the short-term for motivating employees to work towards one specific organizational goal. For example, offering additional money if an employee meets a sales quota is an example of extrinsic rewards used in the workplace.

How does extrinsic reward work?

Extrinsic reward works on the carrot and stick appproach. It is doing what you do with the aim of achieving something that you are hoping to receive. It is an external reward system. It is not you feeling motivated and going out and doing what you need to do. It is motivation that comes from something added on to you already doing the work.

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What are the different types of extrinsic rewards?

There are two main types of extrinsic rewards that help to improve employee motivation:

Monetary rewards: These include money, bonuses, and raises. Money is a powerful motivator and can be used to reward both individual performance and team performance.

Non monetary rewards: These include praise, public recognition, and awards such as trophies or plaques. Public recognition can be an effective way to reward employees for their efforts because it encourages others to follow their example and reinforces the importance of their work.

What are the advantages of extrinsic rewards?

The advantages of extrinsic rewards are:

They can be used as incentives for specific behaviors.
They can be used to motivate people who lack intrinsic motivation for an activity.
They help people to focus on doing their best work without worrying about the outcome.
They can help improve performance by increasing employee engagement and commitment to the organization’s mission and goals.
They help employees focus on specific tasks rather than get distracted by other things around them.
They can motivate people to work harder and longer than they would without any incentives.
They are easy to implement and administer.

Encuestas sobre el pulso de los empleados:

Se trata de encuestas breves que pueden enviarse con frecuencia para comprobar rápidamente lo que piensan sus empleados sobre un tema. La encuesta consta de menos preguntas (no más de 10) para obtener la información rápidamente. Pueden administrarse a intervalos regulares (mensual/semanal/trimestral).

Reuniones individuales:

Celebrar reuniones periódicas de una hora de duración para mantener una charla informal con cada miembro del equipo es una forma excelente de hacerse una idea real de lo que les pasa. Al tratarse de una conversación segura y privada, te ayuda a obtener mejores detalles sobre un asunto.

eNPS:

eNPS (employee Net Promoter score) es una de las formas más sencillas y eficaces de evaluar la opinión de sus empleados sobre su empresa. Incluye una pregunta intrigante que mide la lealtad. Un ejemplo de preguntas de eNPS son ¿Qué probabilidades hay de que recomiende nuestra empresa a otras personas? Los empleados responden a la encuesta eNPS en una escala del 1 al 10, donde 10 significa que es "muy probable" que recomienden la empresa y 1 significa que es "muy improbable" que la recomienden.

En función de las respuestas, los empleados pueden clasificarse en tres categorías diferentes:

Promotores
Empleados que han respondido positivamente o están de acuerdo.
Detractores
Empleados que han reaccionado negativamente o no están de acuerdo.
Pasivos
Empleados que se han mantenido neutrales con sus respuestas.

What are the disadvantages of extrinsic rewards?

The disadvantages of extrinsic rewards are:

They can lead to cheating and unethical behavior.
They don’t motivate people to be creative or innovative.
They can create an unhealthy focus on money and material things over other intrinsic motivations like personal growth and achievement.
They focus on the end result instead of the process.
They can create a short-term culture that doesn't promote growth or innovation.
They can be unreliable and unpredictable.

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Note: Pushing an employee too far with extrinsic rewards can result in demotivation due to over-reliance on extrinsic motivations, which can result in less efficiency than intrinsic motivations.