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Extrinsic rewards

Extrinsic rewards are things that people get for doing something. They are usually tangible things like rewards, money, or a trophy. But they can also be positive feelings like pride and self-satisfaction.

Managers often use these types of rewards to encourage employees to perform better. The theory behind using these types of rewards is that if people receive some external reward or praise for performing a task well, they will continue to work hard to receive more external rewards.

What are extrinsic rewards?

Extrinsic rewards are things you get for doing something. They are external to your actions and don't come from within you. They are typically monetary in nature, such as pay raises, bonuses, and promotions.

For example, if you have a job that pays $10 an hour and your boss decides to give you a $5 raise, then that is an extrinsic reward.

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Why are extrinsic rewards important?

Extrinsic rewards are important because they encourage employees to work harder and strive for higher goals. They also help motivate employees to perform better because they give them more money or status in return for their efforts.

Extrinsic rewards can be effective at motivating people if they are used correctly. For example, a bonus tied to a specific goal will likely encourage employees to do whatever it takes to achieve that goal.

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 beneficial for motivating employees to work towards one specific organizational goal. For example, offering additional incentives if an employee meets a sales quota is an example of extrinsic rewards used in the workplace.

How do extrinsic rewards work?

Extrinsic motivation works by giving people an incentive to act a certain way. This doesn't mean that they're not acting on their own accord — it just means that they are acting to get something they want or need.

Extrinsic rewards have been shown to have various effects on human behaviour. These include:

They can increase motivation and decrease boredom, especially when a reward is given immediately after completing a task.
They can help people persist on difficult and boring tasks — but only if they believe the reward is attainable and likely to come soon.
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.
Extrinsic rewards such as bonuses or salary increases can help retain valuable employees who might otherwise leave for another company offering better pay or benefits.

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What are the different types of extrinsic rewards?

Intrinsic rewards can be divided into two types:

Autonomy refers to the feeling that you control your actions and how you spend your time. People feel autonomous when they can use their skills and abilities to achieve important goals. This includes having control over their schedule, working in an environment that supports their values, and setting goals for themselves.
Purpose refers to having a meaningful reason for doing something, such as helping people or contributing to society. It's essential for people to feel like what they do matters and contributes positively to others' lives — otherwise known as self-efficacy or self-esteem.

What are the advantages of extrinsic rewards?

Here are some advantages of extrinsic rewards:

They can be used as incentives for specific behaviors.
They help motivate people who lack intrinsic motivation for an activity.
They encourage people to do their best work without worrying about the outcome.
They help improve employee performance by increasing engagement and commitment to the organization's mission and goals.
They help employees focus on specific tasks rather than getting 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 be unreliable and unpredictable.
They can lead to cheating and unethical behaviour.
They don't motivate people to be creative or innovative.
They can create an unhealthy focus on money and things that are materialistic over other intrinsic motivations like personal growth and achievement.
They focus on the result instead of the process.
They can create a short-term culture that doesn't promote growth or innovation.

What are the examples of extrinsic rewards?

The common examples of extrinsic rewards for employees in the workplace are:

Pay
Bonuses
Digital gift cards
Health insurance
Sales commissions
Retirement benefits
Travel reimbursement
Praise and recognition
Incentives and bonuses
Pay hike and promotions
Performance-based rewards

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