Question

Both intrinsic and extrinsic rewards are important. What is the specific importance of each? Indicate the role that the employee's age and employment status plays in the use of each reward category.

Answer 1

Extrinsic rewards are the rewards external to the work that may include pay rise, bonus, awards, promotion etc. These can be controlled by individuals through their performance because most of these are awarded based on performance. But intrinsic rewards include internal feelings of personal achievement, satisfaction etc that helps to keep the individual intrinsically motivated. Extrinsic rewards are mostly preferred by the young, low level and middle level employees because they need more pay and reward to grow in the career and fulfill their needs. They have the capability to perform and hence most of the younger workers prefer extrinsic rewards. They value pay rise, promotion etc more valuable than personal satisfaction. But the generation that consists of the older workers prefer intrinsic rewards. They value the feeling of personal achievement while others seek their help based on their experience in the organization. They may not be motivated when they are given a hike in the salary but would be motivated to serve the organization for long if they feel that the organization values their contribution.