What Are Intrinsic Rewards and Why Are They Important?

By Indeed Editorial Team

Updated 14 September 2022

Published 8 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you're working as a manager or in a senior position, knowing how to keep your team satisfied in your job can be important to you. This is usually important in competitive industries like food and beverage or technology industries, where employees may job hop more often if they're not motivated in their role. Knowing what are intrinsic rewards can help with performance and keep your coworkers motivated. In this article, we explore what intrinsic rewards are and explain why they're important in the workplace.

What are intrinsic rewards?

During your career, you may hear about motivation techniques and wonder, 'What are intrinsic rewards?' There are two kinds of rewards employees may receive in the workplace. These are intrinsic and extrinsic rewards.

Intrinsic rewards are psychological rewards that employees in a company receive when they feel like they're performing well at their job and are doing meaningful work. Intrinsic rewards can be tougher to identify and quantify, since they're intangible rewards and may vary from person to person. For example, some professionals may intrinsically feel motivated to achieve a set goal. Intrinsic rewards are important since they motivate you to do better in your job over time and can contribute to positive job satisfaction and good mental well-being.

Related: Tips on How To Be Motivated at Work

What are extrinsic rewards?

Extrinsic rewards are tangible rewards that you may notice in the workplace. These can be rewards, such as an extra off day, work benefits, a cash bonus or a certificate of acknowledgement. Extrinsic rewards are externals to completing your work and are controlled by other people like your employer or manager rather than yourself. These rewards are important to motivate employees at the start since they're tangible rewards that employees can experience immediately, but they have limited impact if they're not increased over time.

Related: What Is Intrinsic vs. Extrinsic Motivation? (With Examples)

Examples of intrinsic rewards in the workplace

Since intrinsic rewards can be tougher to identify in the workplace, there are different ways to look for them. Fostering activities that can promote intrinsic rewards can help grow and motivate your team to contribute to a positive work environment. Intrinsic rewards may include:

Completing tasks that may be meaningful

When employees complete a task that's meaningful to them, it can be intrinsically rewarding. Employers and superiors can make use of this reward by talking to employees to find out what they think is important to them in their job. With that knowledge, employers can give tasks that employees find important to give them a sense of importance and purpose in the workplace.

Example: Sarah works as a social worker in a government agency and feels that the most meaningful part of her work is reaching out to families to connect with them during her job. Sarah's manager notices this and decides to let Sarah start her workday by calling her clients' families to check on her clients' progress. This leads to Sarah feeling motivated to do better in her job since she is starting her workday doing a meaningful task.

Feeling competent after completing a task

The feeling of competence is important as employees feel like they're rewarded when they're good at their job. If a professional feels like they can succeed in their role, it might encourage them to achieve more. Giving an employee complex tasks they can complete and motivating them to complete similar tasks regularly can promote a sense of competence in them.

Example: John is an electrical engineer who works with computer wiring in a lab. He recently was given a new software to work on and was not clear on how it worked at first, but with more time spent on it, he became more comfortable with the software. After a period of time, he felt confident in handling the software and felt rewarded through his competence in the software. John's manager can continue letting him learn new software and equipment and be in charge of handling them after to keep him motivated.

Making progress

When employees can see the progress they're making at work, they can receive an intrinsic reward for it. Even if the progress is slow, noticeable progress can contribute to a more motivated employee. This gives them a sense of accomplishment and personal fulfilment that they're doing well in their job.

Example: Gerald is an IT software engineer who codes and troubleshoots various software for his clients every day. To keep him motivated, Gerald's manager gives him a checklist of the tasks he has that he can check off whenever he completes a task. When Gerald checks off multiple tasks in a day, he feels motivated to continue doing well at his job, since he is making good progress on his tasks.

Feeling like you're contributing to their team and feeling accomplished

Feeling like you're part of a team is important since it promotes inclusivity. It promotes a kind of intrinsic reward that keeps you motivated to perform better so that you can contribute more to your team and stay focused on your work. Getting recognition from your team members when you perform at your job can also help you feel motivated. This also gives you a sense of accomplishment, helping you feel like you can contribute even more at your job.

Example: Carol is an account manager in a marketing agency. Her first role is to manage her creative designers, content strategists and clients for a project. As an account manager, being able to keep the team on track to complete deadlines and meet goals can let her feel like she's contributing to her team. This helps Carol feel important and accomplished whenever the team hits deadlines together.

Related: 11 Team-Building Activities for Companies (With Tips)

Learning or mastering a new skill

Learning or mastering a new skill gives you an intrinsic reward that can greater motivate you in your job. This reward usually comes as on-the-job training, online courses or educational retreats or further learning. When an employee learns a new skill, they may feel that they can apply it to their current role in their job, which leads to motivation to try it out at work. Investing in your staff members' progress can also lead to them performing better at their job and contributing effectively to the company.

Example: Stacy is a yoga teacher who teaches basic yoga in a school. Recently, she learned aerial yoga as part of her self-development efforts. This motivated her to master the art of aerial yoga so that she can move on to teaching more advanced yoga classes instead of the basic yoga she's teaching now.

Related: The Importance of Training Employees (With 11 Benefits)

How to include intrinsic rewards in the workplace

If you're in a management or team leader role, you may be able to add intrinsic rewards for your team members. Here are some ways to introduce intrinsic rewards at work:

1. Enforce a good work culture

Having a good work culture and environment is very important to many employees. Ensuring that a good work culture is present at work means that intrinsic rewards are a priority since the employees' welfare and well-being are important to the company. If you're currently working in an environment without a good work culture, making small steps to enforce a good work culture can be a good starter. Researching companies that have made culture shifts can help you decide what steps to take to improve your work culture in the office.

Related: What Is Employee Retention and How to Improve It (With Steps)

2. Give employees more freedom

Having a sense of autonomy in the workplace can be important to some employees since they feel more motivated when they can make decisions and choices in their job without being micromanaged daily. Letting your team members have the freedom to choose what they want to do daily in their role and manage their own tasks can be a form of intrinsic reward. This gives employees a sense of ownership, which can encourage them to have a sense of leadership since they're in charge of their role.

3. Promote interaction within the workplace

Humans desire social interaction as it leads to them feeling connected to others. Promoting workplace interaction amongst employees can serve as a good break, encourage understanding of their colleagues and result in a healthier and happier workplace. Being able to interact with others in their job can also be a form of intrinsic reward, since they may feel more relaxed while doing their job.

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