November 13th, 2012 by Michael Smalls


The Truth About Intrinsic and Extrinsic Motivation

This is part one of two in our series on intrinsic and extrinsic motivation.

It’s a question as old as sales management itself: How do you keep your sales team motivated? Naturally, there’s no one right answer. Methods of motivation vary by industry, company, and team. What’s effective for one group might backfire with another. Nevertheless, every manager is striving to not only excite employees about their work, but get them invested in the company’s mission as well.

Motivation is a continuous cycle, and to truly understand how to motivate employees, you first have to understand motivation itself. Psychologists and economists have been studying it for years, and that research can help sales managers give their employees the kick in the pants they need from time to time. This article dives deeper into motivation and what can help drive your employees.

Intrinsic vs. extrinsic motivation

First, understand that there are two major types of motivation: intrinsic and extrinsic. They operate like this:

  • Intrinsic motivation comes from within. It’s the self-generated enthusiasm for a project or task that is the most powerful form of motivation.
  • Extrinsic motivation comes from outside, typically in the form of rewards or incentives that encourage someone to achieve a certain milestone and receive a prize–the carrot in the stick-and-carrot analogy.

Most employee motivation starts extrinsically because managers have greater control over incentives and rewards than a worker’s beliefs and interests. Salary, bonuses, commissions, sales contests, and so on are all extrinsic motivations that employers put in place and adjust based on performance to motivate employees to perform their best.

But while extrinsic motivation can jumpstart a behavior, it can’t sustain that behavior beyond the receipt of the reward. Every sales contest will eventually end, and workers will no longer perform the incented behavior unless they see the value in doing so for their own benefit. The most effective extrinsic motivations resonate intrinsically, creating a loop that sustains the motivated behavior over time.

In the second part of this series, we’ll look at ways to use extrinsic motivation to fire up your employees’ intrinsic motivation.

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Michael Smalls

About Michael Smalls

Michael Smalls is the founder and CEO of Hoopla. He has more than 25 years of experience in the technology industry as a sales executive at several startups, and as a leader of a variety of teams at larger companies. Prior to Hoopla, Michael was Executive Vice President at ClickEquations, a SaaS paid search platform for large advertisers and agencies. In 2004, he joined the founding team of Turntide, an innovative anti-spam company, as VP of Sales. TurnTide was acquired by Symantec, where Michael became Director of Emerging Products Sales. Earlier in his career, Michael held sales management roles at innovative startups like Destiny Software and Kurant (acquired by eBay), and at Symantec as it grew from $50 million to over $650 million in sales.

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