-75%
Solution
Extrinsic rewards
External incentives refer to those that are provided from outside; they may include pay, incentives, and other benefits (Avgoustaki & Frankort, 2023). They refer to aspects, monetary or non-monetary, that are tendered as an inducement to perform a given task or to achieve a goal.
In the near term, increasing employee contribution may be facilitated by extrinsic rewards. Pay that is higher than that of competitors, or even a cash bonus for hitting goals, will motivate staff members to put in more effort and earn more money. This is done by rewarding top performers for hitting sales targets and providing incentives for other salespeople to improve their client service and skill sets in order to reach bonus criteria (Hajduk, 2017). High reliance on extrinsic motivation, however, has the risk of depressing employees over the long term since they will begin working for the sake of earning the reward instead of the work itself.
Intrinsic rewards
According to CIPD (2022), an intrinsic motivator refers to sources of motivation emanating from satisfying or internal activity. The typical example is the capability to learn new skills and knowledge through studying and mastering a new task.
One of the most viable methods to make a long-serving employee participate is intrinsic awards. Employees’ appreciation and motivation can also be significantly increased through recognition programs in which other employees recognise the work of their co-workers. An example can be seen in that when employees are forced to vote for their colleagues or team members who demonstrate great teamwork, it encourages collaboration among the working teams. Public celebration over time satisfies psychological needs for growth and meaningfulness. Due to the fact that employees derive intrinsic satisfaction and significance from the job itself, intrinsic rewards tend to be a better driver of greater performance via intrinsic motivation compared to extrinsic rewards.
Sustained organisational performance
Eco-Insulate can secure its long-term organisational success using instrumental means such as extrinsic and intrinsic rewards. Learning on-the-go, acknowledging effort, and working towards a goal are examples of intrinsic rewards. Psychological fulfilment keeps workers engaged, and an organisation’s culture fits in. According to Avgoustaki and Frankort (2023), maintaining high performance will require material rewards and payment for commitments made over an extended period. The use of extrinsic rewards, such as competitive pay for individual success and corporate performance, further supports strong links of effort to rewards. Although extrinsic rewards are still necessary to keep employees happy and feeling important to the company, intrinsic rewards are more effective in the long run since they motivate people based on the significance of their role. Eco-Insulate will work best if it finds a way to satisfy both the extrinsic needs for fair returns on commitment and the intrinsic needs for growth through learning programs, empowerment, fair variable remuneration, and teamwork.
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