People may strive for reward, but there’s more to money than just economics and more to motivation than the size of a paycheck. Social psychological factors must also be considered. Under certain conditions, reward systems that increase extrinsic motivation may undermine intrinsic motivation. People are thought to be extrinsically motivated when they engage in an activity for money, recognition, or other tangible rewards. In contrast, people are said to be intrinsically motivated when they perform for the sake of interest, challenge, or sheer enjoyment. Business leaders want employees to feel intrinsically motivated and committed to their work. So where do expectancy theory and incentive pro- grams fit in? Is tangible reward the bottom line or not?
Research shows that when people start getting paid for a task they already enjoy, they sometimes lose interest in it. In the first demonstration of this effect, Edward Deci (1971) recruited college students to work for three one-hour sessions on block-building puzzles they found interesting. During the first and third sessions, all participants were treated in the same manner. In the second session, however, half were paid $1 for each puzzle they completed. To measure intrinsic motivation, Deci left participants alone during a break in the first and third sessions and recorded the amount of time they spent on the puzzles rather than on other available activities. Compared with par- ticipants in the unrewarded group, those who had been paid in the second session later showed less interest in the puzzles when the money was no longer available.
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