Explain the advantage or disadvantage of intrinsic and extrinsic rewards in the workplace

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thanatassa | College Teacher | (Level 1) Distinguished Educator

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Extrinsic rewards: The advantage to an extrinsic rewards system is that is it is fairy simple to implement. One rewards desirable behaviours with money or other immediately tangible benefits (better parking, more vacation. etc.) Financial rewards, or even types of prestige award such as "Employee of the Month" that can go on resumes are ones most employees will appreciate. Disadvantages are that this can get expensive and also that employees will focus not on doing all aspects of the job well, but just on getting the extrinsic rewards, as when CEOs maximize their bonuses by going for short term profits over long term health of the company. It can also foster a corporate culture of competition rather than cooperation. Also, employees working merely for extrinsic rewards may leave if offered more money by another company,

Intrinsic rewards: The advantage is that if the job is intrinsically rewarding, employees will be loyal and dedicated and work hard because they enjoy what they are doing. Many non-profit organizations rely on intrinsic rewards, people who feel rewarded because they can see that they are benefitting others. The disadvantage of intrinsic rewards is that they are much harder to implement, especially for inherently routine tasks and often they require management to trust and empower employees.

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