Why extrinsic reward systems may not work well in some organizations Assignment

Why extrinsic reward systems may not work well in some organizations - Assignment Example That need hierarchies can differ between organizations, cultures, and indeed, among individuals within the same organization and therefore should not be overlooked by a manager. Rewards must be examined and analyzed in terms of according the right motivation to the employees depending on their needs that majority of the personnel exhibit in the organization. Rewards consist of two types: the intrinsic (personal) and the extrinsic (material). According to the Business Dictionary, an intrinsic reward is an â€Å"outcome that gives an individual internal (personal) satisfaction such as that derived from a job well done† (Business Dictionary, 2010, par. 1). On the other hand, an extrinsic reward means â€Å"common, routine, or known-reward which, because it was expected by the recipient employee, does not lead to his or her greater satisfaction; these are analogous to hygiene factors† (Business Dictionary, 2010, par. 1). Some organizations do not provide incentives that would address to satisfy material needs or lower level needs of the employees (hygiene factors) because while Maslow’s theory suggests that all needs are motivators so long as they remain unsatisfied, in Herzberg’s scheme, only higher-order needs are motivators. In this regard, organizations tend to focus on giving intrinsic rewards such as recognition, advancement, achievement and responsibility that is perceived to be intrinsically rewarding to majority of their personnel in the long