EXCLUSIVITY OF INTRINSIC AND EXTRINSIC DRIVERS
Gathering that performance is affected by intrinsic and extrinsic factors, question arises whether are these two factors mutually exclusive on their effect over performance? Few empirical attempts show that they are more relative with regards to performance (Cerasoli et al., 2014). Gathering more evidence might shed some light on this subject.
Compensation is important to employees (Gupta & Shaw, 2014) and intrinsic motivation is positively affected due to incentives (Shaw & Gupta, 2015). It is easy to believe that money is authoritative as it is an essential commodity in day-to-day life. Extrinsic drivers such as merit-pay, promotions, and incentives do have a substantial effect on behavior and performance even when it is cultivated.
From self-determination theories and situations where extrinsic motives are absent, we discover that intrinsic motivation is a crucial performance determinant despite its variation with demographics (Cerasoli et al., 2014). Performance boosts with intrinsic motivation, but is it really required for routine and non-creative type work. The jobs where purpose, autonomy, progress and mastery (Fitzgerald, 2013) is felt through intrinsic motivation, leadership is developed even among the undermost individuals. The performance will increase multiple folds as work becomes an intimate connection to existence.
Incentives are like a supercharger in a car just to boost performance, which operates at the expense of morale, job-satisfaction, and personal well-being which may not be worthwhile (Cerasoli et al., 2014). Compensation act as a catalyst in the work environment which encourages to perform more, but it could affect crucial co-operative skills and leadership...
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... difficult to distinguish between inadequate and exemplary performance. It takes time to draw a more stabilized system to assess employee performance which would be reliable.
There is no standardized PFP system (Beer et al., 2004) that will address the employee voice and respond in a way that best fits the organizational purpose, goals and culture. The way incentives are administered could create complications (Shaw & Gupta, 2015). Use of feasible strategies in way that uses incentives to boost and do not affect intrinsic motivators will bring remarkable outcomes.
The best way to start avoiding issues in PFP is through group bonuses, gain-sharing, profit-sharing (Hansen, 2008). These forms of pay recognize collaborative and interdependent work culture which is common today. They are effective than individual incentives or merit-pay could impair teamwork.
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