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Importance of Intrinsic Rewards for Motivating Employees

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Importance of Intrinsic Rewards for Motivating Employees

The dynamics of keeping employees engaged and motivated have changed significantly over the past several years. One of the biggest changes in this context has been the growth in the importance of intrinsic rewards, which are increasingly replacing material and monetary rewards.

Organizations are increasingly becoming aware of the fact that traditional rewards such as salary increments, bonuses, and other monetary incentives are no longer enough to keep employees motivated.

What are Intrinsic Rewards?

A Guide to Rewards and Recognition for Learning and Development

Intrinsic rewards are those that come from within the workforce itself and offer the employees a sense of value for the work they do.

These rewards are called intrinsic as they are internal concerning the work being done by the employees and are achieved by their efforts.

Autonomy, sense of purpose, career growth, and learning are some examples of intrinsic rewards.

Why are Intrinsic Rewards so Important?

Extrinsic rewards such as salary increments, bonuses, and other monetary incentives have their limitations.

Their impact does not last long and requires constant stimulus from the organization.

They can also be much more easily outdone by competitors looking for talent as they are heavily dependent on the budgets available.

Unlike extrinsic rewards, intrinsic ones offer longer-lasting benefits as they have psychological and emotional impacts on the employee.

It provides individuals with an inner drive to pursue an activity that makes them feel happy and satisfied, which in this case is their job and the responsibilities associated with it.


Keeping their employees engaged and committed to the business objectives is quite challenging, especially in the workplaces of modern times.

An effective way for organizations to create and sustain a healthy, flourishing, and engaging work culture is to tap into intrinsic employee rewards.

What are the Examples of Intrinsic Rewards?

Here are five ways organizations can reward their employees intrinsically to enhance their overall motivation and engagement levels:

1. Empowerment

2. Appreciation

3. Camaraderie between Co-workers

4. Opportunities for Career Growth

5. Learning and Development

Examples of Intrinsic Rewards

1. Empowerment

Empower Employees and Create an Innovation Funnel

Most high-performing employees seek greater control of the tasks and projects being handled by them, at the minimum.

Hence, empowering the employees to take greater responsibility for their jobs and tasks gives them a sense of ownership and pride in their work.

This increased autonomy is considered by many to be equivalent to the best employee recognition they can receive.

Hence, it motivates them to work with total commitment and dedication towards the successful completion of their assignments.

2. Appreciation


Employees, in general, cherish the desire to make a difference in the workplace and be valued for the same.

Organizations can help fulfill this desire of the employees by developing an authentic culture of purpose that provides a rallying point for the employees.

Encouraging the employees to find meaning in the work they do by appreciating and highlighting the impact of their work in the overall context of the organization is a great first step towards building a highly motivated and purpose-driven workforce. 

Once employees understand the importance of their work and their roles, they are driven by this sense of purpose. Achievement of goals drives self-fulfillment.

3. Camaraderie between Co-workers

Social Recognition as a Multiplier for Employee Recognition?

Social interaction with their co-workers can help in building a positive work culture

Informal activities such as breakout sessions, office parties, team outings, etc. create strong social and emotional connections between co-workers.

Such opportunities for social interaction often prove more effective than any tangible rewards aimed at motivating and engaging the employees.

Hence, organizations should facilitate such opportunities for employees to connect and interact socially; they develop a sense of caring and sharing in the process.

4. Opportunities for Career Growth

Measure The Impact Of The Program

Most employees seek professional growth and success. Providing such opportunities can help enhance employee motivation levels significantly, which, in turn, results in improving their productivity and performance.

Establishing clear career growth paths in the organization can motivate them to perform at a higher level and stretch themselves.

Providing coaching and mentoring by seniors in the organization can help them to achieve their career goals.

5. Learning and Development

Learning and Development can Promote Employee Engagement

Helping employees learn new skills and competencies that can enhance their personal and professional growth is one of the best intangible rewards that organizations can offer.

Employees feel valued and appreciated knowing that the organization is concerned about their development.

Employees do their best to acknowledge the care and concern demonstrated by the organization in their development and well-being.

They develop a deeper sense of loyalty and belonging towards the organization.

This drives higher levels of performance and greater engagement of the employees.

Read 10 Best Non-Monetary Awards for Employee Recognition


The importance of intrinsic rewards stems from the fact that they offer an effective and low-cost way for organizations to engage employees and derive longer-lasting benefits.

These intrinsic rewards can create a sense of joy, fulfillment, happiness, and satisfaction among the employees, which in turn will drive greater performance.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of corporate and entrepreneurship experience. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.