This post is offered by my PfP Consulting partner, Harry Koolen (https://www.tildensst.com/who-are-we/profile-koolen/). As noted in the title, he offers follow-up thoughts on the last post by mutual friend Matthijs van der Want on Intrinsic Rewards – When Theory Meets Reality. In plain terms, I think it is an important read for anyone interested in rewards and motivation for people of any ilk, not just salespeople. Harry’s can be reached at [email protected]. Thanks – AJT
Matthjis Van Der Want’s insightful post addresses a quandary that every organization faces when seeking to get the optimal performance from its sales force. Too often, sales incentive systems are based upon unspoken and often flawed assumptions about the nature of human motivation, leading many sales leaders to conclude, as Mr. Soetens did in Matthijs’ example, that their motivational tool kits are incomplete if they lack “sticks” to influence salespeople’s behaviors. I agree with Matthjis that a deeper understanding of intrinsic rewards, informed by Self-Determination Theory (SDT), can add significantly to this solving this dilemma.
As Matthijs indicated, SDT posits that people benefit psychologically and emotionally to the extent that their basic psychological needs of autonomy, competence, and relatedness are satisfied. So what are some possible reasons why the new reward system implemented by Mr. Soetens, which was specifically designed to satisfy intrinsic motivational needs, did not work with the new salespeople? A closer look at SDT and intrinsic reward theory provides some additional insights.
SDT distinguishes between two types of motivation: intrinsic – acting with a sense of one’s own choice or volition; and extrinsic – acting with a sense of external pressure or contingent consequences. Early theories of motivation, which still inform the thinking of many sales leaders, held that intrinsic and extrinsic motivation were dichotomous. In other words, you had to design your reward system on the basis of one or the other type of motivation.
More recent research has demonstrated that the two types of motivation lie along a continuum (Gagné & Deci, 2005), from controlled (extrinsic) to autonomous (intrinsic). Significantly, intrinsic motivation can actually include certain types of extrinsic motivation that have been internalized by the employee. According to Gagné and Deci (2005), internalization of a behavior-controlling reward occurs if the employee is able to associate the external regulation with an important personal value such as mastery of a task or providing help to someone, thus transforming the regulation into an intrinsic source of motivation.
This is an important point for sales leaders to recognize when designing and managing incentive systems, in part because SDT also postulates two perspectives on the pre-conditions that support or undermine intrinsic motivation: factors in the work environment and factors related to interpersonal traits (Gagné & Deci, 2005). It is the interaction between events in the environment and interpersonal traits that affect the levels of intrinsic motivation, at least with respect to complex or interesting tasks (Hagger & Chatzisarantis, 2011).
These interpersonal traits have been referred to by researchers as general causality, or work value, orientations (Vansteenkiste, et al., 2007; Hagger & Chatzisarantis, 2011), of which there are two. Individuals with an extrinsic work value orientation are primarily motivated by the pursuit of goals such as status and high income, and they tend to have a control causality orientation. Individuals with an intrinsic work value orientation have a natural desire to develop and grow at their jobs, build meaningful relationships with colleagues, and help others in need, and they tend to have an autonomous causality orientation (Vansteenkiste, et al., 2007).
The more senior salespeople in Matthijs’ case, those who stuck with extrinsic rewards, may be representative of the extrinsic work value orientation. Alternatively, the workers who requested the new intrinsic compensation plan likely represent individuals in the second category, those with an intrinsic work value orientation.
As with the relationship between intrinsic and extrinsic motivation, causality orientations are not considered to be mutually exclusive; instead, they are also hypothesized to exist along a continuum. Thus, it is possible that the same individual can have moderate levels of both intrinsic and extrinsic causality orientations. Therefore, when dealing with individuals who exhibit characteristics of an extrinsic work orientation, sales leaders should nurture a culture that promotes the internalization of contingent performance incentives. As Vansteenkiste, et al. (2007) point out, there is a subtle but important distinction between management actions that are seen as controlling and those that are perceived to be informational. They recommend presenting performance feedback in an informational, non-controlling manner because individuals are more likely to interpret the feedback (and its attendant rewards) as opportunities to demonstrate and enhance competence.
Conclusions for Sales Leaders
Back to the experience of Mr. Soetens in Matthijs’ case. As Matthijs correctly observes, employee motivation will be influenced by both the structure of the reward system and the cultural / organizational context within which the reward system is administered. To these factors we can now add two more, also supported by SDT research: individual staff member’s work value orientations1 and staff perceptions of how the reward system is being managed. In other words, to facilitate the internalization of extrinsic rewards, sales leaders should seek to frame their comments in informational terms, not controlling terms, when providing performance-related feedback to salespeople. This calls into question Mr. Soetens’ belief that his incentive system failed with the new sales people because it did not provide him with a controlling “stick”.
A final thought on extrinsic versus intrinsic motivation (from the commencement address* given by John C. Vogle, Founder of the Vanguard Group, to the 2007 MBA class at Georgetown University)
At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch 22 over its whole history. Heller responds, “Yes, but I have something he will never have . . . Enough.”
*Bogle’s full address is available at: http://www.thebusinessofgood.org/library/post/2014/10/26/Article-of-Interest-Georgetown-Commencement-Speech-by-John-C-Bogle.aspx
1 Causality orientations can be tested by using the General Causality Orientations Scale (GCOS) developed by Deci and Ryan. See the SDT website at: http://www.selfdeterminationtheory.org/general-causality-orientations-scale/
Deci, E. L., & Ryan, R. M. (1985). The general causality orientation scale: self-determination in personality. Journal of Research in Personality, (19)2, 109-134.
Gagné, M., & Deci, E. L. (2005). Self-determination theory and work motivation. Journal of Organizational Behavior, 26(4), 331-362.
Hagger, M. S., & Chatzisarantis, N. L. (2011). Causality orientations moderate the undermining effect of rewards on intrinsic motivation. Journal of Experimental Social Psychology, 47(2), 485-489.
Vansteenkiste, M., Neyrinck, B., Niemiec, C. P., Soenens, B., Witte, H., & Broeck, A. (2007). On the relations among work value orientations, psychological need satisfaction and job outcomes: A self‐determination theory approach. Journal of Occupational and Organizational Psychology, 80(2), 251-277.
See also Daniel Pink’s highly entertaining and informative video on the surprising power of intrinsic motivation. Available at: https://www.youtube.com/watch?v=u6XAPnuFjJc