Incentive Theory Explained: 3 Types of Incentives

The incentive theory of motivation states external rewards and punishments are the primary cause of an individual’s behavior, as opposed to internal factors. This theory evolved out of the classical conditioning school of behaviorism. In a broader sense, these sorts of behaviorists believe training human beings to respond to external reinforcement is easier than insisting they perform tasks solely due to intrinsic motivation.

In the real world, the incentive theory works by offering extrinsic incentives to encourage and discourage certain types of behavior.

Consider this from the perspective of Maslow’s hierarchy of needs. Suppose someone has met all their basic and psychological needs, leaving just the apex of Maslow’s pyramid to still satisfy: the need to self-actualize. Incentive theorists would insist people need both positive and negative incentives to achieve this form of self-actualization.

Imagine someone has yet to fulfill their full potential at their current job. If their manager offered them a promotion, they might be more likely to work harder to achieve their maximum potential than if their only reward was self-satisfaction. Other motivational theorists disagree with this externally motivated approach. For instance, the overjustification theory suggests people might actually feel less motivation when given too many extrinsic incentives.

People derive motivation from all sorts of external sources. Here are three of the most common:

1. 1. Compensation: Everyone needs money to survive and thrive in contemporary society. Compensation has become one of the primary extrinsic motivations in the world. People often seek out higher income with more fervor than they do in pursuit of many other non-monetary incentives, simply because it’s necessary to meet basic needs.
2. 2. Recognition: Receiving attribution and praise is another commonly sought external incentive. Workplace incentives can include a job promotion or the avoidance of a demotion. In school, students hope to achieve good grades, athletic recognition, or a prominent place in extracurricular activities for the same basic reasons.
3. 3. Security: Stability and security are extremely motivating external incentives. For example, job security allows a person to live with less stress. Similarly, the lack of security can also prove a powerful extrinsic motivator, as people aim for a greater sense of ease and stability.

In your career, learning to apply the incentive theory could help you achieve greater success. Keep these tips in mind as you try to put it into practice:

• Decide which incentives motivate you. Determine the positive incentives capable of motivating you to engage in behaviors beneficial to your career. The value of an incentive derives from its ability to motivate you to succeed and achieve your goals.
• Prepare to work without incentives at times. While workplace incentives are helpful, you’ll occasionally have to complete your tasks without much positive reinforcement. Try to supplement external incentives with other strategies to call up motivation internally when necessary.
• Provide your team with incentives. Reach out to the rest of your team to see how you can use incentives to empower them to achieve their own goals. When everyone stands to gain from meeting a goal, the entire team will have a greater chance of success.

Psychologists believe motivation comes from various places. Consider these three theories:

1. 1. Arousal theory: Different situations lead to different amounts of arousal or excitement for people. This theory states people might still seek external stimuli to motivate themselves (as in incentive theory), but they also might withdraw inward to try to reduce excitement at times, too.
2. 2. Drive-reduction theory: Rather than seek out external rewards, some people simply want a sense of stability. The drive-reduction theory of motivation insists people will seek out any means necessary, both internal or external, to reduce needs and return to a point of homeostasis.
3. 3. Incentive theory: This concept revolves around rewards and punishments as the primary motivators of people’s behaviors. In other words, individuals perform certain actions to seek pleasure and avoid pain.
4. 4. Instinct theory: Some psychologists believe all human behavior proceeds from an instinctual place, rendering operant conditioning largely futile or at least somewhat impotent. This theory states people will do what it takes to fulfill their psychological and physiological needs even if it goes against their societal training, so long as the circumstances are dire enough.

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