When it comes to new ways to motivate your team, incentives, and rewards each plays crucial roles in encouraging employees to excel and take their performance to the next level. Not only can they encourage your team to go above and beyond, but they also help show appreciation for their efforts — something that can have hugely beneficial effects on retention.

But what are the key differences between incentives and rewards? Aren’t they the same thing?

While incentives and rewards can be used interchangeably, they are, in fact, quite different. Incentives are planned motivators tied to specific objectives, whereas rewards are usually unexpected and given in recognition of past achievements.

Key theories explaining the motivation

Two major theories provide insight into how incentives drive behavior:

• Reinforcement theory: according to this theory, behaviors are more likely to be repeated if they lead to positive outcomes. Conversely, negative outcomes discourage those behaviors. For example, if every time you hit a certain sales target, you receive a bonus, you are more likely to try to achieve above and beyond what is expected of you. On the other hand, if you are asked to attend a disciplinary meeting every time you are late for work, you’re more likely to make every effort to arrive on time the next day.
• Self-determination theory: this framework emphasizes two primary forms of motivation:

1. Intrinsic motivation: driven by the inherent enjoyment or interest in a task.
2. Extrinsic motivation: driven by external rewards, such as bonuses or recognition.

The power of intrinsic rewards in employee engagement and organizational growth

When considering how to incorporate intrinsic rewards into your day-to-day team motivation strategy, there are a few things to keep in mind. After all, you want to make sure you’re using the strategy to its full effect.

Studies have shown that intrinsic rewards can significantly improve employee contribution to the workplace and sustain organizational performance by fostering inherent satisfaction and motivation across a team.

When employees are intrinsically motivated, they are driven by enjoyment and the challenges of their work rather than by external rewards or pressures. In other words, your team comes to work because they want to be there as they enjoy their role rather than feeling like they have to.

This internal motivation encourages behaviors such as curiosity, exploration, and creativity, which subsequently improve cognitive, social, and professional skills.

As employees grow in their roles, their personal development translates into better performance and greater contributions to the organization. It’s a win-win: your team improves their professional skill set, and the employer benefits from a happy, fulfilled team.

When employees feel competent and trusted to carry out their roles without extensive oversight, their intrinsic motivation increases, leading to higher engagement and sustained effort in their tasks.

By incorporating positive performance feedback, optimal challenges, and a supportive environment that fosters autonomy, employers can further amplify this motivation and create an environment for their teams to flourish.

This is a key area that we have focused on at Growe; we want to provide an environment that allows our team members to shape the company’s development and pursue new professional opportunities. We do this through regular educational workshops, regular town hall-style meetings where everyone can speak up, and have an internal mobility that allows individuals to explore progression opportunities.

Environments that support intrinsic motivation, such as autonomy-supportive leadership and opportunities for self-direction, lead to greater curiosity and a desire for challenge. Conversely, controlling environments that rely heavily on extrinsic rewards can undermine intrinsic motivation, reducing initiative and learning outcomes.

For example, a game developer may spend extra hours designing a new game because they love the creative process and enjoy seeing ideas come to life. They find great satisfaction and fulfillment in their work. As the old saying goes, “If you love the job you do, it feels as though you’ll never work a day in your life!”

How extrinsic motivation influences performance and behavior

We’ve explored intrinsic rewards, but now it’s time to explore extrinsic motivation. In organizational behavior, extrinsic motivation has been shown to significantly influence an employee’s actions and behaviors. The most common way this is exhibited is through compensation, bonuses, and benefits, which our company uses as a specific reward for contribution to the company’s development. The aforementioned motivation in a form of social recognition in the company encourages other employeers to their further development and attention to detail in every project disrtributed within the company. Additionally, intangible rewards, such as praise and peer recognition, also play a significant role. A ‘shout out’ during a company call or an email from their line manager praising their work can provide the motivation and reassurance they need.

Extrinsic rewards can be a great way of stimulating an employee’s interest in tasks, which, from the outset, might seem unappealing. Instead, a reward may encourage acquiring new skills and knowledge to make a particular task easier in the long run. Management can also use these rewards as feedback on employee performance.

If we go back to the game developer’s example, in the case of extrinsic motivation, this particular team member might choose to work overtime to finish a game update by the deadline set by their line manager in the hope of receiving a bonus and recognition from his peers and supervisors.

However, while extrinsic rewards can be beneficial, relying solely on them is not advisable. Employees with strong intrinsic motivation tend to stay motivated in a long-term. Excessive external rewards, on the other hand, can diminish intrinsic motivation, and in some cases, your team might begin to expect these rewards rather than appreciate them. It’s no longer a ‘reward’ if it’s guaranteed.

Supporting intrinsic and extrinsic motivation at Growe

At Growe, we strive to support both intrinsic and extrinsic motivation. We provide a wide range of opportunities for our employees to engage in interesting projects, take on new challenges, and grow their skills within the company.

From collaborative projects that require creative problem-solving to development programs that encourage learning, we create an environment where employees are motivated by curiosity and the opportunity to excel together as a team.

We want our team to feel fulfilled and engaged in their roles here at Growe — part of the way in which we do that is by finding new challenges and fostering a culture of curiosity and creativity that allows everyone in the team to expand their own personal and professional horizons.

One of our key initiatives is Game On, developed by our brand team as a practical application of extrinsic motivation. Through the Game On initiative, employees can engage in meaningful activities that are aligned with their personal and professional interests — in a way, adding value and an extra degree of excitement to their day-to-day roles.

Taking inspiration from the innovative world of iGaming, we’ve ‘gamified’ our workdays. Employees can earn WeCoins by completing quests, staying active in internal and external channels, participating in training, and more. WeCoins can then be redeemed for various rewards — from company merchandise to masterclasses, training or mentor sessions, and even an iPhone! We wanted to keep the rewards as varied as possible, offering encouragement to everyone in our team..

In addition to Game On, Growe offers quarterly bonuses tied to predefined quarterly goals. These targets give employees a clear focus for each quarter and are designed specifically to motivate sustained effort.

Practical advice for managers

Intrinsic and extrinsic rewards both have their benefits. However, as mentioned earlier, managers must consider a few key factors to ensure these strategies are implemented in a way that benefits everyone.

• The first step is to build an autonomy-supportive environment by encouraging employees to take initiative, share ideas, and explore solutions without micromanagement. This approach promotes intrinsic motivation and ensures long-term engagement.
• Next, praise should be combined with financial incentives by balancing both recognition and tangible rewards as they complement each other. You shouldn’t have one without the other. For example, public recognition during team meetings can increase motivation and provide reassurance without diminishing intrinsic enthusiasm.
• Finally, use extrinsic rewards as feedback: Bonuses and raises are powerful signals of appreciation and effectiveness, but they should convey value rather than acting as the only driver of performance. While everyone appreciates feeling valued by their team, this shouldn’t be the only motivating factor.

Striking the right balance

As you can imagine, striking the balance between extrinsic and intrinsic motivators is much easier to be said than done. However, when done correctly, the benefits can be limitless.

Relying solely on extrinsic motivation can be risky, as intrinsic motivation generally has a more long-lasting impact on team dynamics. Companies in iGaming and IT must assess how to balance these motivators effectively to match their employees’ needs.

At Growe, we have been working hard to maintain this balance — we are very proud of it and are always looking for new and exciting ways to keep our team engaged.