Extrinsic reward
An extrinsic reward is an outcome provided externally in connection with work or performance. Examples include salary, bonuses, benefits, promotion or formal recognition. Its motivational effect depends on whether the person values it, believes it is attainable and trusts the link between performance and reward. Reward design should consider fairness and avoid encouraging behaviour that damages wider objectives.
Worked example
A team receives an additional paid day off for meeting agreed service and quality targets. The time off is an externally provided reward, whose value may vary between employees.
Common mistake
Do not equate extrinsic with financial. A non-cash award is external too, and offering an attractive reward does not guarantee that staff believe their effort can achieve it.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |