In our uncertain economy, companies have to get by with less. At the same time, it’s still a hot labor market and pay expectations are often higher than companies can afford. How do you enable your team to meet KPIs when budgets are tight and staffing is short? Use intrinsic motivation.

What is Intrinsic Motivation?

In the second episode of Let’s Talk Talent, two members of Talent Plus’ research team discuss intrinsic and extrinsic motivation at work. Intrinsic motivation means doing something because the action itself is fulfilling. Intrinsically motivated employees work hard because they’re doing what they’re good at and enjoy. Naturally, strong performance and loyalty follow: Research demonstrates a positive correlation between intrinsic motivation and intent to stay.

On the other hand, extrinsic motivation means doing something only because it produces an outside reward. Extrinsically motivated employees work hard to earn a raise, bonus or promotion. That approach could work in a pinch if you have the funds for bonuses and a strong business case for promotions. But what happens when you don’t? Unless you find a way to motivate intrinsically, employees will see no reason to continue working beyond the bare minimum.

How Leaders Can Intrinsically Motivate Their Employees

First, go back to the definition: working because the work itself is fulfilling. Have you checked in with your team members recently to learn what they enjoy about their work, what they don’t like as much, and how they’d like to grow? Those conversations can help you understand which tasks are best suited for each team member. By increasing the amount of time employees spend on work they’re good at and enjoy, you’re likely to increase their intrinsic motivation, too.

Of course, nobody gets to spend 100% of their time on tasks they enjoy. That’s when rewards come back into the picture, but only if they’re timely, consistent, and reserved for top performance.

When structured that way, rewards are more likely to increase intrinsic motivation than they are to decrease it. The timing of rewards could be more important than their size, so when an employee’s performance merits a reward, deliver it as soon as feasible. And rewards should only, and always, follow top performance. Recognizing employees just for showing up might sound morale-boosting, but at best, you’ll only increase extrinsic motivation, and at worst, your words will ring hollow.

Rewards don’t need to be expensive to be motivating. In your conversations with your team members, you learned which tasks are the most intrinsically motivating for them. That should tell you about what rewards might motivate them, too. A leaderboard could be a great option for employees who love competing with others. A no-meeting day could motivate employees who enjoy focused, heads-down work.

When you take the time to understand your team members, you’ll learn what they’re good at, what they enjoy, and what’s important to them. Not only is that great for relationship-building, it’s immensely valuable for assigning work and structuring rewards. And by improving intrinsic motivation, you’re more likely to improve productivity and retention, too.