Incentive Theory of Motivation: Definition and How to Use It in the Workplace

Rather than focusing on more intrinsic forces behind motivation, the incentive theory proposes that people are pulled toward behaviors that lead to rewards and pushed away from actions that might lead to negative consequences.

Incentive theory | Behavior | MCAT | Khan Academy

Different workplace incentives

Workplace incentives fall into two main categories: monetary and non-monetary. Financial incentives are simple: Many workers will put in more effort if they have the chance to get a raise or receive a higher salary. Financial reward has psychological benefits, but it also encourages employees to feel secure in their positions and with the company.

Non-monetary incentives include a range of types:

Job security

One non-monetary incentive that encourages people at work is job security. For instance, gaining tenure or finishing a trial period can increase someone’s sense of security and drive to contribute to the business or organization. They may exert more effort to support the success of the company once they feel their contributions matter. By providing yearly performance reviews that include constructive criticism and positive reinforcement, you can increase job security.


Recognition is also an important form of non-monetary workplace incentives. Employers may give incentives for putting in a lot of effort, achieving a goal, or sticking with the business for a long time. Many times, businesses combine recognition with a financial incentive. An award for employee of the month is a popular one that many businesses give out. Praise of a worker during a team meeting is another instance of small recognition. Publicly praising a worker for their diligence can also inspire other team members to have the same work ethic.

Professional development

Professional development opportunities can also provide incentives to employees. Developing their skills can be an important motivator. Employers may provide tuition reimbursement, send staff members to seminars or conferences, or create an internal training program for skill development. You could also start a program where staff from one department shadows others from another to gain a better understanding of how the business is run.


The opportunity for promotion is an important workplace motivator. Promotions present a chance for development and advancement and can be very gratifying and inspiring. They also help employees excel in their professional development. When an employee is promoted, they typically feel more secure in their position. Promotions and raises are typically given to employees at the same time.

What is the incentive theory of motivation?

According to the behavioral theory known as the incentive theory of motivation, people are driven by a desire for rewards and reinforcement. The incentive theory also suggests that people behave in ways they think will lead to rewards and refrain from doing things that could result in punishment.

Depending on the incentives offered, employees may act differently in similar circumstances. An employee might, for instance, put more effort into a project if they want to get a good review or avoid getting one than if they don’t get one at all. Their drive stems from a desire to be rewarded or spared punishment during a performance review at the conclusion of the project.

Depending on the situation and time, the value of the same incentive may change. People may value similar incentives differently. Which individuals are motivated by various incentives can be determined in part by psychological and social factors. Only when people place value on the reward they will receive for their actions do incentives serve as effective motivational tools.

Like other areas of life, the workplace has both positive and negative incentives:

Applying the incentive theory of motivation in your career

You can succeed in your career by being aware of how your core values influence your motivations. The ideals, convictions, and personal ethics that direct your decision-making are known as core values. Knowing your core values can help you better understand the types of incentives to which you respond. Then, you can use those inducements to spur yourself on to accomplish your professional objectives. Finding jobs and businesses that share your values will make you happier and more productive at work. Understanding your core values can also help you do that.

To identify your core values, consider the following:

You can change how you live your work life by identifying your core values. For instance, if you discover that non-cash rewards motivate you, ask your manager about opportunities for advancement or for professional development offered by the business.


Who created the incentive theory of motivation?

Many behavioral psychologists support the Incentive Theory of Motivation; B. D. Spence is the most eminent supporter. F. Skinner.

What is incentive and its examples?

Definition of an incentive An incentive is something that motivates someone to act or put in more effort. Offering extra money to employees who put in more hours on a project is one type of incentive.

What is the difference between drive theory and incentive theory?

According to the drive-reduction theory of motivation, we are driven to maintain the balance of our bodies’ homeostasis. Jack, for instance, feels hot, so he turns on the air conditioner. The incentive theory, on the other hand, contends that we are motivated by external factors through favorable association.

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