Understanding The Incentive Theory Of Motivation

Employees have different motivations for working hard and remaining dedicated to a company. One motivation for many employees is receiving incentives for practicing a good work ethic. Mastering the incentive theory of motivation can help improve your management style, help your team members feel more valued and help focus your own professional development goals. In this article, we shall discuss understanding the theory of motivation.

Incentive theory is one of the psychological theories of motivation that suggests that behavior is motivated by outside reinforcement or incentives versus internal forces. Understanding how incentive theory works can help you better recognize what might be motivating you to act a certain way or engage in specific behaviors. It also enables you to put your own incentives in place, potentially making it easier to reach your desired goals.

History of Incentive Theory

The idea that our behaviors are influenced or reinforced by external factors is credited largely to psychologist B. F. Skinner. In Skinner’s 1938 book Behavior of Organisms, he argued that people are not driven to act by internal states, such as acting aggressively due to feeling angry. Instead, we are driven or incentivized to act based primarily on three environmental events: deprivation, satiation, and aversive stimulation.

Incentive theory continued to be revised in the 1940s and 1950s. During this time, its development was influenced by several drive theories, such as those established by psychologist Clark Hull.

Hull contended that behavior is driven by biological deprivation, which thereby creates motivation to act.

In the late 1950s, Frederick Herzberg expanded this ideology even more, creating what is known as the two-factor incentive theory. This theory is based on a study that Herzberg conducted on employees to learn what contributed to or took away from their feelings of job satisfaction.

This study involved asking employees what made them feel good about their job and what made them feel bad. Based on their answers, Herzberg proposed that job satisfaction was based on two factors:

  • Motivators, such as the desire for recognition, achievement, or advancement
  • Hygiene, which includes company policies, salary, working conditions, etc.

How Incentive Theory Works

In contrast with other theories that suggest we are pushed into action by internal or intrinsic forces of motivation, incentive theory proposes that we are pulled into action by outside incentives. More specifically, people are pulled toward behaviors that lead to outside rewards and pushed away from actions that lead to negative consequences.

Incentive theory can be likened to operant conditioning, where behaviors are performed to either gain reinforcement or avoid punishment.

What type of rewards might we want to gain? Good grades are an incentive that can motivate students to study hard and do well in school. Gaining esteem and accolades from teachers and parents might be another. Money is also an excellent example of an external reward that motivates behavior.

Rewards must be obtainable in order to be motivating. For example, a student will not be motivated to earn a top grade on an exam if the assignment is so difficult that it is not realistically achievable. Rewards must also be important or they won’t be powerful enough to spur a person into action.

In many cases, external rewards can motivate you to do things that you might otherwise avoid, such as chores, work, and other tasks you find unpleasant. They can also be used to get you to stop performing certain actions, such as quitting smoking to prevent the negative consequence of developing lung cancer.

Types of Incentives

In psychology, an incentive is defined as “an external stimulus, such as a condition or an object, that enhances or serves as a motive for behavior.”4 Incentive theory includes two different types of incentives:

  • Positive incentives. These are the rewards received from taking certain actions, such as receiving a commission if you make a specific number of sales.
  • Negative incentives. These are punishments received from taking certain actions, such as getting a speeding ticket if you drive faster than the law allows.

Examples of Incentive Theory

You can probably think of many different situations where your behavior was directly influenced by the promise of a reward. Perhaps you studied for an exam in order to get a good grade, ran a marathon to receive a ribbon, or took a new position at work to get a raise. All of these actions involve being influenced by an incentive to gain something in return for your efforts.

Or maybe your behavior was more incentivized by avoiding punishment. Examples of incentive theory in this context include turning in a big assignment to avoid failing the class, eating a salad instead of a burger to not gain more weight, or biting your tongue in an argument to keep from getting into a fight.

Challenges of Incentive Theory

Not all incentives are created equal, and the rewards that you find motivating might not be enough to inspire another person to take action. Physiological, social, and cognitive factors can all play a role in what incentives you find motivating.

For example, you are more likely to be motivated by food when you are actually hungry versus when you are full. Additionally, while one teenager might be motivated to clean their room by the promise of a coveted video game, another teen could find such a game completely unappealing, thereby not motivating them into action.

Incentives can also change depending on the situation. In Psychology: A Discovery Experience, author Stephen L. Franzoi gives an example: “When you are home, your parents’ praise may be a positive incentive. However, when your friends visit, you may go out of your way to avoid receiving parental praise, because your friends may tease you.”

Two people may act differently in the same situation based on the type of incentives that are appealing to them at that time.

Incentive Theory vs. Other Motivational Theories

Incentive theory is just one of several theories of motivation. Other motivational theories include:

  • Arousal theory: our motivation to act is based on trying to achieve our desired level of physiological arousal, such as jumping out of a plane to feel more alive or listening to soothing music to relax
  • Drive-reduction theory of motivation: our behaviors are a result of our desire to reduce certain biological drives, such as putting on a coat if we feel cold
  • Instinct theory: our actions are a result of our inborn need to engage in certain actions for survival, such as getting something to eat when you are hungry to avoid starvation

How to Use Incentive Theory to Improve Motivation

Setting up your own incentives can increase your motivation to reach your desired goals. Here are a few tips to do this effectively:

  • Create a reward that is important to you. If your reward isn’t strong enough, it likely won’t compel you to take action consistently over time. If you have a favorite show, for example, only let yourself watch it after you’ve done your daily workout.
  • Develop a list of reward options. Since incentives can change based on situation or time, it can help to have a list of rewards from which to choose. This helps motivate you to take your desired action based on what is important to you at the time.
  • Engage in visualization. Take a few moments and sit with your eyes closed while visualizing how good the reward feels once it is received. Use all your senses. The more you can “feel” what it would mean to have the reward, the more this motivates you into action.
  • Set realistic guidelines for receiving the reward. If you have to have to run 20 miles to earn a reward and you can’t even run one, your feelings of overwhelm are likely to be strong enough to reduce your motivation to lace up your shoes. Keep your guidelines realistic so they don’t stop you from even getting started.



In summary, consider what motivates you as you work on your goals. Are you trying to gain an incentive or do you want to avoid a negative consequence? Understanding the forces behind your actions can help you determine how to best motivate yourself to reach your specific goals.

I hope you find this article helpful as well as interesting.

About the Author

A Public Speaker and Freelancer who is Interested in Writing articles relating to Personal Development, Love and Marriage.

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