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Intrinsic and Extrinsic Motivations

What makes health workers get up in the morning? Paying-for-performance and worker motivation

Jed Friedman's picture

Economists have long noted that the price mechanism can be effective at modifying human behavior. Psychologists classify this aspect of behavior motivation as extrinsic motivation, meaning that the behavior is induced by external pressure. If I increase my hours worked due to an overtime premium then I can be said to exhibit extrinsic motivation - I am responding to the price schedule offered me. In contrast to extrinsic motivation, psychologists posit intrinsic motivation as arising from within the individual.