Motivation and emotion/Book/2025/Incentive theory of motivation

Incentive theory of motivation:
How do external incentives influence approach and avoidance behaviour?

Overview

Figure 1. Student working towards deadline Scenario Maddy is a university student who has an essay due on the weekend. She knows she should start working on it early so that she has time to do her best work, but instead, she puts it off. Throughout the week, she spends her free time binging shows and scrolling through Instagram reels. Finally, the day before her essay is due, she realises that if she doesn’t start now, she is going to fail her course. Fuelled by the fear of failing, she spends her weekend frantically writing. Jamie, Maddy’s classmate, is a high achiever and hopes to get a dean’s excellence award for her marks this semester. Jamie started researching and planning her essay weeks before the deadline. She set aside time each day to work on her essay, meaning she finished a draft early in the week and was able to get feedback. She handed in her final, polished essay before the weekend, feeling confident in her work and excited for her result.

In this scenario, two students are working towards the same deadline (see Figure 1); however, each one is fuelled by a different type of motivation. Maddy is driven by a desire to avoid a negative outcome (e.g., failing her course); this is an example of avoidance behaviour (Elliot, 2013). Meanwhile, Jamie is acting to gain a positive outcome (e.g., achieving a high mark), an example of approach behaviour (Elliot, 2013). Both Maddy's and Jamie’s behaviours are driven by external incentives.

Incentive theory suggests that human behaviour is driven by external factors, made up of both positive incentives (rewards) and negative incentives (punishments). These incentives can be tangible (like money or food) or intangible (like praise or recognition) (Silverman et al., 2016). The strength of an incentive impacts the likelihood of an individual acting in response. However, the same incentive can have varying power depending on the person or situation (Hagger et al., 2015). Other factors, including the delivery time of rewards, reward salience, and choice, can also impact how effective an incentive is (Lehtivuori, 2023).

Some studies have suggested that external incentives can undermine intrinsic motivation (motivation driven by personal values and enjoyment) (Deci & Ryan, 2000). This is particularly significant as intrinsic motivation is linked to better outcomes in the performance and well-being of individuals, compared with externally controlled behaviour (Deci & Ryan, 2000). However, different theorists hold contentious views on the issue, and it remains the topic of debate (Lehtivuori, 2023).

Understanding motivation has major real-world significance in that motivation is essential for producing behaviour. Knowing how external factors influence behaviour enables environments to be manipulated to promote desirable behaviours (Hagger et al., 2020). Managers, teachers, coaches, health care providers, parents, and anyone else needing to mobilise others to action, benefit from a knowledge of motivation and how to harness it (Deci & Ryan, 2000).

Focus questions What are approach and avoidance behaviours? What impacts the strength of an incentive? How do external incentives impact intrinsic motivation? What are the practical applications of incentive theory?

Approach and avoidance behaviour

The incentive theory of motivation is underpinned by the concepts of approach and avoidance behaviour. The approach-avoidance distinction has appeared in scholarly writing for thousands of years, with the earliest reference being from the Greek philosopher Democritus (460–370 B.C.E.), who first described the human tendency to pursue immediate pleasure and avoid pain (Elliot, 2006). This concept continued to hold significance in the work of early psychologist William James in the late nineteenth century and later in Freud’s psychodynamic theory (Elliot, 2006). In the 1960s and 1970s, cognitive and social-cognitive theorists moved away from affective explanations of motivation; however, in the 1990s, approach-avoidance theories returned to prominence as theorists acknowledged the interconnected nature of cognition and motivation. In the last several decades, the approach-avoidance distinction has been used and applied in many ways (Elliot, 2006).

Appetitive vs aversive stimuli

Approach motivation is generally associated with appetitive stimuli, rewards, and incentives, while avoidance is connected with aversive stimuli, punishments, and threats (Elliot et al., 2013). It is expected that individuals with normal adaptive functioning will orient themselves towards rewards and incentives, and away from punishments and threats (Elliot et al., 2013). Approach and avoidance can be literal or figurative, for example, stepping back from a painting to view it better is an approach behaviour, despite involving physically moving away from it (Elliot, 2006). Additionally, approach and avoidance behaviour do not just include new movement toward or away from stimuli, but also maintaining current orientation toward or away from a stimulus (Elliot et al., 2013).

Emotional valence

Approach and avoidance behaviours have traditionally been linked to specific emotions (Elliot, 2013). Particularly, they are connected to emotional valence, that is, positive or negative feelings (Elliot, 2013). Approach behaviour is linked with positive valence, and avoidance behaviour is linked with negative valence (Elliot, 2013). However, this concept does not apply to all emotions; anger, for example, has a negative valence but is often linked to approach motivation (Elliot, 2013).

Stimulus evaluation

Figure 2. Dessert can have positive or negative motivational valence

When presented with a stimulus, people engage in cognitive appraisals to determine if the stimulus is beneficial or detrimental (Elliot, 2013). These stimuli can vary from concrete (e.g., physical objects) to abstract (e.g., memories) (Elliot, 2013). Stimulus evaluation occurs at multiple levels across the neuroaxis, including rudimentary exteroceptive reflexes, subcortical computations, and higher-order cortical processing (Elliot, 2013). These evaluations involve a contextual lens, meaning an individual's current needs are considered when appraising a stimulus. For example, a dessert (see Figure 2) that usually holds positive valence may have negative motivational valence when an individual is full or is on a diet (Elliot, 2013). Understanding that the same incentive may hold different value depending on the context is crucial in applying incentive motivation effectively to real-world scenarios.

Strength of incentives

Not all incentives are created equal. Some incentives have the power to motivate significant behaviour change, while others lead to no change at all. Further, one incentive could motivate one person while the same incentive could have no influence on another person. So what are the factors that impact the strength and effectiveness of an incentive?

Delivery time

In studies looking at the impact of external rewards on intrinsic motivation, the delivery time of the rewards is significant. Immediate, as opposed to delayed delivery of rewards has a strong positive impact on intrinsic motivation (Woolley & Fishbach, 2018). This may be due to temporal discounting, meaning we value immediate rewards more highly than later ones (Liu et al., 2022). Liu et al. (2022) specifically improved upon prior research by removing a possible misattribution effect of extrinsic motivation. This is important because, unlike extrinsic motivation, which is often short in duration and linked to more passive behaviours, intrinsic motivation is connected to higher performance and longer-lasting behaviour change (Liu et al., 2022).

Reward salience and choice

Hendijani & Steel (2020) studied the interaction between reward salience and choice on motivation and performance and noted interesting connections. In many contexts, the provision of choice has been seen to improve motivation and performance. Similarly, external rewards have been utilised across a range of domains to enhance performance. In the study, Hendijani & Steel examined the interaction between these two variables. It was found that salient rewards in a no-choice condition had a positive effect on motivation, as did non-salient rewards in a choice condition. Meanwhile, salient rewards in a choice condition reduced motivation and performance. It is theorised these results are due to personal loci of control. In the salient reward and no-choice condition, a consistent external locus of control is established, promoting extrinsic motivation. In the non-salient, choice condition, an internal locus of control emerges. However, the salient reward, choice condition generates a confused locus of control, diminishing motivation and performance.

Fostering competence and autonomy

Rewards that foster a sense of competence and autonomy in an individual are likely to result in stronger incentives. This is based on meeting two of the basic psychological needs outlined in self-determination theory. For example, a teacher providing meaningful feedback outlining what was done well and what could be improved on an assignment could be viewed as informative and thus foster a sense of competence (Hagger et al., 2015). However, external contingencies that are perceived as controlling will diminish feelings of autonomy and decrease motivation (Hagger et al., 2015).

Incentive theory and intrinsic motivation

Motivation can broadly be divided into two distinct types: intrinsic and extrinsic motivation. Intrinsic motivation is characterised by behaviour born out of personal interest and values (e.g., a personal commitment to excel)(Deci & Ryan, 2000). While extrinsic motivation relates to behaviours driven by reasons external to one’s self (e.g., external pressure to participate) (Deci & Ryan, 2000).

Incentive theory primarily focuses on extrinsic motivation, considering how external incentives influence behaviour. However, intrinsic motivation is linked to better outcomes in the performance and well-being of individuals, compared with externally controlled behaviour (Deci & Ryan, 1991; Deci & Ryan, 1997; Deci & Ryan, 1995). Therefore, understanding ways in which external incentives can promote intrinsic motivation rather than undermine it is crucial. The following sections will unpack intrinsic and extrinsic motivation interactions through the lens of self-determination theory (SDT).

Self-determination theory

Self-determination theory (SDT) centres around the objective of achieving self-motivation and personality integration. SDT identifies three primary needs that facilitate optimal functioning, these needs are: competence, relatedness, and autonomy (Deci & Ryan, 2000). Meeting these needs is considered essential for constructive social development and personal well-being. Understanding SDT is relevant in many domains, including: for parents and educators concerned with the cognitive and personality development of children, for promoting learning and positive behaviour, for managers wanting to promote motivation and commitment in the workplace, and for psychotherapists and health professionals wanting to support maintained change in patients (Deci & Ryan, 2000).

Intrinsic motivation

SDT suggests that conditions which support autonomy and competence promote intrinsic motivation, while conditions that control behaviour and reduce perceived effectance undermine intrinsic motivation (Deci & Ryan, 2000).

External social-contextual events, such as feedback, communication, or rewards, that lead to feelings of competence enhance intrinsic motivation. For example, intrinsic motivation was found to increase as a result of positive performance feedback and decrease as a result of negative feedback (Deci, 1975). This was due to its impact on perceived competence (Vallerand and Reid, 1984). However, feelings of competence only lead to enhanced intrinsic motivation when they are accompanied by a sense of autonomy, that is, when behaviour is perceived as being self-determined (Deci & Ryan, 2000).

Autonomy supportive environments lead to increased intrinsic motivation, creativity, curiosity, desire to learn, and a desire to be challenged (Deci & Ryan, 2000). Understanding this is crucial in motivating others to commitment, effort, and high-quality performance (Deci & Ryan, 2000). In contrast, methods that employ excessive control, nonoptimal challenges, and lack connectedness result in diminished intrinsic motivation and can lead to negative impacts, including a lack of intuitive taking and responsibility as well as distress and psychopathology (Deci & Ryan, 2000).

Despite the power of intrinsic motivation, people will only be intrinsically motivated in tasks that hold intrinsic interest for them (e.g., novelty, challenge, aesthetic value); extrinsic motivation is essential for tasks that hold no intrinsic interest (Deci & Ryan, 2000).

Cognitive evaluation theory

Cognitive Evaluation Theory (CET) is a subtheory within SDT that studies the factors that undermine or promote intrinsic motivation (Deci & Ryan, 2000).

Research looking at the impact of extrinsic rewards on intrinsic motivation has resulted in much debate. Deci, Koestner & Ryan's 1999 meta-analysis found that tangible rewards contingent on task performance undermined intrinsic motivation, which was interpreted as resulting from a diminished sense of autonomy. Tang & Hall (1996) also suggest that task-contingent rewards lead to reduced intrinsic motivation through the overjustification effect. However, other meta-analyses, particularly from Cameron and colleagues, dispute the idea that there is a negative impact of extrinsic rewards on intrinsic motivation (Cameron & Pierce, 1994). A recent meta-analysis suggests extrinsic rewards can negatively impact intrinsic motivation, particularly when motivation is measured behaviourally after contingent rewards are no longer given (Lehtivuori, 2023).

While different viewpoints on the issue remain, research suggests the relationship between extrinsic rewards and motivation is complex and that the type of reward, how the reward is earned, and under what conditions and context motivation is examined, impacts results (Lehtivuori, 2023).

Incentive interventions

A practical application of the incentive theory of motivation for addressing social issues is incentive interventions. Incentive interventions are an effective way of promoting socially valuable behaviours and leading to positive behaviour change in a range of settings (Silverman et al., 2016). They can be used both to create desirable/adaptive habits and to break undesirable/maladaptive habits (Gneezy et al., 2020). Incentives can reduce barriers involved in behaviour change, including counteracting present bias (Gneezy et al., 2020). Within incentive interventions, tangible and desirable consequences (e.g., monetary rewards) are given to individuals upon performing an observable and verifiable behaviour (Silverman et al., 2016).

Incentive interventions are built around the operant principle of reinforcement, that is, that consequences that affect behaviour are reinforcers. Reinforcers are used to increase the behaviours they are contingent on (reinforcement) (Silverman et al., 2016). The following table outlines some of the many applications of incentive interventions.

Increasing physical activity in sedentary adults	A study using a deposit contract design found monetary incentive interventions successfully increased physical activity in sedentary and underactive adults (Washington et al., 2016).
Smoking cessation in smokers with ADHD	Individuals with attention-deficit/hyperactivity disorder (ADHD) are twice as likely to be smokers as the general population. As such, an incentive intervention study was designed to reduce smoking with monetary vouchers. This intervention, facilitated via an app, was found to be effective (Dan et al., 2016).
Promoting health behaviour change	A meta-analysis where participant-level data from seven studies were pooled, found financial incentives effective in promoting health behaviour change (Haff, 2015).
Remotely implemented interventions	A systematic review of financial incentive interventions targeting health behaviors found remote implementation of interventions using technology to be effective. In these studies, monitoring of behavior and/or delivery of incentives was done remotely (Kurti, 2016).
Work productivity	Incentive interventions have been found effective in studies looking at monetary incentives for work performance. Ratio schedules for reward delivery were found to be the most significant determinant of performance (Bucklin, 2001).

Conclusion

Incentive theory of motivation is the concept that behaviours are driven by external factors or incentives. Generally, positive incentives drive approach behaviour, while negative incentives lead to avoidance behaviour. Incentives can vary from tangible to intangible and can vary in strength due to many factors related to the specific context and individual. Delivery time, reward salience, choice, and feelings of autonomy and competence are particularly significant in determining the strength of incentives.

The exact manner in which extrinsic rewards interact with intrinsic motivation remains a matter of debate, with some theorists arguing for an undermining effect while others argue that no negative effect exists.

Incentive theory has many practical applications, particularly in the fields of health, education, and management. Understanding how motivation is impacted by external incentives enables the promotion of desirable behaviours. A key application of this theory is incentive interventions for behaviour change, which can be utilised across health, workplace, and educational settings.

See also

• Approach motivation (Book chapter, 2022)
• Avoidance motivation (Book chapter, 2013)
• Extrinsic motivation (Book chapter, 2013)
• Hidden costs of reward (Book chapter, 2022)
• Incentives (Wikipedia)
• Rewards, punishments, and social cooperation (Book chapter, 2019)

References

Bucklin, B. R., & Dickinson, A. M. (2001). Individual monetary incentives: A review of different types of arrangements between performance and pay. Journal of Organizational Behavior Management, 21(3), 45–137. https://doi.org/10.1300/J075v21n03_03

Cameron, J., & Pierce, W. D. (1994). Reinforcement, Reward, and Intrinsic Motivation: A Meta-Analysis. Review of Educational Research, 64(3), 363–423. https://doi.org/10.3102/00346543064003363

Dan, M., Grabinski, M. J., & Raiff, B. R. (2016). Smartphone-based contingency management for smoking cessation with smokers diagnosed with attention-deficit/hyperactivity disorder. Translational Issues in Psychological Science, 2(2), 116–127. https://doi.org/10.1037/tps0000062

Deci, E. L. (1975). Intrinsic motivation. Plenum Press. https://doi.org/10.1007/978-1-4613-4446-9

Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A Meta-Analytic Review of Experiments Examining the Effects of Extrinsic Rewards on Intrinsic Motivation. Psychological Bulletin, 125(6), 627–668. https://doi.org/10.1037/0033-2909.125.6.627

Elliot, A. J. (2006). The Hierarchical Model of Approach-Avoidance Motivation. Motivation and Emotion, 30(2), 111–116. https://doi.org/10.1007/s11031-006-9028-7

Elliot, A. J., Eder, A. B., & Harmon-Jones, E. (2013). Approach–Avoidance Motivation and Emotion: Convergence and Divergence. Emotion Review, 5(3), 308–311. https://doi.org/10.1177/1754073913477517

Gneezy, U., Kajackaite, A., Meier, S., & Hagger, M. S. (2020). Incentive-based interventions. In The Handbook of Behavior Change (pp. 523–536). Cambridge University Press. https://doi.org/10.1017/9781108677318.036

Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (don’t) work to modify behavior. The Journal of Economic Perspectives, 25(4), 191–210. https://doi.org/10.1257/jep.25.4.191

Haff, N., Patel, M. S., Lim, R., Zhu, J., Troxel, A. B., Asch, D. A., & Volpp, K. G. (2015). The role of behavioral economic incentive design and demographic characteristics in financial incentive-based approaches to changing health behaviors: A meta-analysis. American Journal of Health Promotion, 29(5), 314–323. https://doi.org/10.4278/ajhp.140714-LIT-333

Hagger, M., Cameron, L. D., Hamilton, K., Hankonen, N., & Lintunen, T. (Eds.). (2020). The handbook of behavior change. Cambridge University Press. https://doi.org/10.1017/9781108677318

Hagger, M. S., Koch, S., & Chatzisarantis, N. L. D. (2015). The effect of causality orientations and positive competence-enhancing feedback on intrinsic motivation: A test of additive and interactive effects. Personality and Individual Differences, 72, 107–111. https://doi.org/10.1016/j.paid.2014.08.012

Hendijani, R., & Steel, P. (2020). Motivational congruence effect: How reward salience and choice influence motivation and performance. Cogent Business & Management, 7(1). https://doi.org/10.1080/23311975.2020.1791444

Kurti, A. N., Davis, D., Redner, R., Jarvis, B., Zvorsky, I., Keith, D. R., Bolivar, H., White, T. J., Rippberger, P., Markeish, C., Atwood, G., & Higgins, S. T. (2016). A review of the literature on remote monitoring technology in incentive-based interventions for health-related behavior change. Translational Issues in Psychological Science, 2(2), 128–152. https://doi.org/10.1037/tps0000067

Liu, Y., Yang, Y., Bai, X., Chen, Y., & Mo, L. (2022). Do immediate external rewards really enhance intrinsic motivation? Frontiers in Psychology, 13, 853879. https://doi.org/10.3389/fpsyg.2022.853879

Ryan, R. M., & Deci, E. L. (2000). Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being. The American Psychologist, 55(1), 68–78. https://doi.org/10.1037/0003-066X.55.1.68

Silverman, K., Jarvis, B. P., Jessel, J., & Lopez, A. A. (2016). Incentives and motivation.Translational Issues in Psychological Science, 2(2), 97–100. https://doi.org/10.1037/tps0000073

Tang, S.-H., & Hall, V. C. (1995). The overjustification effect: A meta-analysis. Applied Cognitive Psychology, 9(5), 365–404. https://doi.org/10.1002/acp.2350090502

Vallerand, R. J., & Reid, G. (1984). On the Causal Effects of Perceived Competence on Intrinsic Motivation: A Test of Cognitive Evaluation Theory. Journal of Sport Psychology, 6(1), 94–102. https://doi.org/10.1123/jsp.6.1.94

Washington, D. W., McMullen, D., & Devoto, A. (2016). A matched deposit contract intervention to increase physical activity in underactive and sedentary adults. Translational Issues in Psychological Science, 2(2), 101–115. https://doi.org/10.1037/tps0000069

Woolley, K., & Fishbach, A. (2018). It’s About Time: Earlier Rewards Increase Intrinsic Motivation. Journal of Personality and Social Psychology, 114(6), 877–890. https://doi.org/10.1037/pspa0000116

External links

• The impact of external rewards on motivation (The Self Determined Life)
• What is incentive theory in behavioral economics? (The Behavioral Scientist)
• What is the incentive theory of motivation? (workhuman.com)