In 1970 British social scientist R.M.Titmuss in his research, which he published in his book entitled The Gift Relationship, demonstrated that financial compensation for donating blood might lower the willingness to give blood among blood donors. Moreover, some psychologists also identified the phenomenon of lowering one’s internal motivation level among people tested on their reactions to the rewards received. The Swiss economist B.S.Frey gathered all the published research conclusions in this field together and introduced a motivation crowding theory, which assumes that both awards and sanctions have a hidden cost.

Motivation crowding theory assumes that people follow not only external motivation (obtaining rewards, avoiding sanctions) but also internal motivation (curiosity, need for self development, job satisfaction). Therefore, external actions may cause an increase (crowding-in effect) or a decrease (crowding-out effect) in motivation. The crowding-in effect takes place if the external action (e.g. an reward or a sanction) is perceived by the employee as supportive. The crowding-out effect takes place if the external action is perceived by the employee as limiting their autonomy or if the external action indicates that the superior does not value the motivation or competence of the employee.

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Glossary:

  • compensation – wynagrodzenie, zadośćuczynienie
  • willingness – chęć
  • conclusion – wniosek
  • motivation crowding theory – teoria wypierania motywacji
  • crowding-in effect – efekt pobudzania
  • crowding-out effect – efekt wypierania
  • indicate – wskazywać

Exercise:

Decide which of the sentences are true, false or not mentioned in the article:

Job satisfaction is part of internal motivation.
Rewards always have a positive influence on an employee.
Motivation is important part of manager’s work according to both economists and sociologists.
Donating blood may have a good social impact on one’s motivation.
Crowding-out effect is an increase in motivation.
The main profession of R. M.Timuss was researching in economics.
Both, internal and external motivation are important to successfully motivate an employee.