In the dynamic landscape of today’s workplaces, understanding the intricacies of employee motivation is critical for Managers.

A concept gaining traction in organisational psychology is ‘motivational crowding‘. This phenomenon occurs when external incentives, like bonuses or penalties, undermine intrinsic motivation, leading to decreased employee performance.

Understanding Motivational Crowding:

Motivational crowding takes root when employees feel that their autonomy or sense of purpose is overshadowed by external rewards or pressures. This can lead to a reduction in their inherent interest in the task at hand. For example, if an employee who loves problem-solving is given a financial incentive to solve problems faster, they might focus more on speed than on enjoying the problem-solving process, leading to reduced job satisfaction and potentially lower-quality work.

The Impact on Employee Performance:

When intrinsic motivation wanes due to motivational crowding, several areas of employee performance can be affected. Creativity, engagement, and even teamwork can suffer. Employees may become more task-focused and less willing to go the extra mile, which can hinder innovation and collaborative efforts within the organisation.

Strategies for Managers:

Balance Intrinsic and Extrinsic Motivation: managers should strive to find a balance between external rewards and supporting employees’ intrinsic motivations. This might mean offering recognition in ways that align with individual employees’ values and interests.

Foster Autonomy and Mastery: Encourage a culture where employees have the autonomy to approach tasks in their own way and provide opportunities for them to master new skills. This approach can rekindle intrinsic motivation and offset the negative aspects of motivational crowding.

Tailor Incentives: Understand that different employees are motivated by different factors. Tailoring incentives and recognitions to individual preferences can help mitigate the effects of motivational crowding.

Transparent Communication: Keeping employees in the loop about why certain incentives are being offered and how they align with broader company goals can help them see these incentives as part of a larger purpose, rather than as undermining their intrinsic motivations.

Feedback and Support: Regular, constructive feedback and a supportive environment can help maintain intrinsic motivation, even in the presence of external incentives.


For managers, understanding and managing motivational crowding is vital in maintaining a highly motivated and high-performing workforce. By balancing extrinsic and intrinsic motivators and fostering a supportive work environment, HR professionals can ensure that their employees remain engaged, motivated, and productive.

Article by: Rob Gallacher