Intrinsic motivation and extrinsic motivation are both forms of motivation in business and in the world around us. However, they differ in where they originate and how they motivate others. Intrinsic motivation comes from within the person, and is often the motivator of passion. For example, many people develop hobbies due to intrinsic motivation, or use it to motivate themselves to accomplish something, such as lose weight. On the other hand, extrinsic motivation comes from external forces, and people motivated by outside forces make changes due to outside rewards, pressures, or other factors. In the workplace, extrinsic forces motivate most people, while intrinsic forces motivate far fewer. Because of this, it is wise for managers to understand the difference between the two, and what best motivates their own staff to accomplish their goals and objectives. Extrinsic motivation can also be negative, such as fear of punishment or reprisals if goals are not met. However, using intrinsic motivation to make staff feel good about what they do and why they do it is a much more effective and long lasting type of motivation in the workplace.

             Everyday examples of intrinsic motivation include engaging in hobbies for pleasure, such as knitting, quilting, woodworking, or creating artwork. These are detailed activities that require much concentration and thought, yet people engage in them because they want to, not because they are required to. Intrinsic motivation creates enjoyment in people, and makes them want to experience more of those good feelings. This is why losing weight or quitting smoking that is intrinsically motivated is more successful than those same activities that are extrinsically motivated by doctors, spouses, etc. Everyday examples of extrinsic motivation include instructions (even threats) from management to perform "or else." They also include such outside motivators as business reward cards, a bonus for good work, and the promise of a reward to a child for good behavior.