Self-determination theory concerned with the beneficial effects of intrinsic motivation. Much research on self-determination theory in OB has focused on cognitive evaluation theory, a complementary theory hypothesizing that extrinsic rewards reduce intrinsic interest in a task. When people are paid for work, it feels less like something they want to do and more like something they have to do.

Self-determination theory proposes that, in addition to being driven by a need for autonomy, people seek ways to achieve competence and make positive connections with others. Self-determination theory also suggests that some caution in the use of extrinsic rewards to motivate is wise and that pursuing goals from intrinsic motives is more sustaining to human motivation. Similarly, cognitive evaluation theory suggests that providing extrinsic incentives may, in many cases, undermine intrinsic motivation.

Although intrinsic motivation predicts performance regardless of incentives, it may be less of a predictor when incentives are tied to performance directly (such as with monetary bonuses) rather than indirectly. A more recent outgrowth of self-determination theory is self-concordance, which considers how strongly people’s reasons for pursuing goals are consistent with their interests and core values. OB research suggests that people who pursue work goals for intrinsic reasons are more satisfied with their jobs, feel they fit into their organizations better, and may perform better.

Across cultures, if individuals pursue goals because of intrinsic interest, they are more likely to attain goals, are happier when they do so, and are happy even when they are unable to attain them. The process of striving toward goals is fun regardless of whether the goal is achieved.