Balancing Extrinsic and Intrinsic Rewards for Employee Performance in China’s EV Industry

Liu Yang; Jirapong Ruanggoon; Noppawan Wisedsind

doi:10.63944/ayj.JFEMR

Balancing Extrinsic and Intrinsic Rewards for Employee Performance in China’s EV Industry

Liu Yang (Author)

Faculty of Management Science, Dhonburi Rajabhat University, Bangkok, Thailand

Jirapong Ruanggoon (Primary Contact)

Faculty of Management Science, Dhonburi Rajabhat University, Bangkok, Thailand

Noppawan Wisedsind (Author)

Faculty of Management Science, Dhonburi Rajabhat University, Bangkok, Thailand

DOI:https://doi.org/10.63944/ayj.JFEMR

Keywords:

extrinsic rewards, intrinsic rewards, employee performance, task performance, EV industry

Published

15-09-2025

Abstract: Employee performance is widely regarded as a cornerstone of organizational success, and in fast-changing industries it becomes even more critical. China’s electric vehicle (EV) sector exemplifies this challenge, where rapid innovation and intense competition require companies to motivate employees for both immediate efficiency and long-term commitment. This study explores how extrinsic rewards include bonuses, gifts, promotions, benefits, and intrinsic rewards, including recognition, career development, learning opportunities, and responsibility, influence task and contextual performance. A quantitative design was employed, using survey data and statistical analyses to test the proposed framework. The findings show that both extrinsic and intrinsic rewards significantly enhance performance but operate differently. Extrinsic rewards are more closely linked to short-term improvements, while intrinsic rewards foster deeper engagement and sustained contributions. By combining Herzberg’s Two-Factor Theory and Self-Determination Theory, the study demonstrates that effective reward systems must balance financial incentives with psychological motivators. The results provide theoretical contributions and practical guidance for managers seeking to strengthen motivation, build resilience, and promote sustainable performance.

References

[1] Aguinis, H. (2019). Performance management (3rd ed.). Chicago Business Press.
[2] Alonso, J., & García, M. (2024). Financial incentives and task performance in high-tech industries. Journal of Management Studies, 61(2), 145–162.
[3] Altassan, A. (2024). Intrinsic motivation and employee satisfaction: Evidence from service industries. International Journal of Human Resource Studies, 14(1), 33–47.
[4] Amjad, M., Khan, R., & Zafar, S. (2021). Strategic reward systems and sustainable performance: A managerial perspective. Journal of Business Research, 124, 441–452.
[5] Borman, W. C., & Motowidlo, S. J. (1997). Task performance and contextual performance: The meaning for personnel selection research. Human Performance, 10(2), 99–109.
[6] Campbell, J. P. (1990). Modeling the performance prediction problem in industrial and organizational psychology. In M. Dunnette & L. Hough (Eds.), Handbook of industrial and organizational psychology (Vol. 1, pp. 687–732). Consulting Psychologists Press.
[7] Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological Bulletin, 140(4), 980–1008.
[8] Chao, K. (2025). Human capital investment, technological innovation, and resilience of Chinese high-end manufacturing enterprises. Sustainability, 17(1), 247.
[9] Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage.
[10] Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227–268. https://doi.org/10.1207/S15327965PLI1104_01
[11] Ezell, S. (2024). How innovative is China in the electric vehicle and battery industries? Information Technology & Innovation Foundation.
[12] Figueiredo, R., Santos, M., & Pereira, L. (2025). Knowledge sharing and intrinsic motivation in innovation-driven firms. European Management Review, 22(3), 288–305.
[13] Fischer, C., Malycha, C. P., & Schafmann, E. (2019). The influence of intrinsic motivation and synergistic extrinsic motivators on creativity and innovation. Frontiers in Psychology, 10, 137.
[14] Fulmer, I. S., & Li, C. (2022). Reward systems and employee motivation: Integrating monetary and non-monetary incentives. Academy of Management Annals, 16(1), 311–345.
[15] Herzberg, F., Mausner, B., & Snyderman, B. (1959). The motivation to work (2nd ed.). John Wiley & Sons.
[16] Hoxha, A., Krasniqi, B., & Limani, I. (2024). Intrinsic rewards and employee engagement: Evidence from dynamic industries. Journal of Organizational Behavior, 45(4), 589–607.
[17] Ihemereze, O., Okonkwo, A., & Chike, M. (2023). Monetary incentives and employee productivity in African organizations. African Journal of Business and Economic Research, 18(2), 122–138.
[18] Kumar, A. S. P. (2019). The impact of reward systems on employee performance. Saarbrücken, Germany: Lambert Academic Publishing.
[19] Liu, Y., Li, J., & Wang, X. (2024). Sustainable innovation and industrial performance: Evidence from manufacturing enterprises. Sustainability, 16(8), 3115.
[20] Malak, K., Hussein, R., & Zaid, A. (2025). Extrinsic rewards, organizational commitment, and contextual performance. Asia Pacific Journal of Human Resources, 63(2), 201–220.
[21] Omachi, C., & Ajewumi, D. (2024). Teamwork, adaptability, and performance in modern organizations. International Journal of Productivity and Performance Management, 73(5), 1056–1073.
[22] Pulakos, E. D. (2009). Performance management: A new approach for driving business results. Wiley-Blackwell.
[23] Qiao, G., Li, Y., & Hong, A. (2024). The strategic role of digital transformation: Leveraging digital leadership to enhance employee performance and organizational commitment in the digital era. Systems, 12(11), 457.
[24] Quader, S. (2024). Career growth and employee motivation in knowledge-intensive firms. Human Resource Development Quarterly, 35(2), 178–197.
[25] Rasool, S. F., Chin, T., & Maqbool, R. (2024). Sustainable leadership and organizational performance: The mediating role of employees’ well-being and innovation in the IT sector. Discover Sustainability, 5(1), 422.
[26] Richard, P. J. (2003). Organizational performance: Towards a multidimensional model. Academy of Management Review, 28(4), 718–735.
[27] Shahzad, K., & Adil, M. (2024). Transparent compensation structures and contextual performance. Journal of Human Resource and Sustainability Studies, 12(3), 211–229.
[28] Ullah, S., Arshad, M., Ali, G., & Khan, R. (2024). Digital transformation and employees’ performance: The mediating role of digital empowerment. Serbian Journal of Management, 19(1), 111–124.
[29] Wah, L., & Nathaniel, J. (2025). Reward systems and task performance in Malaysian firms. Asian Journal of Business and Management, 13(1), 77–94.
[30] Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row.
[31] Aguinis, H. (2019). Performance management (3rd ed.). Chicago Business Press.
[32] Alonso, J., & García, M. (2024). Financial incentives and task performance in high-tech industries. Journal of Management Studies, 61(2), 145–162.
[33] Altassan, A. (2024). Intrinsic motivation and employee satisfaction: Evidence from service industries. International Journal of Human Resource Studies, 14(1), 33–47.
[34] Amjad, M., Khan, R., & Zafar, S. (2021). Strategic reward systems and sustainable performance: A managerial perspective. Journal of Business Research, 124, 441–452.
[35] Borman, W. C., & Motowidlo, S. J. (1997). Task performance and contextual performance: The meaning for personnel selection research. Human Performance, 10(2), 99–109.
[36] Campbell, J. P. (1990). Modeling the performance prediction problem in industrial and organizational psychology. In M. Dunnette & L. Hough (Eds.), Handbook of industrial and organizational psychology (Vol. 1, pp. 687–732). Consulting Psychologists Press.
[37] Cerasoli, C. P., Nicklin, J. M., & Ford, M. T. (2014). Intrinsic motivation and extrinsic incentives jointly predict performance: A 40-year meta-analysis. Psychological Bulletin, 140(4), 980–1008.
[38] Chao, K. (2025). Human capital investment, technological innovation, and resilience of Chinese high-end manufacturing enterprises. Sustainability, 17(1), 247.
[39] Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage.
[40] Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227–268.
[41] Ezell, S. (2024). How innovative is China in the electric vehicle and battery industries? Information Technology & Innovation Foundation.
[42] Figueiredo, R., Santos, M., & Pereira, L. (2025). Knowledge sharing and intrinsic motivation in innovation-driven firms. European Management Review, 22(3), 288–305.
[43] Fischer, C., Malycha, C. P., & Schafmann, E. (2019). The influence of intrinsic motivation and synergistic extrinsic motivators on creativity and innovation. Frontiers in Psychology, 10, 137.
[44] Fulmer, I. S., & Li, C. (2022). Reward systems and employee motivation: Integrating monetary and non-monetary incentives. Academy of Management Annals, 16(1), 311–345.
[45] Herzberg, F., Mausner, B., & Snyderman, B. (1959). The motivation to work (2nd ed.). John Wiley & Sons.
[46] Hoxha, A., Krasniqi, B., & Limani, I. (2024). Intrinsic rewards and employee engagement: Evidence from dynamic industries. Journal of Organizational Behavior, 45(4), 589–607.
[47] Ihemereze, O., Okonkwo, A., & Chike, M. (2023). Monetary incentives and employee productivity in African organizations. African Journal of Business and Economic Research, 18(2), 122–138.
[48] Kumar, A. S. P. (2019). The impact of reward systems on employee performance. Saarbrücken, Germany: Lambert Academic Publishing.
[49] Liu, Y., Li, J., & Wang, X. (2024). Sustainable innovation and industrial performance: Evidence from manufacturing enterprises. Sustainability, 16(8), 3115.
[50] Malak, K., Hussein, R., & Zaid, A. (2025). Extrinsic rewards, organizational commitment, and contextual performance. Asia Pacific Journal of Human Resources, 63(2), 201–220.
[51] Omachi, C., & Ajewumi, D. (2024). Teamwork, adaptability, and performance in modern organizations. International Journal of Productivity and Performance Management, 73(5), 1056–1073.
[52] Pulakos, E. D. (2009). Performance management: A new approach for driving business results. Wiley-Blackwell.
[53] Qiao, G., Li, Y., & Hong, A. (2024). The strategic role of digital transformation: Leveraging digital leadership to enhance employee performance and organizational commitment in the digital era. Systems, 12(11), 457.
[54] Quader, S. (2024). Career growth and employee motivation in knowledge-intensive firms. Human Resource Development Quarterly, 35(2), 178–197.
[55] Rasool, S. F., Chin, T., & Maqbool, R. (2024). Sustainable leadership and organizational performance: The mediating role of employees’ well-being and innovation in the IT sector. Discover Sustainability, 5(1), 422.
[56] Richard, P. J. (2003). Organizational performance: Towards a multidimensional model. Academy of Management Review, 28(4), 718–735.
[57] Shahzad, K., & Adil, M. (2024). Transparent compensation structures and contextual performance. Journal of Human Resource and Sustainability Studies, 12(3), 211–229.
[58] Ullah, S., Arshad, M., Ali, G., & Khan, R. (2024). Digital transformation and employees’ performance: The mediating role of digital empowerment. Serbian Journal of Management, 19(1), 111–124.
[59] Wah, L., & Nathaniel, J. (2025). Reward systems and task performance in Malaysian firms. Asian Journal of Business and Management, 13(1), 77–94.
[60] Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row.

Balancing Extrinsic and Intrinsic Rewards for Employee Performance in China’s EV Industry

How to Cite