In general, intrinsic motivation occurs when people are internally motivated to do something because it either brings them pleasure, they think it is important, or they feel that what they are learning is morally significant. For example, in a husband and wife relationship, unless both are motivated to be faithful, happy and committed to each other or are intrinsically motivated, it is impossible for them to be happy. Another example is if a child is studying out of real interest in the subjects and his curiousness to learn about the subject, it can be said that the child is intrinsically motivated.
On the other hand, extrinsic motivation can be explained as if a person is motivated to take action after gaining the knowledge of the rewards. In other words, extrinsically motivated behaviors are actions that result in the accomplishment of externally administered rewards, such as pay, material possessions, status, and positive evaluations from others (Bateman and Crant, N.D.). For example, when a student is compelled to achieve distinction in his exams because of the prize announced by the teacher can be considered as extrinsic motivation. The student does not learn the subjects out of the real interest on the subjects but due to pressure. While it is debated that intrinsic motivation plays a major role in reflecting the natural human propensity to learn and assimilate, extrinsic motivation differs considerably in its relative autonomy and thus can either be a sign of external control or true self-regulation.
Motivation influences productivity, and I believe it is essential to understand what motivates people to reach peak performance. It is not an easy task to increase their motivation because they respond in different ways. Motivation among the different category of people differs. For instance, a child of 2-3 years may differ from a school going child in motivation. A teenager may differ from the adult. An employee may differ from the business owner. Therefore in all these cases, there are different intrinsic and extrinsic motivations and researchers have studied in-depth on these issues. And most of them agree that motivation, in general, is something that energizes, directs, and sustains behaviors.
If we take a look at the work of early researchers it can be seen that the extrinsic motivation literature evolved first. Ever since the research of Thorndike, there are several thousands of studies, ranging from laboratory experiments to field interventions such as the Emery Air Freight study. These studies have been carried on the behaviorist tradition of changing behavior by controlling extrinsic contingencies. Researchers have found especially in case of employee motivation that through the identification and change of environmental contingencies, including extrinsic reinforcements, employees get motivated and have been realized in work behaviors including attendance, punctuality, stockwork, selling, cost reduction, work quality, productivity, sales calls, and customer service.