This paper discusses ways managers can motivate their employees to work and at the same time to increase their performance. Two theories of motivation--Vroom's theory and Atkinson's theory--focus on the use of extrinsic and intrinsic rewards respectively. A managerial strategy that combines the best of both intrinsic and extrinsic approaches to motivating employees is desirable. When a person is intrinsically motivated, he or she engages in an activity to feel competent in relation to the activity. There are no external rewards as found in extrinsic motivation. For example, jobs should be structured to let employees participate in decision-making. At the same time, extrinsic rewards should be administered so that the most effective performers receive the most rewards. Thus the challenge to managers is to make rewards directly contingent upon performance without decreasing intrinsic motivation. (Author/LD)