Internal vs. External Motivation

As a team, we recently finished reading Daniel Pink’s book, Drive. The idea behind the book is that there is a gap between accepted business practices and scientific knowledge. Businesses operate under the carrot-and-stick model, the reward-and-punish model, the external motivation model. And sometimes, even often, this model doesn’t work and in fact, this model may cause more harm than good. Scientifically, motivation is proven to be generated by autonomy, mastery of skills, and purpose larger than self, which is contrary to the carrot-and-stick model. This is Pink’s foundational theory.
What do you think? Are Pink’s ideas too idealistic? Have you seen a significant difference in productivity between internal and external motivation scenarios? Is it possible to be purely motivated internally? Is there a role for external, carrot-and-stick motivation in business practices?

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