These questions are difficult to answer because in spite of the vast research performed on the subject, motivation is not well understood. Why? Because to understand motivation is to understand human nature itself. However, these questions are vital to ask, because some understanding of human nature is the prerequisite to effective employee motivation in the workplace and therefore the key to effective management and leadership.
The simplest way to understand the current understanding of motivation is to relate the Theory X/Y/Z model.
Traditional theory X is attributable to Frederick Winslow Taylor, who invented the practice of scientific management. It's pretty reductionist - according to his system, a worker's motivation is solely determined by pay, and therefore management need not consider psychological or social aspects of work. In essence, scientific management bases human motivation wholly on extrinsic rewards and discards the idea of intrinsic fulfillment. As a result, theory X assumes that people are lazy; they hate work to the extent that they avoid it; they have no ambition, wish to take no initiative and usually avoid taking any responsibility; and all they want is security. To get them to do any work at all, they must be rewarded, coerced, intimidated and punished. This is the so-called 'stick and carrot' philosophy of management.
Fortunately, modern management theory has evolved beyond this initial model. In one of the most elaborate studies on employee motivation, involving 40,000 employees, the Minneapolis Gas Company sought to determine what their potential employees desire most from a job. This study was carried out during a 20 year period from 1945 to 1965 and revealed that most considered security, not pay, as the highest rated factor. The next three factors were advancement, the type of work, and to be at a company they could be proud of, indicating that financial gain is not the deepest motivator.
This led to the development of theory Y, in which psychologist Douglas McGregor proposed that people prefer to earn rewards not so much in cash payments, but with the freedom to master challenging work by themselves. Thus, the managers job is to dovetail the human desire for self-improvement into the organization's need for maximum productive efficiency. The basic objectives of both are therefore met and with imagination and sincerity, enormous potential can be tapped.
Following successful results emanating from experiments to validate Theory Y, Abraham Maslow developed Theory Z. Maslow totally rejected the reductionist approach of Theory X, and became the founder of the humanistic school, or the "third force", which revolves around the meaning and significance of human work.
Maslow's theory of human motivation is based on a hierarchy of human needs, that span from physiological needs (lowest), through love and esteem, and all the way to self-actualization needs (highest). The highest state of self-actualization is characterized by integrity, responsibility, magnanimity, simplicity and naturalness.
Now, how does all of this relate to innovation?
Innovation potential could be considered to be a function of inventiveness and motivation, thus:
Innovation = f(inventiveness, motivation)
Both of these factors have intrinsic and extrinsic components. For example, inventiveness is partially based on inherent creativity, which you are either blessed with or not, but that innate potential can be realized and expanded by education and training, which is externally driven. Similarly, motivation itself is based on an inner capacity of indefatigability, as well as external motivators like compensation, career advancement, and so on.
Incidentally, one clever external motivational tool is Instant Motivator, a service which sends text message reminders to fight negative thoughts (eg, ruminating thoughts that kindle depression) with positive thoughts can create new neural pathways in your brain. Those new positive pathways now have a chance to dominate in your brain, due to the personal coach in your pocket. The company notes that effects can be seen in as little as a few weeks.
However, it's intrinsic motivation is the most fascinating part of the puzzle. It's based on rewards inherent to a task or activity itself - the enjoyment of solving a puzzle or the love of playing a piano or even sexual pleasure, for example. One is said to be intrinsically motivated when engaging in an activity "with no apparent reward to the external observer except for the activity itself".
My personal theory is that invention is an organic and biological act. And like all other biological activities that release endorphins into the brain, there are distinct phases associated with that act. For example, the sexual reaction cycle can be divided into four general phases: the arousal phase, the plateau phase, the orgasm phase and the relaxation phase. The act of inventing something should probably follow the same process and structure as sexual response.
Thus, for innovators, the arousal phase starts with that first inkling of an idea, that germinates and itches in your mind. The plateau phase consists working possible solutions in your mind, constructing a mental map of the solution in your mind. This is where you work it in your head, over and over, in and out, back and forth... until you reach the Eureka! phase and start shouting.
Finally, there's the relaxation phase... until you realize that with your invention, world domination just might be possible.
More than just an analogy
But seriously, it's actually more than just a funny analogy. The brain works the way it works for a reason. Neurohormones require time and a certain activation process to work, as well as stimulation and climax processes... followed by a refractory period before you can do it again. There are clearly similarities between creation and procreation, and the similarities are so similar, you wonder why psychologists and neuroscientists haven't looked at this sooner. So this leads us to ask, what other similarities can we derive between the processes of say, invention and sexuality?
Well, first off, both are pretty fun. And when you come up with a great idea, there's that sweet burst of pleasure, when your brain is suddenly awash in norepinephrine. This little carrot is clearly an evolutionary adaptation that insures we use our brains regularly. Also, it usually turns out more fun if you don't take yourself too seriously. Those who can laugh while doing it, usually enjoy themselves more and do a better job of it too. And finally, if you're innovating as a team, communication is vital if you want to achieve that simultaneous Eureka! But what else? How far can we push this analogy?
I believe that a lot about the art of innovation can be learned by studying the art of tantra. Yeah, you read that right. Think about it, who is more likely to really understand sex, tantric masters (like Sting, reputedly) - who are able to make love for eight hours at a stretch - or some university professor armed with a plethysmograph?
However, there aren't too many places to study tantra in depth, online. New age spirituality sites like Belief.net and intent.com tend to shy away from sexuality, and offer only a few random blog posts. I think that the best source for teachers, discussion and case histories is probably OneTantra.com, which is attempting to become the definitive portal for tantra education online. [Disclosure: I'm a minority stockholder in this company... but that's where I got this idea.]