Gamification is the use of game mechanics and design thinking to engage users and improve engagement, return on investment, data quality, and learning. It works by appealing to human psychology and motivating users through a sense of progression, validation, mitigation of failure, and promotion of growth. While extrinsic rewards like leaderboards and badges can boost engagement briefly, gamification is most effective when it focuses on intrinsic motivations by giving users a sense of autonomy, mastery, and purpose.