Final answer:
A key factor to examine in defining the role of compensation in your reward strategy is the compensation system behavioural objectives, which closely relate to how compensation methods influence employee motivation and align with company goals. Understanding the importance of unexpected extrinsic rewards and the influence of intrinsic motivation are critical, as well as the work-content factor in relation to job satisfaction.
Step-by-step explanation:
When defining the role compensation will play in your reward strategy, a key factor that needs to be examined is the compensation system behavioural objectives. This includes understanding how various forms of compensation motivate individuals and align with the company's goals. Research indicates that while physical reinforcement such as money can have an impact, it can sometimes have more negative effects on intrinsic motivation than intangible rewards like praise. Additionally, factors such as the expectation of the extrinsic motivator play a significant role – unexpected rewards may maintain intrinsic motivation while expected ones might reduce it. Moreover, while the nature of intrinsic and other extrinsic rewards offered and the indicators of goal achievement are important, they are complementary to the behavioural objectives of the compensation system. Understanding the work-content factor which is most predictive of job satisfaction is essential for developing an effective compensation strategy that balances extrinsic and intrinsic motivation.